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Lifetime Brands, Inc. Reports Third Quarter 2023 Financial Results
المصدر: Nasdaq GlobeNewswire / 09 نوفمبر 2023 07:00:01 America/New_York
Declares Regular Quarterly Dividend
GARDEN CITY, N.Y., Nov. 09, 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 September 30, 2023.
Rob Kay, Lifetime’s Chief Executive Officer, commented, “We delivered strong third quarter performance driven by the continued rebound of our core U.S. business and supported by our ongoing focus on actions to drive growth and profitability in a dynamic operating environment. As recovery in our core U.S. business accelerates and retailer purchasing behavior continues to normalize, we expect to see sustained positive trends in shipment and ordering activity. Though international end markets remain under pressure, the traction we are gaining through the continued execution of our strategy gives us confidence in our ability to drive growth and profitability in the future.”
Mr. Kay continued, “Based on our third quarter results and positive forward momentum as we enter the fourth quarter, we are raising the low end of our full year 2023 guidance. We now expect net sales in the range of $670 to $690 million and adjusted EBITDA in the range of $52 to $55 million. With a leading portfolio of brands, an increasingly resilient and disciplined business model, and a strong financial foundation, we are well-positioned to bolster our strong market share position and unlock value for our shareholders.
In October, the Company launched the syndication of an Amendment & Extension of our Term Loan B due 2025 through an extended maturity of August 2027. The Company has received the required commitments from lenders and expects the closing to occur shortly.”
Third Quarter Financial Highlights:
Consolidated net sales for the three months ended September 30, 2023 were $191.7 million, representing an increase of $5.1 million, or 2.7%, as compared to net sales of $186.6 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 increased by $4.1 million, or 2.2%, 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 September 30, 2023 was $71.0 million, or 37.0%, as compared to $67.8 million, or 36.4%, for the corresponding period in 2022.
Income from operations was $13.6 million, as compared to $7.6 million for the corresponding period in 2022.
Adjusted income from operations(1) was $17.7 million, as compared to $16.8 million for the corresponding period in 2022.
Net income was $4.2 million, or $0.20 per diluted share, as compared to net loss of $(6.4) million, or $(0.30) per diluted share, in the corresponding period in 2022.
Adjusted net income(1) was $7.7 million, or $0.36 per diluted share, as compared to adjusted net income(1) of $6.2 million, or $0.29 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.
Nine Months Financial Highlights:
Consolidated net sales for the nine months ended September 30, 2023 were $483.5 million, a decrease of $37.1 million, or 7.1%, as compared to net sales of $520.6 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 $36.2 million, or 7.0%, 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 nine months ended September 30, 2023 was $180.8 million, or 37.4%, as compared to $186.1 million, or 35.7%, for the corresponding period in 2022.
Income from operations was $16.2 million, as compared to $11.5 million for the corresponding period in 2022.
Adjusted income from operations(1) was $29.5 million, as compared to $31.2 million for the corresponding period in 2022.
Net loss was $(11.1) million, or $(0.52) per diluted share, as compared to net loss of $(9.4) million, or $(0.44) per diluted share, in the corresponding period in 2022. Net loss for the current period includes a non-cash impairment charge of $6.8 million related to the Company’s equity investment in Grupo Vasconia, as compared to $6.2 million for the corresponding period in 2022.
Adjusted net income(1) was $4.7 million, or $0.22 per diluted share, as compared to adjusted net income(1) of $10.1 million, or $0.46 per diluted share, in the corresponding period in 2022.
Adjusted EBITDA(1) was $55.5 million for the trailing twelve months ended September 30, 2023. Pro forma adjusted EBITDA(1) was $55.8 million for the trailing twelve months ended September 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 September 30, 2023, the Company’s liquidity was $198.8 million, which is comprised of cash on hand, available borrowings under the credit facility, and availability under the Receivables Purchase Agreement.
On October 25, 2023, the Company launched the syndication of an Amendment & Extension of the Company’s existing Term Loan B facility due 2025 through an extended maturity of August 2027. The Company has received the required commitments from the lenders and expects the closing of such Term Loan B facility in the fourth quarter of 2023.
