Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 6, 2014

 

 

Lifetime Brands, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

(State or Other Jurisdiction of Incorporation)

 

0-19254   11-2682486

(Commission

File Number)

 

(IRS Employer

Identification No.)

1000 Stewart Avenue, Garden City, New York 11530

(Address of Principal Executive Offices) (Zip Code)

(Registrant’s Telephone Number, Including Area Code) 516-683-6000

(Former Name or Former Address, if Changed Since Last Report) N/A

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On November 6, 2014, Lifetime Brands, Inc. (the “Company”) issued a press release announcing the Company’s results for the third quarter ended September 30, 2014. A copy of the Company’s press release is furnished as Exhibit 99.1 hereto.


Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

99.1    Press release dated November 6, 2014


Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Lifetime Brands, Inc.
By:  

/s/ Laurence Winoker

 

Laurence Winoker

Senior Vice President—Finance, Treasurer and Chief Financial Officer

Date: November 6, 2014

EX-99.1

Exhibit 99.1

 

LOGO

Lifetime Brands, Inc. Reports Third Quarter Financial Results

Company Reports Record Third Quarter Net Sales and EBITDA

Growth from Acquisitions and International Expansion Offsets Modest Weakness in North America

GARDEN CITY, NY, —November 6, 2014—Lifetime Brands, Inc. (NasdaqGS: LCUT), a leading global provider of branded kitchenware, tableware and other products used in the home, today reported its financial results for the third quarter ended September 30, 2014.

Third Quarter Financial Highlights:

 

    Consolidated net sales were $162.2 million, as compared to consolidated net sales of $142.2 million for the corresponding period in 2013. Consolidated net sales included $20.7 million of net sales from Kitchen Craft and other acquisitions that were completed in 2014.

 

    Gross margin was $57.9 million, or 35.7%, as compared to $51.3 million, or 36.1%, for the corresponding period in 2013.

 

    Income from operations before Intangible asset impairment and Restructuring expenses was $11.8 million in both the 2014 and 2013 periods.

 

    Income from operations was $8.4 million, as compared to $11.7 million, for the corresponding period in 2013.

 

    Net income (loss) was $(1.6 million), or $(0.12) per diluted share, as compared to net income of $1.1 million, or $0.08 per diluted share, in the corresponding period in 2013.

 

    Adjusted net income was $5.7 million, or $0.41 per diluted share, as compared to $6.1 million, or $0.47 per diluted share, in the corresponding period in 2013.

 

    Consolidated EBITDA was $16.5 million, as compared to $15.1 million for the corresponding 2013 period.

 

    Equity in losses, net of taxes, was $5.2 million, including a charge of $5.2 million, net of tax, for the reduction in the fair value of the Company’s investment in GS Internacional S/A, as compared to $5.5 million, including a charge of $5.0 million, net of tax, for the reduction in the fair value of the Company’s investment in Grupo Vasconia SAB, in the corresponding 2013 period.

Nine Months Financial Highlights:

 

    Consolidated net sales were $396.0 million, as compared to net sales of $337.9 million for the corresponding period in 2013. Consolidated net sales in the nine months ended September 30, 2014 included $53.9 million of net sales from Kitchen Craft and other acquisitions that were completed in 2014.

 

1


    Gross margin was $143.1 million, or 36.1%, as compared to $123.9 million, or 36.7%, for the corresponding period in 2013.

 

    Income from operations before Intangible asset impairment and Restructuring expenses was $6.6 million, as compared to $12.0 million in the 2013 period.

 

    Income from operations was $3.1 million, as compared to $11.6 million, for the corresponding period in 2013.

 

    Net income (loss) was $(7.7 million), or $(0.57) per diluted share, as compared to net income (loss) of $(0.1 million), or $(0.01) per diluted share, in the 2013 period.

 

    Adjusted net income was $0.9 million, or $0.06 per diluted share, as compared to $4.4 million, or $0.34 per diluted share, in the 2013 period.

 

    Consolidated EBITDA was $21.6 million, as compared to $22.5 million for the corresponding 2013 period.

 

    Equity in losses, net of taxes was $5.4 million, including a charge of $5.2 million, net of tax, for the reduction in the fair value of the Company’s investment in GS Internacional S/A, in the nine months ended September 30, 2014 as compared to $5.1 million, including a charge of $5.0 million, net of tax, for the reduction in the fair value of the Company’s investment in Grupo Vasconia SAB, in the corresponding 2013 period.

