lcut-20210310
0000874396FALSE00008743962021-03-102021-03-10


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 10, 2021
__________________________
Lifetime Brands, Inc.
(Exact Name of Registrant as Specified in Its Charter)
__________________________
Delaware0-1925411-2682486
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
1000 Stewart Avenue, Garden City, New York 11530
(Address of Principal Executive Offices) (Zip Code)
516-683-6000
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
__________________________
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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Common Stock, $0.01 par valueLCUTThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐




Item 2.02 Results of Operations and Financial Condition.
On March 10, 2021, Lifetime Brands, Inc. (the “Company”) issued a press release announcing the Company’s results for the fourth quarter ended December 31, 2020. A copy of the Company’s press release is furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statements and Exhibits.
(d)    Exhibits

Exhibit Index
Exhibit No.
99.1
104Cover Page Interactive Data File (formatted in Inline XBRL document)

    



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 10, 2021

Document


Exhibit 99.1

https://cdn.kscope.io/b36dc9330a2b4ee733349b91d8ea2443-g789074g0807061801219a011a.jpg
Lifetime Brands, Inc. Reports Fourth Quarter and Full Year 2020 Financial Results
Declares Regular Quarterly Dividend
GARDEN CITY, NY, March 10, 2021 – Lifetime Brands, Inc. (NasdaqGS: LCUT), a leading global designer, developer and marketer of a broad range of branded consumer products used in the home, today reported its financial results for the quarter and full year ended December 31, 2020.

Robert Kay, Lifetime’s Chief Executive Officer, commented, “We are pleased with our performance in the fourth quarter, which represents another quarter driving significant value for shareholders. Our core U.S. business delivered its sixth consecutive quarter of year-over-year growth driven by increased demand in our kitchenware products. We outperformed in the majority of our categories in both pure play and omnichannel e-commerce, where there was strong demand, and we continue to gain market share across most of our channels. We also achieved meaningful progress in our international business during the fourth quarter, which demonstrated the benefits from the turnaround plan for this business unit that we began executing against in 2019. On a consolidated basis, Lifetime grew sales by nearly 10% in the quarter, which favorably compares to a strong quarter a year ago.”

Mr. Kay continued, “Our strong fourth quarter results capped a truly transformative year for Lifetime Brands, and I’m incredibly proud of what our team accomplished in 2020. Despite the external challenges presented by the global pandemic, net income for the quarter was $15.2 million compared with a net loss of $(14.5) million for the prior period. Correspondingly, we generated $77.3 million in Consolidated Adjusted EBITDA in 2020, an increase of approximately 21% over 2019, by demonstrating strong top line growth and remaining focused on disciplined cost control, which has contributed to making our company a leaner organization. The combination of substantially higher cash flow from operations and a more disciplined approach to managing the balance sheet has allowed us to de-leverage Lifetime to our target levels, notwithstanding meaningful investments in higher inventory levels that we have made over the past six months in order to drive competitive advantage. We have now substantially achieved our Lifetime 2.0 objectives and look forward to driving continued growth and profitability as we enter the next phase of our strategic plan."
Fourth Quarter Financial Highlights:
Consolidated net sales for the three months ended December 31, 2020, were $249.2 million, representing an increase of $22.3 million or 9.8% as compared to $226.9 million for the corresponding period in 2019, led by 10.7% growth in our core U.S. business. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales increased $21.5 million or 9.4% in the fourth quarter of 2020, as compared to consolidated net sales in the corresponding period in 2019.
Gross margin was $88.1 million, or 35.4%, in 2020 as compared to $83.9 million, or 37.0%, for the corresponding period in 2019.
Income from operations was $24.4 million, as compared to loss from operations of $(15.5) million in the prior year's quarter. Excluding a $33.2 million non-cash charge for goodwill impairment, income from operations would have been approximately $17.8 million, in 2019.
Net income was $15.2 million, or $0.70 per diluted share, in the quarter ended December 31, 2020, as compared to net loss of $(14.5) million, or $(0.70) per diluted share, for the corresponding period in 2019.
Adjusted net income was $15.2 million, or $0.70 per diluted share, in the quarter ended December 31, 2020, as compared to adjusted net income of $11.3 million, or $0.54 per diluted share, for the corresponding period in 2019. A table which reconciles this non-GAAP financial measure to net income (loss), as reported, is included below.
1


Full Year Financial Highlights:
Consolidated net sales for the year ended December 31, 2020, were $769.2 million, an increase of $34.3 million, or 4.7%, as compared to consolidated net sales of $734.9 million for the corresponding period in 2019. In constant currency, which excludes the impact of foreign exchange fluctuations, consolidated net sales increased $33.6 million, or 4.6%, as compared to consolidated net sales in the corresponding period in 2019.