(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 providing updated financial guidance as follows: Net sales $670 to $690 million Income from operations $26.2 to $29.2 million Adjusted income from operations $43.5 to $46.5 million Net loss(1) $(7.2) to $(6.0) million Adjusted net income $11.1 to $12.3 million Diluted loss per common share(1) $(0.33) to $(0.28) per share Adjusted diluted income per common share $0.51 to $0.56 per share Weighted-average diluted shares 21.8 million Adjusted EBITDA $52 to $55 million (1) Net loss and diluted loss per common share guidance does not include an estimate for extinguishment of debt loss that may be recognized in connection with the extension of the Company's Term Loan B facility. Tables reconciling non-GAAP financial measures to GAAP financial measures, as reported, are included below.
Dividend
On November 7, 2023, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on February 15, 2024 to stockholders of record on February 1, 2024.
Conference Call
The Company has scheduled a conference call for Thursday, November 9, 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=karwksyB
For those who cannot listen to the live broadcast, an audio replay of the webcast will be available until May 7, 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 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; the emergence or continuation of geopolitical conflicts including: the conflict in Ukraine, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and the potential geopolitical consequences; 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
212-355-4449
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, 2023 2022 2023 2022 Net sales $ 191,669 $ 186,590 $ 483,540 $ 520,621 Cost of sales 120,718 118,757 302,756 334,553 Gross margin 70,951 67,833 180,784 186,068 Distribution expenses 17,125 18,641 49,742 55,239 Selling, general and administrative expenses 40,214 36,462 113,984 114,208 Restructuring expenses - - 856 - Wallace facility remediation expense - 5,140 - 5,140 Income from operations 13,612 7,590 16,202 11,481 Interest expense (5,246 ) (4,581 ) (16,110 ) (12,080 ) Mark to market (loss) gain on interest rate derivatives (98 ) 637 (135 ) 1,990 Gain on early retirement of debt - - 1,520 - Income before income taxes and equity in losses 8,268 3,646 1,477 1,391 Income tax provision (3,015 ) (1,845 ) (2,909 ) (3,420 ) Equity in losses, net of taxes (1,047 ) (8,159 ) (9,687 ) (7,409 ) NET INCOME (LOSS) $ 4,206 $ (6,358 ) $ (11,119 ) $ (9,438 ) BASIC INCOME (LOSS) PER COMMON SHARE $ 0.20 $ (0.30 ) $ (0.52 ) $ (0.44 ) DILUTED INCOME (LOSS) PER COMMON SHARE $ 0.20 $ (0.30 ) $ (0.52 ) $ (0.44 )
LIFETIME BRANDS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands—except share data) September 30, December 31, 2023 2022 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 6,318 $ 23,598 Accounts receivable, less allowances of $16,810 at September 30, 2023 and $14,606 at
December 31, 2022153,456 141,195 Inventory 217,696 222,209 Prepaid expenses and other current assets 12,139 13,254 Income taxes receivable 1,254 - TOTAL CURRENT ASSETS 390,863 400,256 PROPERTY AND EQUIPMENT, net 16,824 18,022 OPERATING LEASE RIGHT-OF-USE ASSETS 71,834 74,869 INVESTMENTS 3,963 12,516 INTANGIBLE ASSETS, net 202,872 213,887 OTHER ASSETS 5,312 6,338 TOTAL ASSETS $ 691,668 $ 725,888 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Current maturity of term loan $ 13,866 $ - Accounts payable 57,188 38,052 Accrued expenses 69,320 77,602 Income taxes payable - 224 Current portion of operating lease liabilities 13,585 14,028 TOTAL CURRENT LIABILITIES 153,959 129,906 OTHER LONG-TERM LIABILITIES 14,796 14,995 INCOME TAXES PAYABLE, LONG-TERM 1,589 1,591 OPERATING LEASE LIABILITIES 72,808 76,420 DEFERRED INCOME TAXES 9,560 9,607 REVOLVING CREDIT FACILITY 29,305 10,424 TERM LOAN 183,234 242,857 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 September 30, 2023
and December 31, 2022; shares issued and outstanding: 21,814,236 at September 30, 2023