Jeffrey Siegel, Lifetime’s Chairman and Chief Executive Officer, commented,

“Despite a continuation of the tough retail environment, Lifetime delivered record sales of $162.2 million and record EBITDA of $16.5 million, largely due to the success of our acquisition strategy and international expansion.

“Net sales for the quarter ended September 30, 2014 increased by $20.0 million, or 14.1%, to a record $162.2 million. The increase includes $20.7 million in net sales attributable to businesses that we acquired in 2014.

“Wholesale net sales in the U.S. decreased 3.7% organically, primarily due to a decrease in sales of kitchenware products to warehouse clubs. This decrease was partially offset by sales attributable to Built, which we acquired in 2014, and by organic increases in sales of tableware and other products.

“Outside the U.S., wholesale net sales increased by $22.8 million, primarily due to the inclusion of Kitchen Craft and La Cafetière, which were acquired in 2014, and to higher sales at Creative Tops and sales to Walmart stores in China. Gross margin increased by 440 basis points to 35.2%, driven principally by the inclusion of net sales of higher margin kitchenware products at Kitchen Craft.

“I am pleased to note that Grupo Vasconia, our Partner Company in Mexico, is overcoming the challenges it faced in 2013 and recorded improvement in both its kitchenware and commercial aluminum businesses. For the quarter, Vasconia reported income from operations of $1.7 million, as compared to a loss in the 2013 period. Equity in earnings was $0.3 million, compared to equity in losses of $5.3 million in the 2013 period.

 

2


“In Brazil, our Partner Company GS Internacional is making strides in transforming itself into a leader in the mass market and recently was appointed Category Advisor for kitchenware, cutlery & cutting boards at one of Brazil’s largest mass market retailers. While we have confidence in the ultimate success of our investment in GS, we are taking a non-cash charge of $5.2 million to reflect GS’s current operating results and current economic conditions in Brazil.

“Our home décor products category has experienced a decline in sales and profit in the recent years. We have made some progress in restructuring that business by re-branding a portion of our home décor products under the Mikasa®, and Pfaltzgraff® trade names and, more recently, through the acquisition of the Bombay® license for decorative accessories. As a result of these factors, we are taking a non-cash impairment charge of $3.4 million with respect to certain trade names that previously represented significant portions of our home décor sales.

“Reflecting the outlook for ongoing weakness in sales of certain product categories in the U.S., we are reducing our sales guidance for the year to $590 million from the $600 million that we previously had forecast.”

Dividend

On Wednesday, November 5, 2014, the Board of Directors declared a quarterly dividend of $0.0375 per share payable on February 13, 2015 to shareholders of record on January 30, 2015.

Conference Call

The Company has scheduled a conference call for Thursday, November 6, 2014 at 11:00 a.m. ET. The dial-in number for the conference call is (877) 415-3183 or (857) 244-7326 passcode #25056533. A replay of the call will also be available through Thursday, November 13, 2014 and can be accessed by dialing (888) 286-8010 or (617) 801-6888, conference ID #42073527. A live webcast of the conference call will be broadcast in the Investor Relations section of the Company’s web site, www.lifetimebrands.com. For those who cannot listen to the live broadcast, an audio replay of the call will also be available on the site.

Non-GAAP Financial Measures

This earnings release contains non-GAAP financial measures. 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 the 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. As required by SEC rules, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because management of the Company 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 comparison of the Company’s operating performance. Management uses this non-GAAP information as an indicator of business performance. These non-GAAP measures should be viewed as a supplement to, and not a substitute for, GAAP measures of performance.

 

3


Forward-Looking Statements

In this press release, the use of the words “believe,” “could,” “expect,” “may,” “positioned,” “project,” “projected,” “should,” “will,” “would” or similar expressions is intended to identify forward-looking statements that represent the Company’s current judgment about possible future events. The Company believes these judgments are reasonable, but these statements are not guarantees of any events or financial 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; changes in general economic conditions which could affect customer payment practices or consumer spending; the impact of changes in general economic conditions on the Company’s customers; changes in demand for the Company’s products; shortages of and price volatility for certain commodities; 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 an appropriate level of debt.

Lifetime Brands, Inc.