Gross margin for 2020 was $274.0 million, or 35.6%, compared to $255.2 million, or 34.7%, for the corresponding period in 2019. Excluding the SKU Rationalization of $8.5 million, the gross margin in the 2019 period would have been 35.9%.
Income from operations was $25.0 million in 2020, as compared to loss from operations of $(23.4) million for the corresponding period in 2019. Income from operations, excluding the impact of certain non-cash charges, was $47.9 million, as compared to $28.1 million for the corresponding period in 2019. A table which reconciles this non-GAAP financial measure to income (loss) from operations, as reported, is included below.
Net loss was $(3.0) million, or $(0.14) per diluted share, in the year ended December 31, 2020, as compared to net loss of $(44.4) million, or $(2.16) per diluted share, in the corresponding period in 2019.
Adjusted net income was $20.2 million, or $0.95 per diluted share, as compared to $9.2 million, or $0.44 per diluted share, in the corresponding period in 2019.
Consolidated adjusted EBITDA, after giving effect to certain adjustments as permitted and defined under our debt agreements, was $77.3 million in the year ended December 31, 2020. A table which reconciles this non-GAAP financial measure to net loss, as reported, is included below.
Dividend
On March 9, 2021, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on May 17, 2021 to shareholders of record on May 3, 2021.
Conference Call

The Company has scheduled a conference call for Wednesday, March 10, 2021 at 11:00 a.m. The dial-in number for the conference call is (866) 610-1072 (U.S.) or (973) 935-2840 (International), Conference ID: 3185706.

A live webcast of the conference call will be accessible through:
https://event.on24.com/wcc/r/3043690/F9E6F0057DE8E9600AAF23880AC539ED

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, including consolidated net sales in constant currency, income from operations excluding certain non-cash charges, adjusted net income, adjusted diluted income per common share, gross margin (excluding non-recurring charges) and consolidated adjusted EBITDA. 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 a 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 financial 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 by investors and analysts. Management uses these non-GAAP financial measures as indicators of business performance. These non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, GAAP financial measures of performance.

2



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. Such statements include all statements regarding the growth of the Company, our financial outlook, our initiatives to create value, our efforts to mitigate geopolitical factors and tariffs, our efforts to stabilize our international business, our current and projected financial and operating performance, results, and profitability and all guidance related thereto, including forecasted exchange rates and effective tax rates, as well as our future plans and intentions regarding the Company and its consolidated subsidiaries. Such statements represent the Company’s current judgments, estimates, and assumptions about possible future events. The Company believes these judgments, estimates, and assumptions are reasonable, but these statements are not guarantees of any events or financial or operational 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; the possibility of impairments to the Company’s goodwill; the possibility of impairments to the Company’s intangible assets; changes in U.S. or foreign trade or tax law and policy; the impact of tariffs on imported goods and materials; 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; customer ordering behavior; the performance of our newer products; the impact of our SKU rationalization initiative, expenses and other challenges relating to the integration of the Filament Brands business and future acquisitions; warehouse consolidation efforts performed by the business; the ongoing reorganization of our U.K. operations; changes in demand for the Company’s products; changes in the Company’s management team; the significant influence of the Company’s largest stockholder; fluctuations in foreign exchange rates; changes in U.S. trade policy or the trade policies of nations in which we or our suppliers do business; uncertainty regarding the long-term ramifications of the U.K.’s exit from the European Union; shortages of and price volatility for certain commodities; global health epidemics, such as the coronavirus outbreak; our expectations regarding the future level of demand for our products; and 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 ability to maintain an appropriate level of debt. The Company undertakes no obligation to update these forward-looking statements other than as required by law.
Lifetime Brands, Inc.
Lifetime Brands is a leading global designer, developer and marketer of a broad range of branded consumer products used in the home. The Company markets its products under well-known kitchenware brands, including Farberware®, KitchenAid®, Sabatier®, Amco Houseworks®, Chef’n® Chicago™ Metallic, Copco®, Fred® & Friends, Houdini™, KitchenCraft®, Kamenstein®, Kizmos™, La Cafetière®, MasterClass®, Misto®, Swing-A-Way®, Taylor® Kitchen and Rabbit®; respected tableware and giftware brands, including Mikasa®, Pfaltzgraff®, Fitz and Floyd®, Creative Tops®, Empire Silver™, Gorham®, International® Silver, Kirk Stieff®, Towle® Silversmiths, Wallace®, Wilton Armetale®, V&A® and Royal Botanic Gardens Kew®; and valued home solutions brands, including BUILT NY®, Taylor® Bath, Taylor® Weather and Planet Box®. 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.
Laurence Winoker, Chief Financial Officer
516-203-3590
investor.relations@lifetimebrands.com
or
Joele Frank, Wilkinson Brimmer Katcher
Ed Trissel / Andrew Squire / Sophie Throsby
212-355-4449
3


