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): March 11, 2016
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 March 11, 2016, Lifetime Brands, Inc. (the “Company”) issued a press release announcing the Company’s results for the fourth quarter and year ended December 31, 2015. 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 March 11, 2016 |
Signatures
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 hereunto duly authorized.
| Lifetime Brands, Inc. | ||
| By: | /s/ Laurence Winoker | |
| Laurence Winoker | ||
| Senior Vice President – Finance, Treasurer and Chief Financial Officer | ||
Date: March 11, 2016
Exhibit Index
| Exhibit |
Description | |
| 99.1 | Press release dated March 11, 2016 | |
Exhibit 99.1
Lifetime Brands, Inc. Reports Fourth Quarter 2015 Financial Results
GARDEN CITY, NY, March 11, 2016 – 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 fourth quarter and year ended December 31, 2015.
Fourth Quarter Financial Highlights:
| • | Consolidated net sales were $185.9 million in the quarter ended December 31, 2015; a decrease of $4.1 million, or 2%, as compared to consolidated net sales of $190.0 million for the corresponding period in 2014. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales decreased 1.2%, as compared to consolidated net sales in the corresponding period in 2014. |
| • | Gross margin was $69.0 million, or 37.1%, in the quarter ended December 31, 2015 as compared to $69.8 million, or 36.7%, for the corresponding period in 2014. |
| • | Income from operations was $17.6 million, as compared to $18.3 million in the prior year’s quarter. |
| • | Net income was $11.0 million, or $0.77 per diluted share, in the quarter ended December 31, 2015, as compared to net income of $9.3 million, or $0.66 per diluted share, in the corresponding period in 2014. |
| • | Adjusted net income was $10.8 million, or $0.75 per diluted share, in the quarter ended December 31, 2015, as compared to adjusted net income of $9.4 million, or $0.66 per diluted share, in the corresponding period in 2014. |
| • | Consolidated EBITDA was $23.9 million, equal to 12.9% of consolidated net sales, in the quarter ended December 31, 2015, as compared to $20.9 million, or 11.0% of consolidated net sales, for the corresponding 2014 period. |
| • | Equity in earnings, net of taxes, was $0.7 million for the three months ended December 31, 2015, as compared to equity in losses of $1.1 million for the three months ended December 31, 2014. |
Full Year Financial Highlights:
| • | Consolidated net sales were $587.7 million in the year ended December 31, 2015; an increase of $1.7 million, or 0.3%, as compared to consolidated net sales of $586.0 million for the corresponding period in 2014. In constant currency, consolidated net sales increased 2.3%. |
| • | Gross margin was $214.4 million, or 36.5%, in the year ended December 31, 2015 as compared to $212.9 million, or 36.3%, for the corresponding period in 2014. |
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| • | Income from operations was $24.2 million, as compared to $21.4 million in the prior year. |
| • | Net income was $12.3 million, or $0.86 per diluted share, in the year ended December 31, 2015, as compared to net income of $1.5 million, or $0.11 per diluted share, in the corresponding period in 2014. |
| • | Adjusted net income was $14.2 million, or $1.00 per diluted share, in the year ended December 31, 2015, as compared to adjusted net income of $10.3 million, or $0.73 per diluted share, in the corresponding period in 2014. |
| • | Consolidated EBITDA was $44.9 million in the year ended December 31, 2015, as compared to $42.5 million for the corresponding 2014 period. |
| • | Equity in earnings, net of taxes, was $0.6 million for the year ended December 31, 2015, as compared to equity in losses, net of taxes, of $6.5 million. The 2014 period includes a charge of $6.0 million, net of tax, for the reduction in the fair value of the Company’s investment in GS Internacional S/A. |
Jeffrey Siegel, Lifetime’s Chairman and Chief Executive Officer, commented,
“In 2015, net sales in the Company’s U.S. wholesale segment grew by 3.9%. Sales of kitchenware, tableware and home solutions products all rose, with a particularly strong increase in our home décor product category, where we leveraged the Bombay® license for giftables. In kitchenware, we benefited from strong increases in cutlery and the expansion of our important Farberware® brand, which is increasingly accepted as ‘America’s Housewares Brand.’ Tableware sales also rose, reflecting good reception of several new programs for dinnerware and flatware.
“The strength in the Company’s U.S. operations was offset by currency challenges in the U.K., where our businesses were adversely affected by weakness of the British pound relative to the dollar, which on a relative basis increased cost of goods, which are sourced in dollars, and by weakness of the euro relative to the pound, which hurt export sales. Nevertheless, improved operating margins produced a 5.5% increase in consolidated EBITDA, which grew to $44.9 million.
