Lifetime Brands, Inc. Reports Second Quarter 2022 Financial Results

Declares Regular Quarterly Dividend


GARDEN CITY, N.Y., Aug. 04, 2022 (GLOBE NEWSWIRE) -- 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 ended June 30, 2022.

Rob Kay, Lifetime’s Chief Executive Officer, commented, “Our performance in the second quarter, while remaining strong compared to pre-pandemic levels, was impacted by the macroeconomic challenges that companies across industries and retailers in particular continue to face. Inflation and supply chain disruptions, have created inventory buildup in the retail channel and weaker end market demand as these impacts created a slowdown in durable good purchases from consumers and all channels of retail this quarter. Despite this environment, we were pleased to record results that exceeded pre-pandemic levels, which is a testament to the progress the Company has made executing on our strategy. We believe we have positioned Lifetime to navigate these headwinds and we have taken a number of mitigating actions, including implementing pricing adjustments where possible and reducing our SG&A over the course of 2022. Our business model has proven resilient through all market cycles, and we are confident that we are on the right path.”

Mr. Kay continued, “In light of the current environment and our results in the second quarter, we are revising our outlook for the full year 2022. We now expect our net sales to be in the range of $800 million to $850 million and our Adjusted EBITDA to be in the range of $73 million and $79 million. Looking ahead, we will continue to be proactive and nimble in managing through this environment, and we are focused on maintaining a healthy balance sheet and strong cash flows to maximize our operating flexibility.”

Second Quarter Financial Highlights:

Consolidated net sales for the three months ended June 30, 2022 were $151.3 million, representing a decrease of $35.3 million, or 18.9%, as compared to net sales of $186.6 million for the corresponding period in 2021. In constant currency, a non-GAAP financial measure, consolidated net sales decreased by $33.6 million, or 18.2%, as compared to consolidated net sales in the corresponding period in 2021. A table reconciling this non-GAAP financial measure to consolidated net sales, as reported, is included below.

Gross margin for the three months ended June 30, 2022 was $55.2 million, or 36.5%, as compared to $66.2 million, or 35.4%, for the corresponding period in 2021.

Loss from operations was $(0.5) million, as compared to income from operations of $11.0 million for the corresponding period in 2021.

Net loss was $(3.5) million, or $(0.16) per diluted share, as compared to net income of $5.8 million, or $0.26 per diluted share, in the corresponding period in 2021.

Adjusted net loss was $(2.9) million, or $(0.14) per diluted share, as compared to adjusted net income of $6.1 million, or $0.28 per diluted share, in the corresponding period in 2021. A table reconciling this non-GAAP financial measure to net (loss) income, as reported, is included below.

Six Months Financial Highlights:

Consolidated net sales for the six months ended June 30, 2022 were $334.0 million, a decrease of $48.3 million, or 12.6%, as compared to net sales of $382.3 million for the corresponding period in 2021. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2022 average rates to 2021 local currency amounts, consolidated net sales decreased by $46.3 million, or 12.2%, as compared to consolidated net sales in the corresponding period in 2021.

Gross margin for the six months ended June 30, 2022 was $118.2 million, or 35.4%, as compared to $132.2 million, or 34.6%, for the corresponding period in 2021.

Income from operations was $3.9 million, as compared to $20.2 million for the corresponding period in 2021.

Net loss was $(3.1) million, or $(0.14) per diluted share, as compared to net income of $8.9 million, or $0.40 per diluted share, in the corresponding period in 2021.

Adjusted net loss was $(1.5) million, or $(0.07) per diluted share, as compared to adjusted net income of $8.9 million, or $0.41 per diluted share, in the corresponding period in 2021. A table reconciling this non-GAAP financial measure to net (loss) income, as reported, is included below.

Adjusted EBITDA was $79.9 million for the twelve months ended June 30, 2022. Pro forma adjusted EBITDA was $83.4 million for the twelve months ended June 30, 2022. Adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements. A table reconciling this non-GAAP financial measure to net income, as reported, is included below.