LIFETIME BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands - except per share data)

Three Months Ended
December 31,
Year Ended
December 31,
2020
2019
2020
2019
Net sales$249,209 $226,938 $769,169 $734,902 
Cost of sales161,105 143,028 495,171 479,711 
Gross margin88,104 83,910 273,998 255,191 
Distribution expenses22,135 22,605 72,845 72,543 
Selling, general and administrative expenses41,598 43,239 155,872 161,618 
Goodwill and other impairments— 33,242 20,100 42,990 
Restructuring expenses (benefit) (42)316 211 1,435 
Income (loss) from operations
24,413 (15,492)24,970 (23,395)
Interest expense(4,183)(5,275)(17,277)(20,780)
Mark to market gain (loss) on interest rate derivatives
172 (315)(2,144)402 
Income (loss) before income taxes and equity in earnings
20,402 (21,082)5,549 (43,773)
Income tax (provision) benefit
(6,853)5,704 (9,866)(1,109)
Equity in earnings, net of taxes
1,672 8621,310 467 
NET INCOME (LOSS)
$15,221 $(14,516)$(3,007)$(44,415)
Weighted-average shares outstanding—basic20,936 20,660 20,860 20,597 
BASIC INCOME (LOSS) PER COMMON SHARE
0.73 $(0.70)(0.14)$(2.16)
Weighted-average shares outstanding—diluted21,673 20,660 20,860 20,597 
DILUTED INCOME (LOSS) PER COMMON SHARE
0.70 $(0.70)(0.14)$(2.16)

4


LIFETIME BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands - except share data)
December 31,
20202019
ASSETS
CURRENT ASSETS
Cash and cash equivalents$35,963 $11,370 
Accounts receivable, less allowances of $17,013 at December 31, 2020 and $9,681 at December 31, 2019
170,037 128,639 
Inventory203,164 173,427 
Prepaid expenses and other current assets12,129 14,140 
Income taxes receivable— 1,577 
TOTAL CURRENT ASSETS421,293 329,153 
PROPERTY AND EQUIPMENT, net23,120 28,168 
OPERATING LEASE RIGHT-OF-USE ASSETS96,543 106,871 
INVESTMENTS20,032 21,289 
INTANGIBLE ASSETS, net244,025 280,471 
OTHER ASSETS2,468 4,071 
TOTAL ASSETS$807,481 $770,023 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturity of term loan$17,657 $8,413 
Accounts payable66,095 36,173 
Accrued expenses80,050 52,060 
Income taxes payable4,788 — 
Current portion of operating lease liabilities11,480 10,661 
TOTAL CURRENT LIABILITIES180,070 107,307 
OTHER LONG-TERM LIABILITIES16,483 12,214 
INCOME TAXES PAYABLE, LONG-TERM1,444 1,217 
OPERATING LEASE LIABILITIES102,355 112,180 
DEFERRED INCOME TAXES10,714 13,685 
REVOLVING CREDIT FACILITY27,302 32,822 
TERM LOAN238,977 254,281 
STOCKHOLDERS’ EQUITY
Preferred stock, $1.00 par value, shares authorized: 100 shares of Series A and 2,000,000 shares of Series B; none issued and outstanding
— — 
Common stock, $0.01 par value, shares authorized: 50,000,000 at December 31, 2020 and 2019; shares issued and outstanding: 21,755,195 at December 31, 2020 and 21,255,660 at December 31, 2019
218 213 
Paid-in capital268,666 263,386 
Retained earnings
424 7,173 
Accumulated other comprehensive loss
(39,172)(34,455)
TOTAL STOCKHOLDERS’ EQUITY230,136 236,317 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$807,481 $770,023 