“With the assistance of a major international consulting firm, we recently began an in-depth review of Lifetime’s U.S. wholesale businesses to ensure that we have the right structure to grow and thrive in today’s complex business environment. The study — which includes evaluations of our divisional organization structure, product pipeline and brand management, as well as SKU rationalization and SG&A spending — will serve as a blueprint to right size Lifetime’s SG&A expense base, realign our operating structure and redirect our operating activities to increase our efficiency and effectiveness. When fully implemented, we believe our business will be in a stronger position to achieve future growth and improved profitability.
“So far this year, we have shown our line-up of new products for 2016 at the Birmingham Spring Fair, at Ambiente in Frankfurt and, just this week, in Chicago at the International Home + Housewares Show. I am very pleased to report that the reaction to our new products was overwhelmingly positive. To succeed with today’s consumers, housewares manufacturers need to deliver improved performance, expanded function and great design. The wide array of new products we offered clearly showed that Lifetime is leading this effort, keeping ahead of the curve on the ever-evolving kitchenware industry.
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“While we believe that our strong position with major retailers in the U.S. and the U.K., our expanding footprint with independent retailers world-wide and the breadth of new product offerings should enable us to grow at an accelerated pace, we are mindful of the risks posed by the possibility of some weakness in the U.S. retail sector, continued foreign exchange challenges and economic uncertainty in some key international markets. Consequently, at this point in the year, we expect low- to mid- single digit overall sales growth for 2016.”
Dividend
On Thursday, March 3, 2016, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on May 16, 2016 to shareholders of record on May 2, 2016.
Conference Call
The Company has scheduled a conference call for Friday, March 11, 2016 at 11:00 a.m. ET. The dial-in number for the conference call is (866) 271-6130 or (617) 213-8894 passcode #85615758. A live webcast of the conference call will be accessible through http://edge.media-server.com/m/p/hnrtzbon. For those who cannot listen to the live broadcast, an audio replay of the webcast will be available.
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.
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
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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 foreign exchange fluctuations; 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. | LHA | |
| Laurence Winoker, Chief Financial Officer | Harriet Fried, SVP | |
| 516-203-3590 | 212-838-3777 | |
| investor.relations@lifetimebrands.com | hfried@lhai.com |
4
LIFETIME BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands - except per share data)
| Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Net sales |
$ | 185,880 | $ | 190,034 | $ | 587,670 | $ | 586,010 | ||||||||
| Cost of sales |
116,865 | 120,260 | 373,284 | 373,129 | ||||||||||||
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| Gross margin |
69,015 | 69,774 | 214,386 | 212,881 | ||||||||||||
| Distribution expenses |
15,437 | 16,134 | 54,815 | 54,202 | ||||||||||||
| Selling, general and administrative expenses |
35,514 | 35,330 | 134,903 | 133,786 | ||||||||||||
| Intangible asset impairment |
— | — | — | 3,384 | ||||||||||||
| Restructuring expenses |
437 | — | 437 | 125 | ||||||||||||
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| Income from operations |
17,627 | 18,310 | 24,231 | 21,384 | ||||||||||||
| Interest expense |
(1,402 | ) | (1,658 | ) | (5,746 | ) | (6,418 | ) | ||||||||
| Financing expense |
— | (758 | ) | (154 | ) | (758 | ) | |||||||||
| Loss on early retirement of debt |
— | (27 | ) | — | (346 | ) | ||||||||||
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| Income before income taxes and equity in earnings |
16,225 | 15,867 | 18,331 | 13,862 | ||||||||||||
| Income tax provision |