Full Year 2022 Guidance Update

For the full fiscal year ending December 31, 2022, the Company is providing revised financial guidance:

 Year Ended
December 31, 2021
 Guidance for the
Year Ending
December 31, 2022
Net sales$862.9 million $800 to $850 million
Income from operations$50.8 million $44 to $50 million
Adjusted income from operations$66.7 million(1) $49 to $55 million
Net income$20.8 million $20 to $24 million
Adjusted net income$36.8 million $22 to $26 million
Diluted income per common share$0.94 per share $0.91 to $1.09 per share
Adjusted diluted income per common share$1.67 per share $1.00 to $1.19 per share
Weighted-average diluted shares22 million 22 million
Adjusted EBITDA$95.1 million $73 to $79 million

This guidance is based on a forecasted GBP to USD rate of $1.21. Net income and diluted income per common share were calculated based on an effective tax rate of 30%. Guidance includes S'well from March 2, 2022, the date of its acquisition. Tables reconciling non-GAAP financial measures to GAAP financial measures, as reported, are included below.

(1) Adjusted income from operations for the year ended December 31, 2021 has been recast to reflect adjustments for charges related to acquisition expenses and warehouse relocation expenses. A table reconciling this non-GAAP financial measure to income from operations, as reported, is included below.

Dividend

On August 2, 2022, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on November 15, 2022 to stockholders of record on November 1, 2022.

Conference Call
The Company has scheduled a conference call for Thursday, August 4, 2022 at 11:00 a.m. The dial-in number for the conference call is (866) 682-6100 (U.S.) or (404) 267-0373 (International).

A live webcast of the conference call will be accessible through:

https://event.choruscall.com/mediaframe/webcast.html?webcastid=f9TCNbsQ 

For those who cannot listen to the live broadcast, an audio replay of the webcast will be available until February 4, 2023.

Non-GAAP Financial Measures

This earnings release contains non-GAAP financial measures, including consolidated net sales in constant currency, adjusted (loss) income from operations, adjusted net (loss) income, adjusted diluted (loss) income per common share, adjusted EBITDA and pro forma 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. These non-GAAP financial measures are provided because the Company's management 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 period-to-period 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. As required by SEC rules, the Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Forward-Looking Statements

In this press release, the use of the words “believe,” “could,” “expect,” “intend,” “maintain,” “may,” “positioned,” “project,” “projected,” “should,” “will,” “would”, “plan”, “goal”, “target” or similar expressions is intended to identify forward-looking statements. Such statements include all statements regarding the growth of the Company, our financial guidance, our ability to navigate the current environment and advance our strategy, our commitment to increasing investments in future growth initiatives, our initiatives to create value, our efforts to mitigate geopolitical factors and tariffs, 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 continued growth and success, 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, as well as to deleverage its balance sheet; 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; changes in general economic conditions that could affect customer purchasing 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; expenses and other challenges relating to the integration of any future acquisitions; 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 COVID-19 pandemic; social unrest, including related protests and disturbances; conflict or war, including the conflict in Ukraine; macroeconomic conditions, including inflationary impacts and disruptions to the global supply chain; increase in supply chain costs; the imposition of tariffs and other trade policies and/or economic sanctions implemented by the U.S. and other governments; our ability to successfully integrate acquired businesses, including our recent acquisition of S'well; our ability to achieve projected synergies with respect to the S'well business; our expectations regarding the future level of demand for our products; our ability to execute on the goals and strategies set forth in our five-year plan; 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®, La Cafetière®, MasterClass®, Misto®, Swing-A-Way®, Taylor® Kitchen, and Rabbit®; respected tableware and giftware brands, including Mikasa®, Pfaltzgraff®, Fitz and Floyd®, Empire Silver™, Gorham®, International® Silver, Towle® Silversmiths, Wallace®, Wilton Armetale®, V&A®, Royal Botanic Gardens Kew® and Year & Day®; and valued home solutions brands, including BUILT NY®, S’well®, Taylor® Bath, Taylor® Kitchen, 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 / Rose Temple
212-355-4449

LIFETIME BRANDS, INC.
Historical Financial Data
(in thousands)
(unaudited)

 Three Months Ended June 30,
  2022   2021   2020   2019 
Net Sales $151,314  $186,636  $150,140  $142,536 
(Loss) income from operations $(464) $11,001  $4,296  $(12,545)
Acquisition related expenses 75   72   55    
Restructuring expenses       253   173 
Integration costs 864         695 
Warehouse relocation and redesign expenses 73      303    
SKU Rationalization          8,500 
Adjusted income (loss) from operations (1)$548  $11,073  $4,907  $(3,177)
Net (loss) income $(3,460) $5,789  $(3,977) $(11,513)

(1) Adjusted income (loss) from operations represents a non-GAAP financial measure. This non-GAAP financial measure is provided because the Company uses it in evaluating its financial results and trends and as an indicator of business performance.