5



LIFETIME BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year ended December 31,
20202019
OPERATING ACTIVITIES
Net loss
$(3,007)$(44,415)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization24,664 25,115 
Goodwill and other impairments20,100 42,990 
Amortization of financing costs1,774 1,748 
Mark to market loss (gain) on interest rate derivatives
2,144 (402)
Non-cash lease expense2,379 1,047 
Provision for doubtful accounts, net of (recoveries)3,291 (163)
Deferred income taxes(1,861)(1,073)
Stock compensation expense5,951 5,041 
Undistributed equity (earnings), net of taxes
(1,258)(343)
SKU Rationalization— 8,500 
Changes in operating assets and liabilities (excluding the effects of business acquisitions)
Accounts receivable(43,760)(2,096)
Inventory(28,979)(7,455)
Prepaid expenses, other current assets and other assets1,088 (3,855)
Accounts payable, accrued expenses and other liabilities55,721 5,108 
Income taxes receivable1,577 (135)
Income taxes payable4,989 260 
NET CASH PROVIDED BY OPERATING ACTIVITIES
44,813 29,872 
INVESTING ACTIVITIES
Purchases of property and equipment(2,082)(9,169)
NET CASH USED IN INVESTING ACTIVITIES
(2,082)(9,169)
FINANCING ACTIVITIES
Proceeds from revolving credit facility129,244 345,494 
Repayments of revolving credit facility(135,463)(355,730)
Repayments of Term Loan(7,583)(2,750)
Cash dividends paid(3,651)(3,571)
Payment of finance lease obligations(152)(92)
Proceeds from the exercise of stock options27 132 
Payments of tax withholding for stock based compensation(658)(399)
NET CASH USED IN FINANCING ACTIVITIES
(18,236)(16,916)
Effect of foreign exchange on cash98 (64)
INCREASE IN CASH AND CASH EQUIVALENTS
24,593 3,723 
Cash and cash equivalents at beginning of year11,370 7,647 
CASH AND CASH EQUIVALENTS AT END OF YEAR$35,963 $11,370 

6



LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)
Reconciliation of GAAP to Non-GAAP Operating Results
Consolidated adjusted EBITDA for the year ended December 31, 2020:

Three Months EndedYear Ended
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
December 31, 2020
  (in thousands)  
Net (loss) income as reported
$(28,164)$(3,977)13,913 $15,221 $(3,007)
Subtract out:
Undistributed equity (earnings) losses, net
(339)848 (147)(1,620)(1,258)
Add back:
Income tax (benefit) provision
(3,729)3,031 3,711 6,853 9,866 
Interest expense4,736 4,230 4,128 4,183 17,277 
Depreciation and amortization6,234 6,061 6,090 6,279 24,664 
Mark to market loss (gain) on interest rate derivatives2,251 164 (99)(172)2,144 
Goodwill and other impairments20,100 — — — 20,100 
Stock compensation expense1,326 1,420 1,575 1,630 5,951 
Acquisition related expenses47 55 57 126 285 
Restructuring expenses (benefit)— 253 — (42)211 
Warehouse relocation expenses790 303 — — 1,093 
Consolidated adjusted EBITDA$3,252 $12,388 $29,228 $32,458 $77,326 

Consolidated adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements. Consolidated adjusted EBITDA is defined as net income (loss), adjusted to exclude undistributed equity in (earnings) losses, income tax (benefit) provision, interest expense, depreciation and amortization, mark to market loss (gain) on interest rate derivatives, goodwill and other impairments, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.











7



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 (in thousands - except per share data):
Three Months Ended December 31,
Year Ended December 31,
2020201920202019
Net income (loss) as reported
$15,221 $(14,516)$(3,007)$(44,415)
Adjustments:
Acquisition related expenses126 55 285 206 
Restructuring expenses (benefit)
(42)316 211 1,435 
Integration charges
— 159 — 1,263 
Warehouse relocation expenses
— 1,689 1,093 2,785 
Mark to market (gain) loss on interest rate derivatives
(172)315 2,144 (402)
Goodwill and other impairments
— 33,242 20,100 42,990 
SKU Rationalization— — — 8,500 
Foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss— — 235 — 
Income tax effect on adjustments20 (156)(858)(3,183)
Income tax provision adjustment(1)
— (9,790)— — 
Adjusted net income
$15,153 $11,314 $20,203 $9,179 
Adjusted diluted income per share (2)
$0.70 $0.54 $0.95 $0.44 
Adjusted net income and adjusted diluted income per common share in the three months ended and year ended December 31, 2020 excludes acquisition expenses, restructuring expenses (benefit), warehouse relocation expenses, mark to market (gain) loss on interest rate derivatives, goodwill and other impairments and foreign currency translation losses. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.