and 21,779,799 at December 31, 2022218 218 Paid-in capital 276,813 274,579 (Accumulated deficit) retained earnings (15,333 ) 1,145 Accumulated other comprehensive loss (35,281 ) (35,854 ) TOTAL STOCKHOLDERS’ EQUITY 226,417 240,088 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 691,668 $ 725,888
LIFETIME BRANDS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended September 30, 2023 2022 OPERATING ACTIVITIES Net loss $ (11,119 ) $ (9,438 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 14,616 14,535 Amortization of financing costs 1,397 1,305 Mark to market loss (gain) on interest rate derivatives 135 (1,990 ) Non-cash lease adjustment (1,617 ) (1,055 ) Provision (recovery) for doubtful accounts 2,193 (140 ) Deferred income taxes 5 - Stock compensation expense 2,770 3,565 Undistributed losses from equity investment, net of taxes 9,687 7,409 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 (14,279 ) 38,765 Inventory 4,828 (3,694 ) Prepaid expenses, other current assets and other assets 1,784 (177 ) Accounts payable, accrued expenses and other liabilities 9,615 (66,062 ) Income taxes receivable (1,254 ) (2,583 ) Income taxes payable (230 ) (525 ) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 16,961 (20,085 ) INVESTING ACTIVITIES Purchases of property and equipment (1,765 ) (1,975 ) Acquisition - (17,956 ) NET CASH USED IN INVESTING ACTIVITIES (1,765 ) (19,931 ) FINANCING ACTIVITIES Proceeds from revolving credit facility 69,954 264,184 Repayments of revolving credit facility (51,123 ) (230,365 ) Repayments of term loan (44,866 ) (6,216 ) Payment of finance costs (433 ) (882 ) Payments for finance lease obligations (20 ) (24 ) Payments of tax withholding for stock based compensation (537 ) (938 ) Proceeds from the exercise of stock options - 233 Payments for stock repurchase (2,539 ) (4,678 ) Cash dividends paid (2,832 ) (2,887 ) NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (32,396 ) 18,427 Effect of foreign exchange on cash (80 ) (463 ) DECREASE IN CASH AND CASH EQUIVALENTS (17,280 ) (22,052 ) Cash and cash equivalents at beginning of period 23,598 27,982 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,318 $ 5,930
LIFETIME BRANDS, INC. Supplemental Information (in thousands) Reconciliation of GAAP to Non-GAAP Operating Results Adjusted EBITDA for the twelve months ended September 30, 2023: Quarter Ended Twelve Months Ended December 31, March 31, June 30, September 30, September 30, 2022 2023 2023 2023 2023 Net income (loss) as reported $ 3,272 $ (8,805 ) $ (6,520 ) $ 4,206 $ (7,847 ) Undistributed equity losses, net 2,058 2,777 5,863 1,047 11,745 Income tax provision (benefit) 2,308 (1,348 ) 1,242 3,015 5,217 Interest expense 5,125 5,336 5,528 5,246 21,235 Depreciation and amortization 5,001 4,870 4,925 4,821 19,617 Mark to market loss (gain) on interest rate derivatives 19 234 (197 ) 98 154 Stock compensation expense 281 861 1,011 898 3,051 Contingent consideration fair value adjustments - - (50 ) — (50 ) Gain on early retirement of debt - - (1,520 ) — (1,520 ) Acquisition related expenses 170 490 242 186 1,088 Restructuring expenses 1,420 856 - — 2,276 Warehouse redesign expenses(1) - 194 157 176 527 Adjusted EBITDA $ 19,654 $ 5,465 $ 10,681 $ 19,693 $ 55,493 Pro forma projected synergies adjustment(2) 323 Pro forma Adjusted EBITDA(3) $ 19,654 $ 5,465 $ 10,681 $ 19,693 $ 55,816 (1) For the twelve months ended September 30, 2023, the warehouse redesign expenses were related to the U.S. segment. (2) Pro forma projected synergies represents the projected cost savings of $0.2 million associated with the Executive Chairman's cessation of service in such role, and $0.1 million associated with reorganization of the U.S. segment's sales management structure. (3) Adjusted EBITDA is a non-GAAP financial measure that is defined in the Company’s debt agreements. Adjusted EBITDA is defined as net income (loss), adjusted to exclude undistributed equity in losses, income tax provision (benefit), interest expense, depreciation and amortization, mark to market loss (gain) on interest rate derivatives, stock compensation expense, gain on early retirement of debt, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.
