Lifetime Brands(LCUT)2024-08-08 20:18Financial Performance - Net sales for Q2 2024 were $141.67 million, a decrease of 3.9% from $146.44 million in Q2 2023[10] - Net loss for Q2 2024 was $18.17 million, compared to a net loss of $6.52 million in Q2 2023, indicating a significant increase in losses[10] - Basic and diluted loss per common share for Q2 2024 was $(0.85), compared to $(0.31) in Q2 2023[10] - Total comprehensive loss for Q2 2024 was $(3.93) million, an improvement from $(5.57) million in Q2 2023[12] - For the six months ended June 30, 2024, total net sales were $283.9 million, a decrease of 2.7% compared to $291.9 million for the same period in 2023[54] - The net loss for the six months ended June 30, 2024, was $24.427 million, compared to a net loss of $15.325 million for the same period in 2023[19] - Consolidated net sales for Q2 2024 were $141.7 million, a decrease of $4.7 million, or 3.2%, compared to $146.4 million in Q2 2023[137] - Net loss for the three months ended June 30, 2024, was $18.2 million, compared to a loss of $6.5 million for the same period in 2023, representing a significant increase in losses[10] Expenses and Margins - Gross margin for Q2 2024 was $54.55 million, representing a gross margin percentage of 38.5%, compared to 38.2% in Q2 2023[10] - Selling, general, and administrative expenses increased to $38.33 million in Q2 2024 from $35.86 million in Q2 2023[10] - Distribution expenses for Q2 2024 were $15.05 million, a slight decrease from $15.73 million in Q2 2023[10] - Gross margin for the six months ended June 30, 2024 was $112.1 million, or 39.5%, compared to $109.8 million, or 37.6%, for the same period in 2023[155] - Selling, general and administrative expenses for the six months ended June 30, 2024 were $77.9 million, an increase of $4.1 million, or 5.6%, compared to $73.8 million for the same period in 2023[160] Cash Flow and Liquidity - Net cash provided by operating activities was $20.930 million for the six months ended June 30, 2024, down from $28.993 million in the prior year[19] - Cash and cash equivalents at the end of the period were $3.396 million, a decrease from $15.122 million at the end of the previous year[19] - Net cash used in financing activities was $32.5 million for the six months ended June 30, 2024, compared to $36.5 million in the same period of 2023[198] - Cash paid for interest during the six months ended June 30, 2024, was $9.853 million, compared to $10.453 million for the same period in 2023[118] Debt and Financing - The company has a senior secured asset-based revolving credit facility with a maximum principal amount of $200 million, maturing on August 26, 2027[63] - The Term Loan has a principal amount of $150 million and also matures on August 26, 2027, requiring quarterly principal payments of 1.25% starting March 31, 2024[64][65] - As of June 30, 2024, total availability under the ABL Agreement was $135.531 million, with outstanding borrowings of $32.635 million[67] - The interest rate on outstanding borrowings under the ABL Agreement ranged from 4.91% to 8.75% as of June 30, 2024[70] - The Company was in compliance with the covenants of the Debt Agreements at June 30, 2024[185] Inventory and Receivables - Accounts receivable increased significantly to $42.712 million from $25.524 million year-over-year[19] - Total inventory as of June 30, 2024, was $208.480 million, up from $188.647 million at the end of 2023, reflecting a rise in finished goods[31] - The company has $18.7 million of accounts receivables available for sale to HSBC as of June 30, 2024[29] Tax and Regulatory Matters - The effective income tax benefit rate for the three months ended June 30, 2024, was 0.3%, while the provision rate was (0.7)%, reflecting the impact of foreign losses[96] - The Company has identified major tax jurisdictions including U.S. Federal, California, Massachusetts, New Jersey, New York, and the United Kingdom, and evaluates its tax positions quarterly[98] - The Company believes that potential losses related to the U.S. Customs and Border Protection matter are reasonably possible but not probable, with estimated duties potentially owed of $0.1 million[113] Stock and Shareholder Matters - Cash dividends declared per share of common stock were $0.085 for both the six months ended June 30, 2024, and 2023[15] - The Company has authorized a stock repurchase program of up to $20.0 million, with $11.1 million remaining available for repurchases as of June 30, 2024[117] - The remaining dollar amount available for stock repurchases under the Board authorized plan was $11.1 million as of June 30, 2024[199] Other Financial Metrics - The Company’s adjusted EBITDA for the trailing twelve months ended June 30, 2024 was $56.6 million[186] - The Company incurred $0.8 million in unallocated corporate expenses related to the termination payment with its former Executive Chairman during the six months ended June 30, 2023[48] - The total fair value of restricted stock that vested during the six months ended June 30, 2024 was $2.8 million[86] - The total fair value of performance-based awards that vested during the six months ended June 30, 2024 was $1.5 million[89]