Adjusted net income and adjusted diluted income per common share in the three months ended and year ended December 31, 2019 excludes acquisition expenses, restructuring expenses, integration charges, warehouse relocation expenses, mark to market (gain) loss on interest rate derivatives, goodwill and other impairments and SKU rationalization expenses. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.

(1) The income tax provision adjustment is calculated as the difference between the tax benefit of $5.7 million, recorded in net loss for the three month period ended December 31, 2019, and an adjusted tax provision of $(4.1) million for the three month period ended December 31, 2019. The adjusted tax provision was calculated using an effective tax rate of 33.6% on Income before income taxes and equity in earnings excluding certain non-cash charges, for the three month period ended December 31, 2019. The effective tax rate of 33.6% is the effective rate for the three month period ended December 31, 2020 on Income before taxes and equity in earnings excluding certain non-cash charges for the three month period ended December 31, 2020. The income tax provision adjustment for the three month period ended December 31, 2019 provides important comparative analysis because the prior year effective tax method was unusual due to the timing of certain non deductible expenses, including goodwill impairment.


(2)Adjusted diluted income per common share is calculated based on diluted weighted-average shares outstanding of 21,673 and 20,799 for the three month period ended December 31, 2020 and 2019, respectively, and 21,179 and 20,695 for the year ended December 31, 2020 and 2019, respectively. The diluted weighted-average shares outstanding for the three months ended and year ended December 31, 2020 include the effect of dilutive securities of 737 and 319 shares, respectively. The diluted weighted-average shares outstanding for the three months ended and year ended December 31, 2019 include the effect of dilutive securities of 139 and 98 shares, respectively.








8









LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)
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)
Net sales20202019Increase
(Decrease)
20202019Increase
(Decrease)
Currency
Impact
Excluding
Currency
Including
Currency
Currency
Impact
U.S.$220,201 $198,845 $21,356 $220,201 $198,957 $21,244 $(112)10.7 %10.7 %0.0 %
International$29,008 $28,093 $915 $29,008 $28,774 $234 $(681)0.8 %3.3 %2.5 %
Total net sales$249,209 $226,938 $22,271 $249,209 $227,731 $21,478 $(793)9.4 %9.8 %0.4 %

As Reported
Year Ended
December 31,
Constant Currency (1)
Year Ended
December 31,
Year-Over-Year
Increase (Decrease)
Net sales20202019Increase
(Decrease)
20202019Increase
(Decrease)
Currency
Impact
Excluding
Currency
Including
Currency
Currency
Impact
U.S.$683,539 $644,171 $39,368 $683,539 $644,183 $39,356 $(12)6.1 %6.1 %0.0 %
International$85,630 $90,731 $(5,101)$85,630 $91,403 $(5,773)$(672)(6.3)%(5.6)%0.7 %
Total net sales$769,169 $734,902 $34,267 $769,169 $735,586 $33,583 $(684)4.6 %4.7 %0.1 %
(1)“Constant Currency” is determined by applying the 2020 average exchange rates to the prior year local currency 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 sales growth is intended to exclude the impact of fluctuations in foreign currency exchange rates.

9


LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)
Reconciliation of GAAP to Non-GAAP Operating Results (continued)
Income from operations excluding certain non-cash charges (in thousands):

Three Months Ended December 31,Year Ended December 31,
2020201920202019
(in thousands)(in thousands)
Income (loss) from operations
$24,413 $(15,492)$24,970 $(23,395)
Excluded non-cash charges:
Goodwill and other impairments— 33,242 20,100 42,990 
SKU Rationalization— — — 8,500 
Bad debt reserve related to COVID-19 pandemic (1)
— — 2,844 — 
Total excluded non-cash charges$— $33,242 $22,944 $51,490 
Income from operations excluding certain non-cash charges
$24,413 $17,750 $47,914 $28,095 
Interest expense(4,183)(5,275)(17,277)(20,780)
Mark to market gain (loss) on interest rate derivatives
172 (315)(2,144)402 
Income before income taxes and equity in earnings excluding certain non-cash charges$20,402 $12,160 $28,493 $7,717 
(1) Bad debt reserve recorded in the first quarter of fiscal 2020 to establish a provision against potential credit problems from certain retail customers who may have financial difficulty that has been caused or increased due to the COVID-19 pandemic. This reflects the Company's assessment of risk of not being able to collect such receivables from certain customers in the U.S. that are at risk of seeking or have already obtained bankruptcy protection and our international customer base which has a higher proportion of small and independent brick-and-mortar retailers. This charge was taken in response to the Company's assessment on the impact of the COVID-19 pandemic on these accounts
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