LCUT - Earnings call transcript Q2 2019

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Operator

Good morning, ladies and gentlemen, and welcome to Lifetime Brands' Second Quarter 2019 Earnings Conference Call. At this time, I would like to inform all participants that their lines will be in a listen-only model. After the speaker’s remarks there will be a question-and-answer period. [Operator Instructions]

I would now like to introduce your host for today's conference, Andrew Squire. Mr. begin. may you Squire

Andrew Squire

Larry morning, Quarter thank us XXXX Rob Officer; management Good Officer. Lifetime today for Brands' are and Executive Chief Second Earnings Kay, Chief everyone, you. Financial you and joining from Winoker, Thank Call. With

established I'd the intended safe forward-looking our company, contain to remind that and of to the relate the to by these Before remarks call, you liability morning are this qualify we for harbor like begin performance Securities and influence Private today's future are statements statements Securities may statements are Act. are that the not such Exchange the the with others in and Litigation Any factors contained Commission. Reform guarantees highlighted filings in press and of our performance release could our that future results

turn introduction, call Please I'd Rob Kay. to ahead that to like go over Rob. the With

Rob Kay

Andrew. us morning XXXX results. joining Thanks second today to thank for quarter and Lifetime Brands' financial Good you discuss

continued performance priorities company rates we track returns. quarter our that increased to the achieve initiatives. remains long-term fell growth higher for company I repositioning pleased and expectations, strategic its QX This of to in although am on our of on focus growth And short

quarter have we of successfully market that launched several have headwinds successfully continue while in that in the a benefit share, and negative second we majority to reorganization had in have activities Looking XXXX. QX market and at results. executed our our these Notwithstanding, we we lines from factors business gained faced geopolitical impact the the on initiatives

comprehensive sales bakeware, lines new commercial launch lines. and of launch we our quarter effort tabletop into solution and initiatives and food kitchen include product the international launched a the that home the cutlery second the our the sector, of service across tools of The offering in several introduction

food half will and not expected international year. are the of and provide service the second initiatives positive help contribute other meaningfully results XXXX in this to initiatives results, the momentum to While

new results improved margins quarter, our will in as the the during profits and show half XXXX quarters efforts to over several continues business U.K. enhance U.K. past begin meaningfully reorganization our of the a our beyond. of to and Further single-location occupied operation result contribute we to second which and

significant a progress as strategic products and and approach We realignment going SKU also rationalization our we on portfolio more made categories forward. take to

cycles, As quarter, in we brick-and-mortar industry discussed retail. last structural retail e-commerce to driven changes down temporary continues face and by the both

tariff an softness as Our the results continued shipments for Europe impact temporary the latter as Brexit which continental has of and had markets including markets. the well were quarter in end and from for the by impacted uncertainty, conditions U.K. both geopolitical our on ongoing impact

remaining to With of recently fluid administration's not manufactured all that this additional tariffs, are regard XX% intention an goods to tariff the as on enact China evidenced to in being currently announced tariffed. be environment continues by

discretionary sale spending As Lifetime in cost reducing has mitigate and tariff include to in achieving pursuing These our activity to goods, previously announced actively reducing the products of of strategies environment administrative costs costs customers. of chain, place monitors tariffs. impact changing to and of supply our and increases reductions such cost the the price and intended

tariff these we saw tariffs the effect. benefits what is the to This program a financial lag from pattern into there mitigating immediate similar realizing While implementation upon went a the is impact financial is from when in last actions.

see margins we impact mitigating continue negative will on realized. until to are temporary fully result some our a actions As our

tariffs a as marginal result We prices have reduced also shipments reduction in of demand. higher have some as experienced

we implemented do large expectations. anticipate and the achieving end increased do has the of date we consistent anticipate on fully lag the magnitude Due to tariffs has to To announced not the of revenues until this -- significant been of strategies XXXX. implementing and experience recently we China, mitigation our not discussed continue the and all not with fully

in meaningful strategic transition like flow product important create driven we business also will company-wide and improved in two category steps contribute generation to more time. performance of portfolio address to model. near-term took over quarter the realign the These a part to and to enhanced efficiency actions and I'd as cash the our