(5,962 | ) | (5,473 | ) | (6,627 | ) | (5,825 | ) | ||||||||
| Equity in earnings (losses), net of taxes |
743 | (1,133 | ) | 574 | (6,493 | ) | ||||||||||
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| NET INCOME |
$ | 11,006 | $ | 9,261 | $ | 12,278 | $ | 1,544 | ||||||||
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| Weighted-average shares outstanding- basic |
13,929 | 13,695 | 13,850 | 13,519 | ||||||||||||
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| BASIC INCOME PER COMMON SHARE |
$ | 0.79 | $ | 0.68 | $ | 0.89 | $ | 0.11 | ||||||||
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| Weighted-average shares outstanding- diluted |
14,336 | 14,115 | 14,266 | 13,974 | ||||||||||||
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| DILUTED INCOME PER COMMON SHARE |
$ | 0.77 | $ | 0.66 | $ | 0.86 | $ | 0.11 | ||||||||
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| Cash dividends declared per common share |
$ | 0.0425 | $ | 0.0375 | $ | 0.16 | $ | 0.15 | ||||||||
5
LIFETIME BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands - except share data)
| December 31, | ||||||||
| 2015 | 2014 | |||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash and cash equivalents |
$ | 7,131 | $ | 5,068 | ||||
| Accounts receivable, less allowances of $5,300 at December 31, 2015 and $6,663 at December 31, 2014 |
90,576 | 107,211 | ||||||
| Inventory |
136,890 | 137,924 | ||||||
| Prepaid expenses and other current assets |
8,783 | 7,914 | ||||||
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| TOTAL CURRENT ASSETS |
243,380 | 258,117 | ||||||
| PROPERTY AND EQUIPMENT, net |
24,877 | 26,801 | ||||||
| INVESTMENTS |
24,973 | 28,155 | ||||||
| INTANGIBLE ASSETS, net |
96,593 | 103,597 | ||||||
| DEFERRED INCOME TAXES |
6,486 | — | ||||||
| OTHER ASSETS |
2,643 | 4,732 | ||||||
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| TOTAL ASSETS |
$ | 398,952 | $ | 421,402 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES |
||||||||
| Current maturity of Credit Agreement Term Loan |
$ | 20,000 | $ | 10,000 | ||||
| Short term loan |
252 | 765 | ||||||
| Accounts payable |
27,245 | 28,694 | ||||||
| Accrued expenses |
40,154 | 36,961 | ||||||
| Deferred income taxes |
— | 2,293 | ||||||
| Income taxes payable |
4,064 | 5,156 | ||||||
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| TOTAL CURRENT LIABILITIES |
91,715 | 83,869 | ||||||
| DEFERRED RENT & OTHER LONG-TERM LIABILITIES |
18,556 | 20,160 | ||||||
| DEFERRED INCOME TAXES |
8,596 | 1,485 | ||||||
| REVOLVING CREDIT FACILITY |
65,617 | 92,655 | ||||||
| CREDIT AGREEMENT TERM LOAN |
15,000 | 35,000 | ||||||
| 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: 14,030,221 at December 31, 2015 and 13,712,081 at December 31, 2014 |
140 | 137 | ||||||
| Paid-in capital |
165,780 | 160,315 | ||||||
| Retained earnings |
47,733 | 37,703 | ||||||
| Accumulated other comprehensive loss |
(14,185 | ) | (9,922 | ) | ||||
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| TOTAL STOCKHOLDERS’ EQUITY |
199,468 | 188,233 | ||||||
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 398,952 | $ | 421,402 | ||||
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6
LIFETIME BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year ended December 31, |
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| 2015 | 2014 | |||||||
| OPERATING ACTIVITIES |
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| Net income |
$ | 12,278 | $ | 1,544 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Provision for doubtful accounts |
46 | 286 | ||||||
| Depreciation and amortization |
14,203 | 14,200 | ||||||
| Amortization of financing costs |
641 | 617 | ||||||
| Deferred rent |
848 | (722 | ) | |||||
| Deferred income taxes |
(1,440 | ) | (3,757 | ) | ||||
| Stock compensation expense |
5,286 | 4,493 | ||||||
| Undistributed equity (earnings) losses |
(348 | ) | 6,724 | |||||
| Intangible asset impairment |
— | 3,384 | ||||||
| Loss on early retirement of debt |
— | 346 | ||||||
| Contingent consideration fair value adjustment |
650 | (4,203 | ) | |||||
| Changes in operating assets and liabilities (excluding the effects of business acquisitions) |
||||||||
| Accounts receivable |