Lifetime Brands is a leading global provider of kitchenware, tableware and other products used in the home. The Company markets its products under such well-known kitchenware brands as Farberware®, KitchenAid®, Cuisine de France®, Fred® & Friends, Guy Fieri®, Kitchen Craft®, Kizmos™, La Cafetière®, Misto®, Mossy Oak®, Pedrini®, Sabatier®, Savora™ and Vasconia®; respected tableware brands such as Mikasa®, Pfaltzgraff®, Creative Tops®, Gorham®, International® Silver, Kirk Stieff®, Sasaki®, Towle® Silversmiths, Tuttle®, Wallace®, V&A® and Royal Botanic Gardens Kew®; and home solutions brands, including Kamenstein®, Bombay®, BUILT®, Debbie Meyer® and Design for Living™. 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.   Lippert/Heilshorn & Assoc.

Laurence Winoker, Chief Financial Officer

516-203-3590

investor.relations@lifetimebrands.com

 

Harriet Fried, SVP

212-838-3777

hfried@lhai.com

 

4


LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands—except per share data)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2014     2013     2014     2013  

Net sales

   $ 162,244      $ 142,229      $ 395,976      $ 337,862  

Cost of sales

     104,321        90,952        252,869        213,917  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     57,923        51,277        143,107        123,945  

Distribution expenses

     13,262        10,564        38,068        31,489  

Selling, general and administrative expenses

     32,849        28,941        98,456        80,499  

Intangible asset impairment

     3,384        —          3,384        —     

Restructuring expenses

     —          79        125        367  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     8,428        11,693        3,074        11,590  

Interest expense

     (1,698     (1,280     (4,760     (3,591 )

Loss on early retirement of debt

     —          —          (319     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes and equity in earnings

     6,730        10,413        (2,005     7,999  

Income tax provision

     (3,123     (3,869     (352     (2,993 )

Equity in losses, net of taxes

     (5,193     (5,451     (5,360     (5,113 )
  

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

   $ (1,586   $ 1,093      $ (7,717   $ (107 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares outstanding—basic

     13,619        12,707        13,460        12,758  
  

 

 

   

 

 

   

 

 

   

 

 

 

BASIC INCOME (LOSS) PER COMMON SHARE

   $ (0.12   $ 0.09      $ (0.57   $ (0.01 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares outstanding—diluted

     13,619        13,046        13,460        12,758  
  

 

 

   

 

 

   

 

 

   

 

 

 

DILUTED INCOME (LOSS) PER COMMON SHARE

   $ (0.12   $ 0.08      $ (0.57   $ (0.01 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per common share

   $ 0.0375      $ 0.03125      $ 0.1125      $ 0.09375  

 

5


LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands—except share data)

(unaudited)

 

     September 30,
2014
    December 31,
2013
 
     (unaudited)        

ASSETS

    

CURRENT ASSETS

    

Cash and cash equivalents

   $ 4,977      $ 4,947   

Accounts receivable, less allowances of $6,983 at September 30, 2014 and $5,209 at December 31, 2013

     101,765       87,217   

Inventory

     170,320       112,791   

Prepaid expenses and other current assets

     9,014       5,781   

Deferred income taxes

     3,938       3,940   
  

 

 

   

 

 

 

TOTAL CURRENT ASSETS

     290,014       214,676   

PROPERTY AND EQUIPMENT, net

     26,953       27,698   

INVESTMENTS

     30,893       36,948   

INTANGIBLE ASSETS, net

     105,640       55,149   

OTHER ASSETS

     3,164       2,268   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 456,664     $ 336,739   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

CURRENT LIABILITIES

    

Current maturity of Credit Agreement Term Loan

   $ 10,000     $ —     

Current maturity of Senior Secured Term Loan

     —          3,937   

Short term loan

     951       —     

Accounts payable

     42,801       21,426   

Accrued expenses

     36,852       41,095   

Income taxes payable

     345       3,036   
  

 

 

   

 

 

 

TOTAL CURRENT LIABILITIES

     90,949       69,494   

DEFERRED RENT & OTHER LONG-TERM LIABILITIES

     21,826       18,644   

DEFERRED INCOME TAXES

     10,499       1,777   

REVOLVING CREDIT FACILITY

     113,062       49,231   

CREDIT AGREEMENT TERM LOAN

     37,500       —     

SENIOR SECURED TERM LOAN

     —          16,688   

STOCKHOLDERS’ EQUITY

    