 Six Months Ended June 30,
  2022   2021   2020   2019 
Net Sales $334,031  $382,289  $295,210  $292,462 
Income (loss) from operations $3,891  $20,247  $(20,949) $(14,832)
Goodwill and intangible asset impairments       20,100    
Acquisition related expenses 1,194   254   102   151 
Restructuring expenses       253   781 
Integration costs 1,645         869 
Warehouse relocation and redesign expenses 570      1,093   215 
Bad debt reserve related to COVID-19 pandemic(1)       2,844    
SKU Rationalization          8,500 
Adjusted income (loss) from operations (2)$7,300  $20,501  $3,443  $(4,316)
Net (loss) income $(3,080) $8,856  $(32,141) $(16,380)

(1) Bad debt reserve recorded in the six months ended 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

(2) Adjusted income (loss) from operations represents a non-GAAP financial measure. This non-GAAP financial measure is provided because the Company uses it in evaluating its financial results and trends and as an indicator of business performance.

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

 Three Months Ended
June 30,
 Six Months Ended
June 30,
  2022   2021   2022   2021 
Net sales$151,314  $186,636  $334,031  $382,289 
Cost of sales 96,147   120,475   215,796   250,128 
Gross margin 55,167   66,161   118,235   132,161 
Distribution expenses 17,373   18,931   36,598   37,577 
Selling, general and administrative expenses 38,258   36,229   77,746   74,337 
(Loss) income from operations (464)  11,001   3,891   20,247 
Interest expense (3,732)  (3,819)  (7,499)  (7,833)
Mark to market gain on interest rate derivatives 304   46   1,353   544 
(Loss) income before income taxes and equity in earnings (3,892)  7,228   (2,255)  12,958 
Income tax benefit (provision) 98   (1,832)  (1,575)  (4,248)
Equity in earnings, net of taxes 334   393   750   146 
NET (LOSS) INCOME$(3,460) $5,789  $(3,080) $8,856 
BASIC (LOSS) INCOME PER COMMON SHARE$(0.16) $0.27  $(0.14) $0.42 
DILUTED (LOSS) INCOME PER COMMON SHARE$(0.16) $0.26  $(0.14) $0.40 

LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands—except share data)

 June 30,
2022
 December 31,
2021
 (unaudited)  
ASSETS   
CURRENT ASSETS   
Cash and cash equivalents$7,197  $27,982 
Accounts receivable, less allowances of $13,876 at June 30, 2022 and $16,544 at December 31, 2021 106,164   175,076 
Inventory 295,139   270,516 
Prepaid expenses and other current assets 14,934   11,499 
Income taxes receivable 3,729    
TOTAL CURRENT ASSETS 427,163   485,073 
PROPERTY AND EQUIPMENT, net 18,740   20,748 
OPERATING LEASE RIGHT-OF-USE ASSETS 81,100   86,487 
INVESTMENTS 22,098   22,295 
INTANGIBLE ASSETS, net 221,306   212,678 
OTHER ASSETS 2,281   1,793 
TOTAL ASSETS$772,688  $829,074 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
CURRENT LIABILITIES   
Current maturity of term loan$4,581  $5,771 
Current maturity of revolving credit facility 20,347    
Short-term loan 30    
Accounts payable 61,848   82,573 
Accrued expenses 79,514   112,741 
Income taxes payable    604 
Current portion of operating lease liabilities 13,874   12,612 
TOTAL CURRENT LIABILITIES 180,194   214,301 
OTHER LONG-TERM LIABILITIES 11,633   12,116 
INCOME TAXES PAYABLE, LONG-TERM 1,472   1,472 
OPERATING LEASE LIABILITIES 83,401   90,824 
DEFERRED INCOME TAXES 13,056   12,842 
TERM LOAN 237,564   241,873 
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 June 30, 2022 and December 31, 2021; shares issued and outstanding: 22,058,883 at June 30, 2022 and 22,018,016 at December 31, 2021 221   220 
Paid-in capital 273,279   271,556 
Retained earnings 8,224   17,419 
Accumulated other comprehensive loss (36,356)  (33,549)
TOTAL STOCKHOLDERS’ EQUITY 245,368   255,646 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$772,688  $829,074 

LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

 Six Months Ended
June 30,
  2022   2021 
OPERATING ACTIVITIES   
Net (loss) income$(3,080) $8,856 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:   
Depreciation and amortization 9,937   11,723 
Amortization of financing costs 843   876 
Mark to market (gain) on interest rate derivatives (1,353)  (544)
Non-cash lease expense (690)  (768)
Recovery for doubtful accounts (258)  (146)
Stock compensation expense 2,539   2,772 
Undistributed (earnings) from equity investment, net of taxes (750)  (146)
Changes in operating assets and liabilities (excluding the effects of business acquisitions)   
Accounts receivable 69,500   49,943 
Inventory (25,325)  (14,305)
Prepaid expenses, other current assets and other assets (816)  2,931 
Accounts payable, accrued expenses and other liabilities (55,117)  (12,516)
Income taxes receivable (3,729)  (1,750)
Income taxes payable (558)  (4,795)
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (8,857)  42,131 
INVESTING ACTIVITIES   
Purchases of property and equipment (1,479)  (2,497)
Acquisitions (17,956)  (178)
NET CASH USED IN INVESTING ACTIVITIES (19,435)  (2,675)
FINANCING ACTIVITIES   
Proceeds from revolving credit facility 157,751   10,845 
Repayments of revolving credit facility (136,970)  (38,131)
Repayments of term loan (6,216)  (10,478)
Proceeds from short-term loan 30   31 
Repayments of short-term loan    (31)
Payments for finance lease obligations (17)  (43)
Payments of tax withholding for stock based compensation (938)  (3,185)
Proceeds from the exercise of stock options 233   735 
Payments for stock repurchase (4,199)   
Cash dividends paid (1,929)  (1,957)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 7,745   (42,214)
Effect of foreign exchange on cash (238)  140 
DECREASE IN CASH AND CASH EQUIVALENTS (20,785)  (2,618)
Cash and cash equivalents at beginning of period 27,982   35,963 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$7,197  $33,345 

LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)

Reconciliation of GAAP to Non-GAAP Operating Results

Adjusted EBITDA for the twelve months ended June 30, 2022:

 Quarter Ended Twelve Months
Ended June
30, 2022


 September 30, 2021 December 31,
2021
 March 31,
2022
 June 30,
2022
 
 (in thousands)
Net income (loss) as reported$12,571  $(626) $380  $(3,460) $8,865 
Undistributed equity (earnings), net (195)  (466)  (416)  (334)  (1,411)
Income tax provision (benefit) 5,589   6,704   1,673   (98)  13,868 
Interest expense 3,835   3,856   3,767   3,732   15,190 
Mark to market (gain) on interest rate derivatives (120)  (398)  (1,049)  (304)  (1,871)
Depreciation and amortization 5,837   4,960   4,899   5,038   20,734 
Intangible asset impairments    14,760         14,760 
Stock compensation expense 1,201   1,244   1,174   1,365   4,984 
Acquisition related expenses 41   378   1,119   75   1,613 
Warehouse relocation and redesign expenses(1)    450   497   73   1,020 
S'well integration costs(2)       781   864   1,645 
Wallace facility remedial design expense 500            500 
Adjusted EBITDA(3)$29,259  $30,862  $12,825  $6,951  $79,897 
Pro forma historical S'well and projected synergies adjustment(4)         3,500 
Pro forma Adjusted EBITDA(3)$29,259  $30,862  $12,825  $6,951  $83,397 

(1) For the twelve months ended June 30, 2022, the warehouse relocation and redesign expenses included $0.5 million of expenses related to the International segment and $0.5 million of expenses related to the U.S. segment. For the three months ended June 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the U.S. segment.