LIFETIME BRANDS, INC. Supplemental Information (in thousands—except per share data) Reconciliation of GAAP to Non-GAAP Operating Results (continued) Adjusted net income and adjusted diluted income per common share (in thousands - except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) as reported $ 4,206 $ (6,358 ) $ (11,119 ) $ (9,438 ) Adjustments: Acquisition intangible amortization expense 3,679 3,628 11,033 10,749 Contingent consideration fair value adjustments - - (50 ) - Gain on early retirement of debt - - (1,520 ) - Acquisition related expenses 186 109 918 1,303 Restructuring expenses - - 856 - S'well integration costs - 250 - 1,895 Warehouse relocation and redesign expenses(1) 176 59 527 629 Impairment of Grupo Vasconia investment 340 6,168 6,834 6,168 Mark to market loss (gain) on interest rate derivatives 98 (637 ) 135 (1,990 ) Wallace facility remediation expense - 5,140 - 5,140 Income tax effect on adjustments (1,015 ) (2,118 ) (2,931 ) (4,348 ) Adjusted net income(2)(3) $ 7,670 $ 6,241 $ 4,683 $ 10,108 Adjusted diluted income per common share(4) $ 0.36 $ 0.29 $ 0.22 $ 0.46 (1) For the three and nine months ended September 30, 2023, warehouse relocation and redesign expenses were related to the U.S. segment. For the three months ended September 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the International segment. For the nine months ended September 30, 2022, warehouse relocation and redesign expenses included $0.5 million of expenses related to the International segment and $0.1 million of expenses related to the U.S. segment. (2) Adjusted net income for the three and nine months ended September 30, 2022 has been recast to reflect the adjustment for acquisition intangible amortization expense. (3) Adjusted net income and adjusted diluted income per common share in the three and nine months ended September 30, 2023 excludes acquisition intangible amortization expense, contingent consideration fair value adjustments, gain on early retirement of debt, acquisition related expenses, restructuring expenses, warehouse redesign expenses, impairment of Grupo Vasconia investment, and mark to market loss on interest rate derivatives. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments. Adjusted net income and adjusted diluted income per common share in the three and nine months ended September 30, 2022 excludes acquisition intangible amortization expense, acquisition related expenses, S'well integration costs, warehouse relocation and redesign expenses, impairment of Grupo Vasconia investment, mark to market (gain) on interest rate derivatives, and Wallace facility remediation expense. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments. (4) Adjusted diluted income per common share is calculated based on diluted weighted-average shares outstanding of 21,293 and 21,677 for the three month period ended September 30, 2023 and 2022, respectively. Adjusted diluted income per common share is calculated based on diluted weighted-average shares outstanding of 21,266 and 21,890 for the nine month period ended September 30, 2023 and 2022, respectively. The diluted weighted-average shares outstanding for the three and nine months ended September 30, 2023 include the effect of dilutive securities of 77 and 78, respectively. The diluted weighted-average shares outstanding for the three and nine months ended September 30, 2022 include the effect of dilutive securities of 155 and 288, respectively.
