Lifetime Brands(LCUT) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Earnings Overview Lifetime Brands, Inc. reported a decrease in Q2 2025 net sales, with management highlighting resilience and strong liquidity despite macroeconomic challenges Executive Summary Lifetime Brands, Inc. reported consolidated net sales of $131.9 million for the second quarter of 2025, a 6.9% decrease year-over-year, achieving a TTM Adjusted EBITDA of $50.7 million and maintaining a strong liquidity position - Consolidated net sales for Q2 2025 were $131.9 million[1] - Trailing twelve months (TTM) Adjusted EBITDA was $50.7 million[1] - The company maintains a strong liquidity position[1] CEO Commentary CEO Rob Kay highlighted the company's resilience despite macroeconomic pressures and tariff headwinds, noting a steady gross margin of 38.6% and reduced SG&A expenses, expressing confidence in strong liquidity for managing volatility and building long-term growth - Gross margin held steady at 38.6% due to strong execution in pricing strategy and supply chain management[2] - Selling, general and administrative (SG&A) expenses were reduced, improving cost efficiency[2] - The company is well-equipped to manage near-term volatility and build a foundation for sustainable long-term growth, backed by a strong liquidity position[2] Financial Performance Highlights The company experienced decreased net sales for Q2 and six months 2025, stable gross margin, and a significant goodwill impairment charge, while maintaining a strong liquidity position Second Quarter 2025 Financial Highlights Q2 2025 consolidated net sales decreased by 6.9% to $131.9 million, with a stable gross margin but a significant operating loss due to a $33.2 million goodwill impairment Second Quarter Financial Performance (YoY) | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--------------------------------- | :---------- | :---------- | :----------- | :----------- | | Consolidated Net Sales | $131.9M | $141.7M | $(9.8)M | (6.9)% | | Gross Margin | $50.8M (38.6%) | $54.6M (38.5%) | $(3.8)M | 0.1 ppt | | SG&A Expenses | $37.5M | $38.3M | $(0.8)M | (2.1)% | | Loss (Income) from Operations | $(37.2)M | $1.2M | $(38.4)M | N/A | | Adjusted Income from Operations | $0.9M | $5.6M | $(4.7)M | (83.9)% | | Net Loss | $(39.7)M | $(18.2)M | $(21.5)M | (118.1)% | | Diluted EPS | $(1.83) | $(0.85) | $(0.98) | (115.3)% | | Adjusted Net Loss | $(10.9)M | $(0.6)M | $(10.3)M | (1716.7)% | | Adjusted Diluted EPS | $(0.50) | $(0.03) | $(0.47) | (1566.7)% | - Loss from operations for Q2 2025 includes a non-cash goodwill impairment charge of $33.2 million related to the U.S. segment, reducing the goodwill balance to zero[5][6] Six Months Ended June 30, 2025 Financial Highlights For the six months ended June 30, 2025, consolidated net sales decreased by 4.2% to $271.9 million, gross margin declined, and the period saw a loss from operations of $(36.1) million, including a $33.2 million goodwill impairment charge Six Months Financial Performance (YoY) | Metric | 6M 2025 | 6M 2024 | Change ($) | Change (%) | | :--------------------------------- | :---------- | :---------- | :----------- | :----------- | | Consolidated Net Sales | $271.9M | $283.9M | $(12.0)M | (4.2)% | | Gross Margin | $101.5M (37.3%) | $112.1M (39.5%) | $(10.6)M | (2.2) ppt | | SG&A Expenses | $69.0M | $77.9M | $(8.9)M | (11.4)% | | Loss (Income) from Operations | $(36.1)M | $3.0M | $(39.1)M | N/A | | Adjusted Income from Operations | $0M | $11.3M | $(11.3)M | (100)% | | Net Loss | $(43.9)M | $(24.4)M | $(19.5)M | (79.9)% | | Diluted EPS | $(2.03) | $(1.14) | $(0.89) | (78.1)% | | Adjusted Net Loss | $(16.2)M | $(3.8)M | $(12.4)M | (326.3)% | | Adjusted Diluted EPS | $(0.75) | $(0.18) | $(0.57) | (316.7)% | - Selling, general and administrative expenses for the current period include a net legal settlement gain of $6.4 million[9] - Net loss for the prior period (6M 2024) included a non-cash charge of $14.2 million due to the Company's loss of significant influence in its equity investment in Grupo Vasconia[11] Liquidity Position As of June 30, 2025, Lifetime Brands reported total liquidity of $96.9 million, composed of cash and cash equivalents, availability under the ABL Agreement, and available funding