We First, across to significant decision a product made completion the deemphasize do eliminate most product offerings to of of we the have that decision of legacy not or investments provide following the the our of company. returns categories in made rationalization, SKU number lines discontinue our business. adequate for the

non-recurring, products accounting our and essentially on to balance $X.X of values incurring up free down result decision, we're non-cash As million more the charge stranded assets write sheet. of this cash monetizing a these a of by

monetizing us we'll will the business growth categories the long-term. able areas short-term, reinvest in our assets in greater in will position for By of drive be to on the focus these that and profitability that product

the certain in million as monetize our accelerating term. investing and to in review, non-core toward rationalization additional capital, expected intend that $XX $XX between non-core portfolio are Second, and to assets the deleveraging million of SKU which redeploy we identified part will we divestiture near generate growth. and in Together, have our company

In supply will of returns remaining investments centers related reducing chain. other distribution addition, our expenses we to assets our these efficiencies and actions our drive improve and increased from expect by the

our hard will of take half into portfolio We look at second continue move we the into as a and XXXX to XXXX.

European we with from our operations. performance we year-over-year to and $XXX,XXX strong to adjusted earnings delivered in operations, in momentum now Turning QX solid continue of growth see

funded which Brands We've expect to globally. Lifetime revamping Additionally, have sales position significant our XXXX in international to we begun the and we seeing in to efforts capture necessary sales investments in benefits QX, the made opportunities of to roll out already strategy our start XXXX. have and International consists business

quarter. uncertainty and are in revenues consumer portfolio planned ongoing that Brexit. export meet Revenues EU and the receive expectations shipments UK from UK the the were decreased. reluctant To by not end, spending impacted for did change our regarding a customers to has

we improve realize as benefits margin to operations the to the Brands as in have of described. contribution Europe restructuring previously from begun those Nevertheless, Lifetime continues

our have in despite results and our tariffs of beyond, expected confidence strategy we uncertainty and As deliver the continuation beyond, continue XXXX to we in ahead and ability in Brexit look term. the QX to to strong near and

we was mix focus by to included saw improvement of UK-based Europe. as the add in reorganization the and non-productive we has from The business on realignment consumer driven offerings Europe reorganization product and portfolio our we products value Lifetime low-margin shift Brands the This brands retailer. where can and away

quarter and we occupied the fully it England, will headquarters Birmingham anticipate in in we Further, operational be new our QX. European in

for on benefits anticipated squarely with remain track and the Our original reorganized is running operations the consistent planned estimates. region

to we two eight operation allows all in units considerably into and one separate a the us offers service business advantage. one standalone to invoice and As reminder, combine be will levels more scale operation receive efficient allowing warehouses customers single The Birmingham products from order and from and best-in-class one single competitive business shipway. for

of the In addition, investments in the business consolidation offset we've will help our made. UK units

FX While of to expect headwinds in and the related continue a UK, Brexit we Europe, and result surrounding the particularly uncertainty challenges. in as

profitability with on plan, and turnaround the We remains efforts will enhanced our reorganization are in which cash result our results flow. and of pleased

XXXX, made decision profitable quarter on growth results call, Moving which restructure in led first this we channel. our to to and as strong e-commerce, our has the in I quarter activities the e-commerce mentioned to of fourth

increased XX%. the pleased Day on our we year compared spice category quarter, revenues; as which bakeware, second Prime were the rack, increased XX%; Kitchenware, with XX% Amazon's During robust yielded increased performance increased and with product Farberware sales Day, which such which which XXX%; company's Prime cutlery, which prior in

proud channel. important with Lifetime now E-commerce confident and executing growth XX% We area for nearly that pure Brands, its as e-commerce we represent nearly are transformation an for remain e-commerce year-to-date XX% of strategy revenues total the operations play in potential represents growing we to XXXX. continue this compared revenues

in food May, we dinnerware, excited a Brands' the accessories. service by the In expansion Similarly, our that drinkware Mikasa umbrella under industry. standalone flatware, table covers Hospitality, and Lifetime commercial serving recent launched unit we are

with starting later warehouses starting than QX, to selling in into We these are no to bring fiscal expect and our products XXXX. shipments begin

line and where in While growth leader. we from recognizing not this in categories this already attractive anticipate Lifetime a Brands global is industry and opportunity the expanded is near-term a do an product revenue business logical

position to continue to growing this steps will We our space strengthen in going take forward.

XXXX, We in continue in to preparation, launches tabletop, for barware, most have home and additional our notably product positive expectations food solutions.