Adjusted income from operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income from operations $ 13,612 $ 7,590 $ 16,202 $ 11,481 Adjustments: Acquisition intangible amortization expense 3,679 3,628 11,033 10,749 Contingent consideration fair value adjustments - - (50 ) - Acquisition related expenses 186 109 918 1,303 Restructuring expenses - - 856 - S'well integration costs - 250 - 1,895 Warehouse relocation and redesign expenses (1) 176 59 527 629 Wallace facility remediation expense - 5,140 - 5,140 Total adjustments 4,041 9,186 13,284 19,716 Adjusted income from operations(2)(3) $ 17,653 $ 16,776 $ 29,486 $ 31,197 (1) For the three and nine months ended September 30, 2023, warehouse relocation and redesign expenses were related to the U.S. segment. For the three months ended September 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the International segment. For the nine months ended September 30, 2022, warehouse relocation and redesign expenses included $0.5 million of expenses related to the International segment and $0.1 million of expenses related to the U.S. segment. (2) Adjusted income from operations for the three and nine months ended September 30, 2022 has been recast to reflect the adjustment for acquisition intangible amortization expense. (3) Adjusted income from operations for the three and nine months ended September 30, 2023 and September 30, 2022, excludes acquisition intangible amortization expense, contingent consideration fair value adjustments, acquisition related expenses, restructuring expenses, S'well integration costs, warehouse relocation and redesign expenses and Wallace facility remediation expense.
LIFETIME BRANDS, INC. Supplemental Information (in thousands) Reconciliation of GAAP to Non-GAAP Operating Results (continued) Constant Currency: As Reported Constant Currency (1) Three Months Ended Three Months Ended Year-Over-Year September 30, September 30, Increase (Decrease) Net sales 2023 2022 Increase 2023 2022 Increase Currency Excluding Including Currency (Decrease) (Decrease) Impact Currency Currency Impact U.S. $ 179,393 $ 172,818 $ 6,575 $ 179,393 $ 172,801 $ 6,592 $ 17 3.8 % 3.8 % 0.0 % International 12,276 13,772 (1,496 ) 12,276 14,725 (2,449 ) (953 ) (16.6) % (10.9) % 5.7 % Total net sales $ 191,669 $ 186,590 $ 5,079 $ 191,669 $ 187,526 $ 4,143 $ (936 ) 2.2 % 2.7 % 0.5 % As Reported Nine Months Ended Constant Currency (1) Year-Over-Year Increase September 30, Nine Months Ended September 30, (Decrease) Net sales 2023 2022 Increase 2023 2022 Increase Currency Excluding Including Currency (Decrease) (Decrease) Impact Currency Currency Impact U.S. $ 447,857 $ 476,227 $ (28,370 ) $ 447,857 $ 476,185 $ (28,328 ) $ 42 (5.9) % (6.0) % (0.1) % International 35,683 44,394 (8,711 ) 35,683 43,562 (7,879 ) 832 (18.1) % (19.6) % (1.5) % Total net sales $ 483,540 $ 520,621 $ (37,081 ) $ 483,540 $ 519,747 $ (36,207 ) $ 874 (7.0) % (7.1) % (0.1) % (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 Information Reconciliation of GAAP to Non-GAAP Guidance Adjusted EBITDA guidance for the full year ending December 31, 2023 (in millions): Net loss guidance $(7.2) to $(6.0) Undistributed equity losses 9.7 Income tax expense 4.2 to 6.0 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 1.0 Restructuring, and warehouse redesign expenses 1.6 Other adjustments(2) (0.1) Adjusted EBITDA guidance $52 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 $(7.2) to $(6.0) Acquisition intangible amortization expense 14.8 Gain on early retirement of debt (1.5) Acquisition related expense 1.0 Restructuring, and warehouse redesign expenses 1.6 Impairment of Grupo Vasconia investment 6.8 Other adjustments(3) (0.1) Income tax effect on adjustment (4.3) Adjusted net income guidance $11.1 to $12.3 Adjusted diluted income per share guidance $0.51 to $0.56 Adjusted income from operations guidance for the full year ending December 31, 2023 (in millions): Income from operations guidance $26.2 to $29.2 Acquisition intangible amortization expense 14.8 Acquisition related expense 1.0 Restructuring, and warehouse redesign expenses 1.6 Other adjustments(2) (0.1) Adjusted income from operations $43.5 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. (3) Includes mark to market loss on interest rate derivatives and contingent consideration fair value adjustments. 