Preferred stock, $.01 par value, shares authorized: 100 shares of Series A and 2,000,000 shares of Series B; none issued and outstanding

     —          —     

Common stock, $.01 par value, shares authorized: 25,000,000; shares issued and outstanding: 13,681,189 at September 30, 2014 and 12,777,407 at December 31, 2013

     138       128   

Paid-in capital

     158,971       146,273   

Retained earnings

     28,956       38,224   

Accumulated other comprehensive loss

     (5,237 )     (3,720
  

 

 

   

 

 

 

TOTAL STOCKHOLDERS’ EQUITY

     182,828       180,905   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 456,664     $ 336,739   
  

 

 

   

 

 

 

 

6


LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 

     Nine Months Ended
September 30,
 
     2014     2013  

OPERATING ACTIVITIES

    

Net loss

   $ (7,717 )   $ (107 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

    

Provision for doubtful accounts

     133       17  

Depreciation and amortization

     10,628       7,707  

Amortization of financing costs

     465       397  

Deferred rent

     (623 )     (721 )

Deferred income taxes

     (212 )     26  

Stock compensation expense

     2,133       2,131  

Undistributed equity in losses, net

     5,360       5,686  

Intangible asset impairment

     3,384       —     

Loss on early retirement of debt

     319       —     

Changes in operating assets and liabilities (excluding the effects of business acquisitions)

    

Accounts receivable

     587       4,177  

Inventory

     (37,479 )     (28,469 )

Prepaid expenses, other current assets and other assets

     (1,889 )     (1,391 )

Accounts payable, accrued expenses and other liabilities

     10,985       20,266  

Income taxes payable

     (7,535 )     (3,885 )
  

 

 

   

 

 

 

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

     (21,461 )     5,834  
  

 

 

   

 

 

 

INVESTING ACTIVITIES

    

Purchases of property and equipment

     (4,410 )     (2,772 )

Kitchen Craft acquisition, net of cash acquired

     (59,977 )     —     

Other acquisitions, net of cash acquired

     (5,280 )     —     

Net proceeds from sale of property

     70       7  
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (69,597 )     (2,765 )
  

 

 

   

 

 

 

FINANCING ACTIVITIES

    

Proceeds from Revolving Credit Facility

     206,193       155,929  

Repayments of Revolving Credit Facility

     (142,114 )     (151,794 )

Repayments of Senior Secured Term Loan

     (20,625 )     (3,500 )

Proceeds from Credit Agreement Term Loan

     50,000       —     

Repayment of Credit Agreement Term Loan

     (2,500 )     —     

Proceeds from Short Term Loan

     1,168       —     

Payments on Short Term Loan

     (217 )     —     

Payment of financing costs

     (1,375 )     —     

Payments for common stock repurchases

     —          (3,229 )

Proceeds from exercise of stock options

     2,192       943  

Cash dividends paid

     (1,517 )     (1,117 )
  

 

 

   

 

 

 

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

     91,205       (2,768 )
  

 

 

   

 

 

 

Effect of foreign exchange on cash

     (117 )     431  

INCREASE IN CASH AND CASH EQUIVALENTS

     30       732  
  

 

 

   

 

 

 

Cash and cash equivalents at beginning of period

     4,947       1,871  
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

   $ 4,977     $ 2,603  
  

 

 

   

 

 

 

 

7


LIFETIME BRANDS, INC.

Supplemental Information

(In thousands)

 

     Consolidated EBITDA for
the Four Quarters Ended
September 30, 2014(1)
 

Three months ended September 30, 2014

   $ 16,470   

Three months ended June 30, 2014

     1,494   

Three months ended March 31, 2014

     3,660   

Three months ended December 31, 2013

     21,011   
  

 

 

 

Total for the four quarters

   $ 42,635  
  

 

 

 
     Consolidated EBITDA for
the Four Quarters Ended
September 30, 2013
 

Three months ended September 30, 2013

   $ 15,067   

Three months ended June 30, 2013

     4,321   

Three months ended March 31, 2013

     3,079   

Three months ended December 31, 2012

     17,868   
  

 

 

 

Total for the four quarters

   $ 40,335   
  

 

 

 

 

(1)  Consolidated EBITDA for the four quarters ended September 30, 2014 excludes the effect of a pro forma acquisition adjustment of $3.0 million.