under the Receivables Purchase Agreement Liquidity as of June 30, 2025 | Liquidity Component | Amount | | :-------------------------------- | :------------- | | Cash and cash equivalents | $12.0 million | | Availability under ABL Agreement | $65.7 million | | Available funding under Receivables Purchase Agreement | $19.2 million | | Total Liquidity | $96.9 million | Dividend Declaration The Company's Board of Directors declared a quarterly dividend of $0.0425 per share, payable on November 14, 2025, to stockholders of record on October 31, 2025 - Quarterly dividend declared: $0.0425 per share[14] - Dividend payable on November 14, 2025, to stockholders of record on October 31, 2025[14] Non-GAAP Financial Measures and Reconciliations This section explains the company's non-GAAP financial measures and provides detailed reconciliations for Adjusted EBITDA, net loss, income from operations, and constant currency net sales Explanation of Non-GAAP Measures Lifetime Brands utilizes non-GAAP financial measures, including constant currency net sales, adjusted income (loss) from operations, adjusted net loss, adjusted diluted loss per common share, and adjusted EBITDA, which management uses to evaluate financial results and trends for more accurate period-to-period comparison, but are not intended as substitutes for GAAP measures - Non-GAAP financial measures include constant currency net sales, adjusted income (loss) from operations, adjusted net loss, adjusted diluted loss per common share, and adjusted EBITDA[16] - Management uses these measures to evaluate ongoing financial results and trends, believing they allow for more accurate period-to-period comparison of operating performance[16] - These non-GAAP measures should be viewed as a supplement to, and not a substitute for, GAAP financial measures[16] Adjusted EBITDA Reconciliation (TTM) For the trailing twelve months ended June 30, 2025, Adjusted EBITDA was $50.7 million, a non-GAAP measure defined in the company's debt agreements that reconciles net income (loss) by excluding specific items Adjusted EBITDA Reconciliation (TTM Ended June 30, 2025) | Metric | TTM Ended June 30, 2025 (in thousands) | | :--------------------------------- | :------------------------------------- | | Net income (loss) as reported | $(34,638) | | Income tax provision (benefit) | $254 | | Interest expense | $21,406 | | Depreciation and amortization | $23,616 | | Mark to market loss (gain) on interest rate derivatives | $957 | | Goodwill impairment | $33,237 | | Stock compensation expense | $4,182 | | Legal settlement gain, net | $(4,578) | | Severance expense | $270 | | Acquisition related expenses | $476 | | Warehouse redesign expenses | $1,050 | | Pro forma adjustments | $4,500 | | Adjusted EBITDA | $50,732 | - Adjusted EBITDA is a non-GAAP financial measure defined in the Company's debt agreements, excluding specific items to reflect operational performance[29] Adjusted Net Loss and Diluted EPS Reconciliation Adjusted net loss for Q2 2025 was $(10.9) million, or $(0.50) per diluted share, significantly higher than Q2 2024, with key adjustments for 2025 including a substantial goodwill impairment charge Adjusted Net Loss and Diluted EPS Reconciliation | Metric (in thousands - except per share data) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Net loss as reported | $(39,699) | $(18,167) | $(43,900) | $(24,427) | | Total Adjustments (pre-tax) | $38,143 | $18,631 | $36,855 | $22,696 | | Income tax effect on adjustments | $(9,571) | $(1,102) | $(9,176) | $(2,100) | | Adjusted net loss | $(10,907) | $(638) | $(16,221) | $(3,831) | | Adjusted diluted loss per common share | $(0.50) | $(0.03) | $(0.75) | $(0.18) | - Adjustments for 2025 include a $33.2 million goodwill impairment, acquisition intangible amortization, legal settlement gain, acquisition-related expenses, warehouse redesign expenses, severance expense, and mark-to-market loss on interest rate derivatives[31] - Adjusted diluted loss per common share is calculated based on diluted weighted-average shares outstanding, which do not include the effect of dilutive securities for the periods presented[32] Adjusted Income from Operations Reconciliation Adjusted income from operations for Q2 2025 was $0.9 million, a