(2) For the three months ended June 30, 2022, S'well integration costs included $0.2 million of expenses related to inventory step up adjustment in connection with S'well acquisition.

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

(4) Pro forma historical S'well and projected synergies adjustment represents a permitted adjustment to the Company’s adjusted EBITDA for the acquisition of S'well on March 2, 2022 pursuant to the Company’s Debt Agreements. Pro forma projected synergies represents the amount of projected cost savings, operating expense reductions and cost saving synergies projected by the Company as a result of actions taken through June 30, 2022 or expected to be taken as of June 30, 2022, net of the benefits realized during the twelve months ended June 30, 2022.

LIFETIME BRANDS, INC.
Supplemental Information
(in thousands—except per share data)

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

Adjusted net (loss) income and adjusted diluted (loss) income per common share (in thousands -except per share data):

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Net (loss) income as reported$(3,460) $5,789  $(3,080) $8,856 
Adjustments:       
Acquisition related expenses 75   72   1,194   254 
S'well integration costs 864      1,645    
Warehouse relocation and redesign expenses(1) 73      570    
Mark to market (gain) on interest rate derivatives (304)  (46)  (1,353)  (544)
Foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss    2,042      2,042 
Gain on change in ownership in equity method investment    (1,732)     (1,732)
Income tax effect on adjustments (177)  (6)  (490)  73 
Adjusted net (loss) income(2)$(2,929) $6,119  $(1,514) $8,949 
Adjusted diluted (loss) income per common share(3)$(0.14) $0.28  $(0.07) $0.41 

(1) For the three months ended June 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the U.S. segment. For the six months ended June 30, 2022, warehouse relocation and redesign expenses included $0.4 million of expenses related to the International segment and $0.2 million of expenses related to the U.S. segment.

(2) Adjusted net loss and adjusted diluted loss per common share in the three and six months ended June 30, 2022 excludes acquisition related expenses, S'well integration costs, warehouse relocation and redesign expenses and mark to market (gain) on interest rate derivatives. 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 and six months ended June 30, 2021 excludes acquisition related expenses and mark to market (gain) on interest rate derivatives, foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss and the gain on change in ownership in equity method investment. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.

(3)Adjusted diluted (loss) income per common share is calculated based on diluted weighted-average shares outstanding of 21,531 and 21,965 for the three month period ended June 30, 2022 and 2021, respectively. Adjusted diluted (loss) income per common share is calculated based on diluted weighted-average shares outstanding of 21,642 and 21,903 for the six month period ended June 30, 2022 and 2021, respectively. The diluted weighted-average shares outstanding for the three and six month ended June 30, 2022 do not include the effect of dilutive securities. The diluted weighted-average shares outstanding for the three and six month ended June 30, 2021 include the effect of dilutive securities of 643 and 664, respectively.

Adjusted income from operations (in thousands):     
 Three Months Ended June 30,  Six Months Ended June 30,
  2022   2021   2022   2021 
(Loss) income from operations$(464) $11,001  $3,891  $20,247 
Adjustments:        
Acquisition related expenses 75   72   1,194   254 
S'well integration costs 864      1,645    
Warehouse relocation and redesign expenses(1) 73      570    
Total adjustments 1,012   72   3,409   254 
Adjusted income from operations(2)$548  $11,073  $7,300  $20,501 

(1) For the three months ended June 30, 2022, warehouse relocation and redesign expenses included $0.1 million of expenses related to the U.S. segment. For the six months ended June 30, 2022, warehouse relocation and redesign expenses included $0.4 million of expenses related to the International segment and $0.2 million of expenses related to the U.S. segment.

(2)Adjusted income from operations for the three and six months ended June 30, 2022 and June 30, 2021, excludes acquisition related expenses, integration costs and warehouse relocation and redesign expenses.

LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)

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

Constant Currency:

 As Reported
Three Months Ended
June 30,
 Constant Currency (1)
Three Months Ended
June 30,
   Year-Over-Year
Increase (Decrease)
Net sales 2022  2021 Increase
(Decrease)
  2022  2021 Increase
(Decrease)
 Currency
Impact
 Excluding
Currency
 Including
Currency
 Currency
Impact
U.S.$137,191 $166,583 $(29,392) $137,191 $166,574 $(29,383) $9 (17.6)% (17.6)% 0.0%
International 14,123  20,053  (5,930)  14,123  18,317  (4,194)  1,736 (22.9)% (29.6)% (6.7)%
Total net sales$151,314 $186,636 $(35,322) $151,314 $184,891 $(33,577) $1,745 (18.2)% (18.9)% (0.7)%


                    
 As Reported Six Months Ended
June 30,
 Constant Currency (1)
Six Months Ended June 30,
   Year-Over-Year Increase (Decrease)
Net sales 2022  2021 Increase
(Decrease)
  2022  2021 Increase (Decrease) Currency Impact Excluding
Currency
 Including
Currency
 Currency
Impact
U.S.$303,409 $342,764 $(39,355) $303,409 $342,755 $(39,346) $9 (11.5)% (11.5)% 0.0%
International 30,622  39,525  (8,903)  30,622  37,610  (6,988)  1,915 (18.6)% (22.5)% (3.9)%
Total net sales$334,031 $382,289 $(48,258) $334,031 $380,365 $(46,334) $1,924 (12.2)% (12.6)% (0.4)%

(1) “Constant Currency” is determined by applying the 2022 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.

LIFETIME BRANDS, INC.
Supplemental Information

Reconciliation of GAAP to Non-GAAP Guidance

Adjusted EBITDA guidance for the full fiscal year ending December 31, 2022 (in millions):

Net income guidance$20 to $24
Undistributed equity earnings(1)
Income tax expense8 to 10
Interest expense(1)16
Depreciation and amortization20
Stock compensation expense5
Acquisition related expenses1.2
Restructuring, warehouse relocation and redesign expenses2
S'well integration costs1.8
Adjusted EBITDA guidance$73 to $79

(1) Includes estimate for interest expense and mark to market (gain) on interest rate derivatives.

Adjusted net income and adjusted diluted income per common share guidance for the full fiscal year ending December 31, 2022 (in millions - except per share data):
Net income guidance$20 to $24
Acquisition related expenses1.2
Restructuring, warehouse relocation and redesign expenses2
S'well integration costs1.8
Mark to market (gain) on interest rate derivatives(2)
Income tax effect on adjustment(1)
Adjusted net income guidance$22 to $26
Adjusted diluted income per share guidance$1.00 to $1.19


Adjusted income from operations guidance for the full fiscal year ending December 31, 2022 (in millions):
Income from operations guidance$44 to $50
Acquisition related expenses1.2
Restructuring, warehouse relocation and redesign expenses2
S'well integration costs1.8
Adjusted income from operations$49 to $55

LIFETIME BRANDS, INC.
Supplemental Information
(in thousands)

Reconciliation of GAAP to Non-GAAP Operating Results

Adjusted EBITDA for the year ended December 31, 2021, 2020 and 2019:

 Three Months Ended Year Ended
March 31,
2021
 June 30,
2021
 September 30, 2021 December 31, 2021 December 31,
2021
    (in thousands)    
Net income (loss) income as reported$3,067  $5,789  $12,571  $(626) $20,801 
Undistributed equity losses (earnings), net 247   (393)  (195)  (466)  (807)
Income tax provision 2,416   1,832   5,589   6,704   16,541 
Interest expense 4,014   3,819   3,835   3,856   15,524 
Depreciation and amortization 5,958   5,765   5,837   4,960   22,520 
Mark to market gain on interest rate derivatives (498)  (46)  (120)  (398)  (1,062)
Intangible asset impairments          14,760   14,760 
Stock compensation expense 1,444   1,328   1,201   1,244   5,217 
Acquisition related expenses 182   72   41   378   673 
Warehouse relocation expenses (1)          450   450 
Wallace facility remedial design expense       500      500 
Adjusted EBITDA (2)$16,830  $18,166  $29,259  $30,862  $95,117 

(1) Warehouse relocation expenses included $0.1 million of expenses related to the International segment and $0.3 million of expenses related to the U.S. segment.