Reconciliation of GAAP to Non-GAAP Operating Results

Consolidated EBITDA:

 

     Three Months Ended  
     September 30,
2014
    June 30,
2014
    March 31,
2014
    December 31,
2013
 

Net income (loss) as reported

   $ (1,586   $ (3,202 )   $ (2,929   $ 9,388  

Subtract out:

        

Undistributed equity in (earnings) losses, net

     5,193        (41 )     208        (332 )

Add back:

        

Income tax provision (benefit)

     3,123        (1,586 )     (1,185     6,182  

Interest expense

     1,698        1,672       1,390        1,256  

Loss on early retirement of debt

     —          —          319        102  

Intangible asset impairment

     3,384        —          —          —     

Depreciation and amortization

     3,299        3,716       3,613        2,708  

Stock compensation expense

     694        713       726        750  

Contingent consideration accretion

     665        —          —          —     

Permitted acquisition related expenses

     —          97       1,518        957  

Restructuring expenses

     —          125       —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated EBITDA

   $ 16,470      $ 1,494     $ 3,660      $ 21,011  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

8


LIFETIME BRANDS, INC.

Supplemental Information

(In thousands)

Reconciliation of GAAP to Non-GAAP Operating Results (continued)

Consolidated EBITDA:

 

     Three Months Ended  
     September 30,
2013
     June 30,
2013
    March 31,
2013
    December 31,
2012
 

Net income (loss) as reported

   $ 1,093       $ (568 )   $ (632   $ 15,154   

Subtract out:

         

Undistributed equity in (earnings) losses, net

     5,452         480       (246     (4,464

Add back:

         

Income tax provision (benefit)

     3,869         (477 )     (399     2,596   

Interest expense

     1,280         1,149       1,162        1,254   

Depreciation and amortization

     2,517         2,667       2,523        2,446   

Stock compensation expense

     738         722       671        662   

Permitted acquisition related expenses

     39         60       —          220   

Restructuring expenses

     79         288       —          —     
  

 

 

    

 

 

   

 

 

   

 

 

 

Consolidated EBITDA

   $ 15,067       $ 4,321     $ 3,079      $ 17,868   
  

 

 

    

 

 

   

 

 

   

 

 

 

Consolidated EBITDA is a non-GAAP measure that the Company defines as net income (loss), adjusted to exclude undistributed equity in earnings (losses), income taxes, interest, losses on early retirement of debt, depreciation and amortization, stock compensation expense, intangible asset impairment, accretion of contingent consideration, acquisition related expenses and restructuring expenses, as shown in the tables above.

 

9


LIFETIME BRANDS, INC.

Supplemental Information

(In thousands—except per share data)

Reconciliation of GAAP to Non-GAAP Operating Results (continued)

Adjusted net loss and adjusted diluted loss per common share:

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2014     2013     2014     2013  

Net income (loss) as reported

   $ (1,586   $ 1,093      $ (7,717   $ (107

Adjustments:

        

Acquisition related expenses, net of tax

     —          —          1,057        —     

Loss on early retirement of debt, net of tax

     —          —          191        —     

Restructuring expenses, net of tax

     —          47        75        220   

Intangible asset impairment

     2,030        —          2,030        —     

Impairment of GS Internacional S/A

     5,248        —          5,248        —     

Impairment of Grupo Vasconia investment, net of tax

     —          5,040        —          5,040   

Grupo Vasconia recovery of value-added taxes

     —          (68     —          (740
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income

   $ 5,692      $ 6,112      $ 885      $ 4,413   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted diluted income per share

   $ 0.41      $ 0.47      $ 0.06      $ 0.34   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income in the three and nine months ended September 30, 2014 excludes acquisition related expenses, the loss on retirement of debt, restructuring expenses, intangible asset impairment and impairment of the Company’s investment in GS Internacional S/A. Adjusted net loss in the three and nine months ended September 30, 2013 excludes restructuring expenses related to the planned closure of the Fred®& Friends distribution center , impairment of the Company’s investment in Grupo Vasconia and a recovery by Grupo Vasconia of value-added taxes related to a 2004 tax position.

 

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