decrease from $5.6 million in Q2 2024, with the primary adjustment for both periods in 2025 being the $33.2 million goodwill impairment charge Adjusted Income from Operations Reconciliation | Metric (in thousands) | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :--------------------------------- | :---------- | :---------- | :---------- | :---------- | | (Loss) income from operations | $(37,207) | $1,167 | $(36,108) | $2,997 | | Total Adjustments | $38,143 | $4,397 | $36,108 | $8,288 | | Adjusted income from operations | $936 | $5,564 | $0 | $11,285 | - The significant goodwill impairment charge of $33.2 million was a key adjustment for both the three and six months ended June 30, 2025[33] Constant Currency Net Sales Reconciliation In constant currency, Q2 2025 consolidated net sales decreased by 7.3% ($10.4 million), slightly more than the reported 6.9% decrease, indicating a minor positive currency impact, with a similar trend for the six-month period Constant Currency Net Sales (Three Months Ended June 30) | Metric | Q2 2025 (As Reported) | Q2 2024 (As Reported) | Q2 2024 (Constant Currency) | Change (Excl. Currency) | Change (Incl. Currency) | Currency Impact | | :--------------------------------- | :-------------------- | :-------------------- | :-------------------------- | :---------------------- | :---------------------- | :-------------- | | Total Net Sales | $131,862 | $141,666 | $142,268 | (7.3)% | (6.9)% | 0.4% | | U.S. Net Sales | $119,315 | $130,503 | $130,502 | (8.6)% | (8.6)% | —% | | International Net Sales | $12,547 | $11,163 | $11,766 | 6.6% | 12.4% | 5.8% | Constant Currency Net Sales (Six Months Ended June 30) | Metric | 6M 2025 (As Reported) | 6M 2024 (As Reported) | 6M 2024 (Constant Currency) | Change (Excl. Currency) | Change (Incl. Currency) | Currency Impact | | :--------------------------------- | :-------------------- | :-------------------- | :-------------------------- | :---------------------- | :---------------------- | :-------------- | | Total Net Sales | $271,947 | $283,908 | $284,342 | (4.4)% | (4.2)% | 0.2% | | U.S. Net Sales | $247,825 | $260,983 | $260,921 | (5.0)% | (5.0)% | —% | | International Net Sales | $24,122 | $22,925 | $23,421 | 3.0% | 5.2% | 2.2% | - Constant Currency is determined by applying 2025 average exchange rates to prior year local currency sales amounts to exclude the impact of foreign currency fluctuations[35] Additional Information This section provides important disclosures regarding forward-looking statements, an overview of Lifetime Brands, Inc., and investor relations contact information Forward-Looking Statements The report includes forward-looking statements concerning the company's growth, financial guidance, strategic initiatives, and future performance, which are based on current judgments and assumptions, but actual results may differ materially due to various important factors, and the company disclaims any obligation to update these statements unless legally required - Forward-looking statements cover company growth, financial guidance, ability to navigate the current environment, strategic initiatives, and projected financial and operating performance[17] - Actual results may differ materially due to factors such as credit agreement compliance, liquidity, seasonality, potential impairments (including goodwill), trade/tax law changes, economic conditions, customer behavior, foreign exchange fluctuations, supply chain costs, and geopolitical conditions[17] - The Company undertakes no obligation to update these forward-looking statements other than as required by law[17] About Lifetime Brands, Inc. Lifetime Brands, Inc. is a leading global designer, developer, and marketer of a wide array of branded consumer products for the home, marketing products under well-known kitchenware, tableware, giftware, and home solutions brands, and also supplying exclusive private label products to major retailers worldwide - Lifetime Brands is a leading global designer, developer, and marketer of branded consumer products used in the home[18] - The company markets products under well-known kitchenware, tableware/giftware, and home solutions brands[18][19] - Lifetime Brands also provides exclusive private label products to leading retailers