We market product QX provide will begin in and categories. across these our products we shipping of to many share them expect gains meaningful

$XX in as $XXX $X.XX EPS between of adjusted million, EBITDA for to XXXX, and more million. we outlook million and net achieve Turning $XX provided in our between press consolidated diluted between adjusted expect $XXX detail to and release, and million $X.XX, sales our

timing China which the previous with guidance announced EBITDA While of downward of impact a this view XXXX business are consistent Brexit. and created the our for European of level implemented and revenues represents tariffs our related on to we on revising the uncertainty reflects

a adjusted to midpoint and represents revenues. growth of revenue XXXX guidance revision still of pro compared compared X% the X.X% While approximately EBITDA forma growth XXXX of our downward to

to model strategic us taken and the to we generation, raising action Brands to XXXX in equity, we is a have in transition profitability, strategic investment second committed focused we that remain priorities sales the to As half its these takes quarter Lifetime brand increasing opportunities. implement on driving of approach capture to category. product more and optimizing our to position continuing position competitive and executing market and our this

the half and meaningful drive about profitability shareholders. with for for improved that Looking and the second we're continue early our strong of confidence will look excited to our expectations. on ahead, our path year bookings value We're creation the prospects line in performance and

over go it to the over financial turn now I'll Larry results. to

Larry Winoker

Rob. Thanks,

of to million, for of a $X.XX charge compared second million, impact per as or loss loss As million loss of of SKU to the $X.XX net net $X.X or non-recurring loss the the per non-cash this XXXX $X.X $XX.X quarter we of morning, the XXXX. in first share the related quarter loss including of rationalization share the reported was

XXXX million loss quarter per in in XXXX. measure net diluted morning's an table results per was reconciles for $X.XX as or is of share million, release. compared $X.X this which $X.XX quarter $X.X share this Adjusted A for or loss included non-GAAP to adjusted net the

non-cash operations million. including $X.X from was non-recurring charge the Loss

non-GAAP measure After $XX.X effects SKU the of million With XXXX the for Adjusted to that our that quarter limitations debt through to certain results is and ended $XX.X adjustments defined EBITDA, in our and million. committed XX, was before period million as a XX-month the last a in release loss reconciled year compared June was trailing GAAP for XXXX. $X.X rationalization giving the agreement.

million sales $XXX.X the and sales realized reflected continue This be lesser and $XXX.X includes continue from last in declines decreased strong in million, to decline to segment in million. X.X% $X.X the million. savings actual hydration decrease to The XXXX $XXX.X quarter to for XXXX unrealized projected was results. degree they unrealized savings decrease note $X.X tableware in our in not a versus Kitchenware. of or Net programs This Of projected operating U.S. low-margin XXXX was million partially growth The year. as products. was offset by certain repeating

XXXX the fluctuations impact products the of This decline sales International from private-label In sales. a segment independent down export in million $XX.X national and or basis. were tableware year $XXX,XXX dollars, lower-margin reflecting $XX.X in constant foreign a last increase de-emphasis was exchange U.K. accounts of planned to higher due customers, on e-commerce increased reported were includes versus U.S. while sales X.X%. sales million which and

XX.X% XXXX improvement XXXX point one-time XX the been connection with the in that SKU inventory is attributable XXXX $X.X This reported XX% as the step-up Gross rationalization. rationalization quarter however we XX.X% quarter. margin was the the Filament low XX.X% XX.X% year. tableware SKU related The XX.X% to gross primarily in million would segment XX.X% margin XXXX. a excluding margin excluding The quarter, it compares last was absence excluding for have the in acquisition. the to in to for in the This charge U.S. programs XXXX charge quarter, the was XXXX versus the – of basis had

XXXX the our to de-emphasis due in in period. label was XX.X% products compared primarily the to sales lower was XX.X% This tableware and increase margin low margin quarter, gross International, For XXXX allowances. private of planned

quarter last of XX.X% XXXX Distribution compares sales, $XX.X sales the expenses million or of or of million to XX.X% year. $XX.X in

shipment a were goods due XX.X% distribution volume, expenses relocation segment, was expense shipped lower our percentage on tax higher and trade U.S. as customers. estate warehouses respectively. from – of increase charge one-time excluding XX.X% real This primarily sales and the an in to increase freight higher prepaid to expense For

were warehouses a as percentage segment, our in XX% from expense shipped For of distribution the sales both International U.K. periods.