15,481 | (6,209 | ) | |||||
| Inventory |
(308 | ) | (6,354 | ) | ||||
| Prepaid expenses, other current assets and other assets |
1,387 | (2,063 | ) | |||||
| Accounts payable, accrued expenses and other liabilities |
(397 | ) | (950 | ) | ||||
| Income taxes payable |
(1,517 | ) | (2,747 | ) | ||||
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| NET CASH PROVIDED BY OPERATING ACTIVITIES |
46,810 | 4,589 | ||||||
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| INVESTING ACTIVITIES |
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| Purchases of property and equipment |
(5,166 | ) | (6,171 | ) | ||||
| Equity investments |
112 | (764 | ) | |||||
| Kitchen Craft acquisition, net of cash acquired |
— | (59,977 | ) | |||||
| Other acquisition, net of cash acquired |
— | (5,389 | ) | |||||
| Net proceeds from sale of property |
26 | 68 | ||||||
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| NET CASH USED IN INVESTING ACTIVITIES |
(5,028 | ) | (72,233 | ) | ||||
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| FINANCING ACTIVITIES |
||||||||
| Proceeds from Revolving Credit Facility |
263,632 | 278,014 | ||||||
| Repayments of Revolving Credit Facility |
(290,346 | ) | (234,067 | ) | ||||
| Repayments of Senior Secured Term Loan |
— | (20,625 | ) | |||||
| Proceeds from Credit Agreement Term Loan |
— | 50,000 | ||||||
| Repayments of Credit Agreement Term Loan |
(10,000 | ) | (5,000 | ) | ||||
| Proceeds from Short Term Loan |
289 | 1,645 | ||||||
| Repayments of Short Term Loan |
(802 | ) | (880 | ) | ||||
| Payment of financing costs |
(212 | ) | (2,283 | ) | ||||
| Cash dividends paid |
(2,150 | ) | (2,031 | ) | ||||
| Payment of capital lease obligations |
(50 | ) | — | |||||
| Payment of contingent consideration |
(391 | ) | — | |||||
| Proceeds from the exercise of stock options |
843 | 2,488 | ||||||
| Excess tax benefits from stock options, net |
43 | 553 | ||||||
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| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES |
(39,144 | ) | 67,814 | |||||
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| Effect of foreign exchange on cash |
(575 | ) | (49 | ) | ||||
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| INCREASE IN CASH AND CASH EQUIVALENTS |
2,063 | 121 | ||||||
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| Cash and cash equivalents at beginning of year |
5,068 | 4,947 | ||||||
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| CASH AND CASH EQUIVALENTS AT END OF YEAR |
$ | 7,131 | $ | 5,068 | ||||
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7
LIFETIME BRANDS, INC.
Supplemental Information
(In thousands)
Reconciliation of GAAP to Non-GAAP Operating Results
Consolidated EBITDA:
| Three Months Ended December 31, |
Year Ended December 31, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income as reported |
$ | 11,006 | $ | 9,261 | $ | 12,278 | $ | 1,544 | ||||||||
| Subtract out: |
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| Undistributed equity (earnings) losses, net |
(517 | ) | 1,364 | (348 | ) | 6,724 | ||||||||||
| Add back: |
||||||||||||||||
| Income tax provision |
5,962 | 5,473 | 6,627 | 5,825 | ||||||||||||
| Interest expense |
1,402 | 1,658 | 5,746 | 6,418 | ||||||||||||
| Financing expense |
— | 758 | 154 | 758 | ||||||||||||
| Depreciation and amortization |
3,500 | 3,572 | 14,203 | 14,200 | ||||||||||||
| Stock compensation expense |
2,972 | 2,360 | 5,286 | 4,493 | ||||||||||||
| Loss on early retirement of debt |
— | 27 | — | 346 | ||||||||||||
| Intangible asset impairment |
— | — | — | 3,384 | ||||||||||||
| Contingent consideration |
(876 | ) | (4,115 | ) | 816 | (3,450 | ) | |||||||||
| Restructuring expenses |
437 | — | 437 | 125 | ||||||||||||
| Permitted acquisition related expenses |
3 | 560 | (314 | ) | 2,175 | |||||||||||
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| Consolidated EBITDA |
$ | 23,889 | $ | 20,918 | $ | 44,885 | $ | 42,542 | ||||||||
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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, certain contingent consideration, certain acquisition related expenses and restructuring expenses, as shown in the tables above.