globally[19] Investor Relations and Conference Call Details for the Q2 2025 conference call, held on August 7, 2025, are provided, including dial-in numbers and webcast access, along with investor relations contact information for Lifetime Brands, Inc - A conference call was scheduled for Thursday, August 7, 2025, at 11:00 a.m. (Eastern Time)[15] - A live webcast of the conference call was accessible via a provided link, with an audio replay available on the Company's investor relations website[15] - Investor relations contacts are Laurence Winoker (CFO) and Shannon Devine (MZ North America)[21] Condensed Consolidated Financial Statements This section presents the condensed consolidated statements of operations, balance sheets, and cash flows for the periods ended June 30, 2025 Statements of Operations The condensed consolidated statements of operations detail the company's financial performance for the three and six months ended June 30, 2025, and 2024, with key figures including net sales, cost of sales, gross margin, operating expenses, and net loss, notably impacted by a $33.2 million goodwill impairment charge in 2025 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $131,862 | $141,666 | $271,947 | $283,908 | | Cost of sales | $81,023 | $87,116 | $170,471 | $171,811 | | Gross margin | $50,839 | $54,550 | $101,476 | $112,097 | | Distribution expenses | $17,314 | $15,052 | $35,384 | $31,233 | | Selling, general and administrative expenses | $37,495 | $38,331 | $68,963 | $77,867 | | Goodwill impairment | $33,237 | — | $33,237 | — | | (Loss) income from operations | $(37,207) | $1,167 | $(36,108) | $2,997 | | Interest expense | $(5,054) | $(5,157) | $(9,969) | $(10,771) | | Loss on equity securities | — | $(14,152) | — | $(14,152) | | NET LOSS | $(39,699) | $(18,167) | $(43,900) | $(24,427) | | DILUTED LOSS PER COMMON SHARE | $(1.83) | $(0.85) | $(2.03) | $(1.14) | Balance Sheets The condensed consolidated balance sheets provide a snapshot of Lifetime Brands' financial position as of June 30, 2025, and December 31, 2024, showing a significant increase in cash, a decrease in accounts receivable, and a reduction in intangible assets due to goodwill impairment, with overall decreases in total assets and liabilities Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--------------------------------- | :-------------- | :---------------- | :----------- | :----------- | | Cash and cash equivalents | $12,045 | $2,929 | $9,116 | 311.2% | | Accounts receivable, net | $89,554 | $156,743 | $(67,189) | (42.9)% | | Inventory | $218,208 | $202,408 | $15,800 | 7.8% | | TOTAL CURRENT ASSETS | $336,981 | $373,568 | $(36,587) | (9.8)% | | INTANGIBLE ASSETS, net | $141,657 | $183,527 | $(41,870) | (22.8)% | | TOTAL ASSETS | $551,877 | $634,310 | $(82,433) | (13.0)% | | TOTAL CURRENT LIABILITIES | $126,926 | $151,743 | $(24,817) | (16.3)% | | REVOLVING CREDIT FACILITY | $37,683 | $42,693 | $(5,010) | (11.7)% | | TERM LOAN | $128,456 | $130,949 | $(2,493) | (1.9)% | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $551,877 | $634,310 | $(82,433) | (13.0)% | - The goodwill balance was reduced to zero as of June 30, 2025, following the $33.2 million impairment charge[5][10][25] Statements of Cash Flows The condensed consolidated statements of cash flows for the six months ended June 30, 2025, show an increase in net cash provided by operating activities to $26.1 million, driven by changes in accounts receivable, while net cash used in investing activities increased and net cash used in financing activities decreased significantly Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :----------------------------- | :----------------------------- | :----------- | :----------- | | Net cash provided by operating activities | $26,057 | $20,930 | $5,127 | 24.5% | | Net cash used in investing activities | $(2,746) | $(1,098) | $(1,648) | 150.1% | | Net cash used in financing activities | $(14,363) | $(32,546) | $18,183 | (55.9)% | | Cash and cash equivalents at end of period | $12,045 | $3,396 | $8,649 | 254.7% | - Adjustments to reconcile net loss to net cash provided by operating activities for 2025 include a $33.2 million goodwill impairment and a $67.2 million positive impact from changes in accounts receivable[27]