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

 Three Months Ended Year 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)
Undistributed equity (earnings) losses, net (339)  848   (147)  (1,620)  (1,258)
Income tax (benefit) provision (3,729)  3,031   3,711   6,853   9,866 
Interest expense 4,736   4,230   4,128   4,183   17,277 
Depreciation and amortization 6,234   6,061   6,090   6,279   24,664 
Mark to market loss (gain) on interest rate derivatives 2,251   164   (99)  (172)  2,144 
Goodwill and other intangible asset impairments 20,100            20,100 
Stock compensation expense 1,326   1,420   1,575   1,630   5,951 
Acquisition related expenses 47   55   57   126   285 
Restructuring expenses (benefit)    253      (42)  211 
Warehouse relocation expenses (1) 790   303         1,093 
Adjusted EBITDA(2)$3,252  $12,388  $29,228  $32,458  $77,326 

(1) Warehouse relocation expenses related to the International segment.

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

 Three Months Ended Year Ended
 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 December 31, 2019
     (in thousands)    
Net loss as reported$(4,867) $(11,513) $(13,519) $(14,516) $(44,415)
Undistributed equity losses (earnings), net 116   69   210   (738)  (343)
Income tax (benefit) provision (2,458)  (5,795)  15,066   (5,704)  1,109 
Interest expense 4,922   5,044   5,539   5,275   20,780 
Depreciation and amortization 6,359   6,290   6,122   6,344   25,115 
Mark to market loss (gain) on interest rate derivatives    (350)  (367)  315   (402)
Impairment of goodwill       9,748   33,242   42,990 
Stock compensation expense 907   1,193   1,505   1,436   5,041 
SKU Rationalization(1)    8,500         8,500 
Acquisition and divestment related expenses 151         55   206 
Restructuring expenses(1) 608   173   338   316   1,435 
Integration charges(1) 174   695   235   159   1,263 
Warehouse relocation expenses(1) 215      881   1,689   2,785 
Adjusted EBITDA, before limitation$6,127  $4,306  $25,758  $27,873  $64,064 
Permitted non-recurring charge limitation(1)        $(8,929)
Adjusted EBITDA(2)        $55,135 

(1) Permitted non-recurring charges include restructuring expenses, integration charges, warehouse relocation costs, and SKU Rationalization. These are permitted exclusions from the Company’s adjusted EBITDA, subject to limitations, pursuant to the Company’s Debt Agreements.

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

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):

 Year Ended December 31,
  2021 
Net income as reported$20,801 
Adjustments: 
Acquisition related expenses 673 
Warehouse relocation expenses(1) 450 
Mark to market (gain) on interest rate derivatives (1,062)
Intangible asset impairments 14,760 
Foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss 3,404 
Gain on change in ownership in equity method investment (2,703)
Wallace facility remedial design expense 500 
Income tax effect on adjustments (28)
Adjusted net income(2)$36,795 
Adjusted diluted income per share(2)(3)$1.67 

(1) For the year ended December 31, 2021, warehouse relocation expenses included $0.1 million of expenses related to the International segment and $0.3 million of expenses related to the U.S. segment.

(2) Adjusted net income and adjusted diluted income per common share in the year ended December 31, 2021 excludes acquisition related expenses, warehouse relocation expenses, mark to market (gain) on interest rate derivatives, intangible asset impairments, foreign currency translation loss reclassified from Accumulated Other Comprehensive Loss, gain on change in ownership in equity method investment and Wallace facility remedial design expense. The income tax effect on adjustments reflects the statutory tax rates applied on the adjustments.

(3) Adjusted diluted income per common share is calculated based on diluted weighted-average shares outstanding of 22,037 for the year ended December 31, 2021. The diluted weighted-average shares outstanding for the year ended December 31, 2021 include the effect of dilutive securities of 640 shares.

Adjusted income from operations (in thousands):

 Year Ended December 31,
  2021 
 (in thousands)
Income from operations$50,842 
Adjustments: 
Intangible asset impairments 14,760 
Acquisition related expenses 673 
Warehouse relocation expenses (1) 450 
Total adjustments 15,883 
Adjusted income from operations (2)$66,725 

(1) Warehouse relocation expenses included $0.1 million of expenses related to the International segment and $0.3 million of expenses related to the U.S. segment.

(2) Adjusted income from operations for the year ended December 31, 2021, excludes intangible asset impairments, acquisition related expenses and warehouse relocation expenses.