8
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:
| Three Months Ended December 31, |
Year Ended December 31, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income as reported |
$ | 11,006 | $ | 9,261 | $ | 12,278 | $ | 1,544 | ||||||||
| Adjustments: |
||||||||||||||||
| Contingent consideration |
(724 | ) | (4,203 | ) | 821 | (4,203 | ) | |||||||||
| Impairment of GS Internacional S/A |
— | 764 | — | 6,012 | ||||||||||||
| Intangible asset impairment |
— | — | — | 3,384 | ||||||||||||
| Loss on early retirement of debt |
— | 27 | — | 346 | ||||||||||||
| Acquisition related expenses (recoveries), net |
3 | 574 | (382 | ) | 2,176 | |||||||||||
| Financing expenses |
— | 758 | 154 | 758 | ||||||||||||
| Restructuring expenses |
437 | — | 437 | 125 | ||||||||||||
| Deferred tax for foreign currency translation for Grupo Vasconia |
(28 | ) | 1,063 | 1,303 | 1,063 | |||||||||||
| Income tax effect on adjustments |
114 | 1,135 | (412 | ) | (942 | ) | ||||||||||
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| Adjusted net income |
$ | 10,808 | $ | 9,379 | $ | 14,199 | $ | 10,263 | ||||||||
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| Adjusted diluted income per common share |
$ | 0.75 | $ | 0.66 | $ | 1.00 | $ | 0.73 | ||||||||
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Adjusted net income in the three months and year ended December 31, 2015 excludes the fair value adjustment of certain contingent consideration, acquisition related expenses, the recovery of acquisition related expenses for an acquisition not completed, financing expenses and deferred tax expense related to our equity earnings of Vasconia due to recording the tax benefit of cumulative translation losses through other comprehensive income. Adjusted net income in the three months and year ended December 31, 2014 excludes certain acquisition related expenses, the loss on retirement of debt, restructuring expenses, intangible asset impairment, the impairment of the Company’s investment in GS Internacional S/A and deferred tax expense related to our equity earnings of Vasconia due to recording the tax benefit of cumulative translation losses through other comprehensive income.
9
LIFETIME BRANDS, INC.
Supplemental Information
(In thousands- except per share data)
Reconciliation of GAAP to Non-GAAP Operating Results (continued)
Constant Currency:
| As Reported Three Months Ended December 31, |
Constant Currency (1) Three Months Ended December 31, |
Year-Over-Year Increase (Decrease) |
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| Net sales | 2015 | 2014 | Increase (Decrease) |
2015 | 2014 | Increase (Decrease) |
Currency Impact |
Excluding Currency |
Including Currency |
Currency Impact |
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| U.S. Wholesale |
$ | 146,883 | $ | 145,138 | $ | 1,745 | $ | 146,883 | $ | 144,929 | $ | 1,954 | $ | (209 | ) | 1.3 | % | 1.2 | % | (0.1 | )% | |||||||||||||||||||
| International |
31,359 | 37,261 | (5,902 | ) | 31,359 | 35,667 | (4,308 | ) | (1,594 | ) | (12.1 | )% | (15.8 | )% | (3.8 | )% | ||||||||||||||||||||||||
| Retail Direct |
7,638 | 7,635 | 3 | 7,638 | 7,635 | 3 | — | 0.0 | % | 0.0 | % | — | % | |||||||||||||||||||||||||||
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| Total net sales |
$ | 185,880 | $ | 190,034 | $ | (4,154 | ) | $ | 185,880 | $ | 188,231 | $ | (2,351 | ) | $ | (1,803 | ) | (1.2 | )% | (2.2 | )% | (0.9 | )% | |||||||||||||||||
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| As Reported Year Ended December 31, |
Constant Currency (1) Year Ended December 31, |
Year-Over-Year Increase (Decrease) |
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| Net sales | 2015 | 2014 | Increase (Decrease) |
2015 | 2014 | Increase (Decrease) |
Currency Impact |
Excluding Currency |
Including Currency |
Currency Impact |
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| U.S. Wholesale |
$ | 458,593 | $ | 441,293 | $ | 17,300 | $ | 458,593 | $ | 440,839 | $ | 17,754 | $ | (454 | ) | 4.0 | % | 3.9 | % | (0.1 | )% | |||||||||||||||||||
| International |
108,000 | 125,230 | (17,230 | ) | 108,000 | 114,373 | (6,373 | ) | (10,857 | ) | (5.6 | )% | (13.8 | )% | (8.2 | )% | ||||||||||||||||||||||||
| Retail Direct |
21,077 | 19,487 | 1,590 | 21,077 | 19,487 | 1,590 | — | 8.2 | % | 8.2 | % | — | % | |||||||||||||||||||||||||||
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| Total net sales |
$ | 587,670 | $ | 586,010 | $ | 1,660 | $ | 587,670 | $ | 574,699 | $ | 12,971 | $ | (11,311 | ) | 2.3 | % | 0.3 | % | (2.0 | )% | |||||||||||||||||||
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| (1) | “Constant Currency” is determined by applying the 2015 average exchange rates to the prior year local currency net 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 net sales growth excludes the impact of currency. |
10