last million In Looking the at in the sales quarter, versus period. $XX.X administrative SG&A million expense acquisition. reflective XXXX were improvement period $XX.X This XXXX the as in versus of $XX Filament to the for is expenses the $XX.X And the and expenses synergies U.S. of million realized XX% XXXX a the improved percentage, year. segment, sales. from versus XX.X% were selling, general of they quarter million in the

million the as reorganization with to to XXXX includes SG&A million plan duplicate new from expenses for million The lease period $X expenses. in in part U.K. gain International $X we lease in new company headquarters commenced period. that XXXX of warehousing for a connection XXXX, its European of In XXXX, incur contracts. was the mark-to-market had currency and foreign compared the $X.X $XXX,XXX

in $X.X XXXX Excluding SG&A last these non-recurring items, million were $X.X year. versus million International expenses

million offset both $X of lower fees. $X.X expense million XXXX the professional however, $XXX,XXX. periods, in periods, higher interest Interest gain were rate an swap approximately acquisition corporate Unallocated by related both period reflects in expenses aftermarket employee was expenses

both local of compared tax is of XX.X% forecasted lower XXXX in the quarters In and XXXX as from year. in period well XXXX the last as versus to year rate as the to and rate actually of XXXX varies expenses at due year. last statutory rate XXXX The income significant impact non-deductible is Effective primarily tax in The XX.X% impact state the to expenses. forecast federal effective income XX%, time same benefit. due was full non-deductible tax

of will believe availability part $XX to leverage minimal revolving million, XXXX credit cash which the debt debt our of ago a which at our was Also, our financial was liquidity $XX flow amortization. for year And June that liquidity loan a be free comprised our represents of $XXX was negative facility by foreseeable decline also adequate supplemented $XXX net worthwhile the portfolio of and and from cash is realignment. note XX, covenants and X.X in no under million our ratio had future that million. June period, benefit We times. is date maintenance on the from the at anticipated term million required It hand

adjusted half mid-range of the have financial that outlook a in XX% on the last than The approximately period will generated XX% on outlook will the the year. pro of the As also release year. year, EBITDA that updated of generated second same The our which is consistent be provided basis a second the in generated our we mid-range for pro XX% reflects lower in the of of year, the outlook the forma approximately full the sales half of reflects be we year. forma which last in is basis with

prepared comments. for open our concludes Operator, This lines please questions. the

Operator

Frank And your Thank question Camma you. is Instructions] of from [Operator first Sidoti.

Frank Camma

Thanks Good guys. questions. the morning for taking

Rob Kay

Good morning Frank.

Larry Winoker

Frank. morning Good

Frank Camma

at the your your release on up. I guidance least to going side when just actually not is question want but first reading did -- you obviously, obvious meet The on me at sales was focused stay which is to expectations, I least on the

can you you're kind second confidence cutting in the half? of about how you achieve especially fact light talk for us of that get Can SKUs? So you'd there? to How that actually just you the bridge your

Rob Kay

Yeah.

reduction assets -- non-productive there really On non-productive that and SKUs the having rationalization is SKU it's we're eliminating. not our

though... our of it's we're overall that's therefore, I will money really by and not cash. that in stranded value there as assets explained and just to having revenues. is a impact sitting converting terms there taking big So And That creating

Frank Camma

Sorry.

there. Just to stop right you

you rid product you that of Or a do a like do a guess? product I then which it through do get discount? channel how -- that divert you you that assuming is how So it's product

Rob Kay

one to not So Frank. it's happen going in week

over X happen will month period. it month So to a X

So it'd channels. orderly be done through in basis alternative mostly

Frank Camma

That’s was getting that. I Okay. why

Okay.

Rob Kay

an the recognizing some we're while won't some will But there it just cash. this why which anticipate uptick of -- impact, was It to and in is for guidance. we have sales revenue margin converting

Frank Camma

I got now. that. sense That Okay, right. makes okay. All

a the share. comment market categories think on you've a talk staying you that for some Can -- that made just second. I about gained So where you

the about share? talk you you've the -- or market that can where you've taken the categories pruned So either categories

Rob Kay

and less it's So specific. really categories product

things and the lot been share. mentioned, half the you're the And So gaining bakeware of that in we've we've seasonality some of of in is that gaining obviously shipped barware, a kitchenware, second been our as business I aware.

we've that's So big in from share wins those had market for us. a areas and growth driving perspective

always from gaining A that SKU eliminated first in the of -- quarter share. in us, quarter the and like And second year. flows even for half second the The is of we the not we been we've while low the the -- very of rationalization. market the year quarter this months first lot was benefit categories a through on strong six it's

productive, that weren't offering but offering of for were for products period -- products some eliminated in in We the company's time. time of some period the

