Lifetime Brands(LCUT) - 2024 Q1 - Quarterly Report

Financial Performance - Consolidated net sales for Q1 2024 were $142.2 million, a decrease of $3.2 million, or 2.2%, compared to $145.4 million in Q1 2023[154]. - U.S. segment net sales for Q1 2024 were $130.5 million, down $3.0 million, or 2.2%, from $133.5 million in Q1 2023[155]. - International segment net sales for Q1 2024 were $11.7 million, a decrease of $0.2 million, or 1.7%, compared to $11.9 million in Q1 2023[159]. - U.S. segment's Kitchenware product category net sales were $83.5 million in Q1 2024, a decrease of $2.2 million, or 2.6%, from $85.7 million in Q1 2023[156]. - U.S. segment's Tableware product category net sales increased to $25.8 million in Q1 2024, up $1.8 million, or 7.5%, from $24.0 million in Q1 2023[157]. Profitability and Margins - Gross margin for Q1 2024 was $57.5 million, or 40.5%, an increase from $53.8 million, or 37.0%, in Q1 2023[160]. - Gross margin for the International segment was $4.2 million, or 35.9%, in Q1 2024, down from $5.0 million, or 42.0%, in Q1 2023[161]. - The company recorded a net loss of 4.4% in Q1 2024, improved from a net loss of 6.1% in Q1 2023[152]. Expenses - Distribution expenses for Q1 2024 were $16.2 million, a decrease from $16.9 million in Q1 2023, with distribution expenses as a percentage of net sales at 11.4%[162]. - Selling, general and administrative expenses for Q1 2024 were $39.5 million, an increase of $1.6 million or 4.2% compared to Q1 2023[165]. - U.S. segment selling, general and administrative expenses were $30.8 million for Q1 2024, representing 23.6% of net sales, up from 21.9% in Q1 2023[166]. - International segment selling, general and administrative expenses were $4.2 million for Q1 2024, accounting for 35.9% of net sales, compared to 30.0% in Q1 2023[167]. Cash Flow and Liquidity - As of March 31, 2024, the company had cash and cash equivalents of $4.6 million, down from $16.2 million at December 31, 2023[176]. - Total liquidity as of March 31, 2024 was $125.1 million, consisting of cash, availability under the ABL Agreement, and funding under the Receivables Purchase Agreement[176]. - Net cash provided by operating activities was $10.5 million for the three months ended March 31, 2024, compared to $12.1 million for the same period in 2023[206]. - Net cash used in financing activities was $21.4 million for the three months ended March 31, 2024, compared to net cash provided of $5.7 million for the same period in 2023[208]. Debt and Interest - Interest expense increased to $5.6 million in Q1 2024 from $5.3 million in Q1 2023 due to higher interest rates on outstanding borrowings[170]. - The interest rate on outstanding borrowings under the Term Loan at March 31, 2024, was 10.94%[191]. - The company has a maximum borrowing capacity of $200.0 million under the ABL Agreement, which may increase to $250.0 million if certain conditions are met[185]. Future Outlook - The Company expects elevated inflation and high interest rates to negatively impact consumer spending and buying patterns in 2024[145]. Other Financial Metrics - The Company’s adjusted EBITDA for the trailing twelve months ended March 31, 2024, was $59.5 million[194]. - Capital expenditures for the three months ended March 31, 2024, were $0.6 million[195]. - As of March 31, 2024, $23.8 million of accounts receivables were available for sale to HSBC, net of applicable charges[200]. - The Company did not sell receivables to HSBC during the three months ended March 31, 2024, and March 31, 2023[200]. - The aggregate gross notional value of foreign exchange contracts at March 31, 2024, was $7.0 million[204]. - The Company has an uncommitted Receivables Purchase Agreement with HSBC, allowing for the sale of eligible accounts receivable up to $30.0 million[199]. - The remaining dollar amount available for stock repurchases under the Board authorized plan was $11.1 million as of March 31, 2024[209]. Equity and Losses - Equity in losses from Vasconia was $2.1 million for Q1 2024, up from $0.7 million in Q1 2023, with Vasconia reporting a loss from operations of $6.9 million[173][174].