-- for sinkware, there have So bakeware, tabletop, instance kitchenware, growing was like would areas where barware. we're included

opportunity company to return plus. monetize create can to a transactional million portfolio off look basis that us was our the sheet identify strategic across So rather balance an at $XX an and the value additional presented by with we there -- and a and raising assets an opportunity on where to of portfolio from

Frank Camma

includes $XX clearly And include, that you assets of minority other the sort like include might said -- they already that also also but let does million like this you've hold? Okay. that it marked does me investments inventory you down

Rob Kay

Yes. does assets. include other include assets. So it It does other

Frank Camma

right. All Okay.

the it's allocation doing capital towards dividend – of sense So or you're you keep about Or thoughts a sense It's company of that. repurchasing even -- lot light it a what in of sounds staying very so debt have you to not does think your and/or reduce you're a encouraging on Do at the obviously, a I make into reduction and lot to But going that current of to invest for either shares -- or use use valuation? a perhaps dividend. to that second. that money? but direct I think like the does just big that's money, it dividend? wonder the not to the maybe make debt

Rob Kay

change no have to dividend. we the intention So

Frank Camma

Okay.

Rob Kay

this of use will be raise immediate debt. to the And capital repay incremental

Frank Camma

Debt.

e-commerce one all some platform, coming the issue Okay. the All Particularly retail partners? talk last right are you talk actually me are the big can trends just growing for them And you inventory of at is, of not actually some them but can your you at right. all at about, obviously about now back from a not. bricks-and-mortar, but still

So can you talk a general ago? say levels just versus about the year

Rob Kay

an the we've particularly this burden including us. working We've base larger their of with to ongoing to seen environment trend seen shift think I retail supply some of the in some a of players the of you that saw in that. doing look large lot at situation, lot a of lot particularly the We And more they're XXXX. retailers import… direct a if of in tariff capital

Frank Camma

Right.

Rob Kay

Private-label business.

if on not well And other in on XX% on XXXX. it's sheet. the some balance pressures XX% material So that related which paying they're maybe themselves. us nothing stuff the directly tariff retailers created additional anything us it's for everywhere But they're looking now all a including or to

Frank Camma

you. Okay. That’s helpful. Thank

Operator

you. Thank

Talanta. Justyn Your of next question is from Putnam

Rob Kay

Justyn. Hey

Justyn Putnam

Hey good of morning. questions. have couple I just a

of occurred quarter. looks like this Yes. mainly it fair that after is, the specifically geopolitical question was Is due the factors quarter that guidance the end to for your First the lowered year, XX%?

Rob Kay

No. fair. That's Yes.

Justyn Putnam

All right.

is, hear tariffs own maybe that? What share. recapture, to trying the to want your timing your the capture on is versus on trail market the that strategy on trying margin thoughts to from just I So follow-up the of between

Rob Kay

it It's also complicated and levels. upon depends

it at covers list look recently you X, is if which XX%, the everything. So, announced

the basically retail list one advantages of by putting environment the So is a tariffs in of for us everything tariffs. four sold is covered the kind for of

we're neither basis absorb the go field. kind going market XX% XX% So strategic is suggest. you to to not you completely a going playing of such those leveled And do can creates a at to on things If as tariff. XX%, a

again RMB. you it's is Now That's of to of cost can't will guys, go mitigate reductions China but low-hanging XX%. fruit you But try is us. lot terms little a can, different. trade you absorb sales devaluing war. business. that in of the And if out mitigate of a what they XX%

that business big Now, go Obviously of wouldn't remain consumer - conditions. and with it's not doing will try a rather will dollar one market but to we'd is through. absorb, the going we it wouldn't pass amount rise to to No that. the out react so because it’s the to What's retailers we market neutral. prices do happen is

Justyn Putnam

Okay.

in But this during position than average you you absorb to your say understand potentially market would it's gain complicated. that So a maybe are competitors share transition? more on and

Rob Kay

very people opportunity comparable And us. of on majority For be very -- of the frankly, large this service case. as a some us, the our competitors would is result the selling it's what in food of that opportunities vast products and a environment for our in impacted the created favorable for which a has

Justyn Putnam

Well, -- ask mentioned going I you're… is opportunity line was commercial what as in that of the it to right. about quantify the the magnitude All since road, you but down can that you

Rob Kay

food what's which So -- big a two player On you one look two And you already at service, separate. it service. are would be Justin. food into There's divide pieces if -- can we're house. the So been of in used the player in of called we've used almost front one's back what's of for house. house called the the What's a back the XX and years kitchen, front? in in

price point -- are stuff. products. we're main leader the We've about so at level. any dinnerware we're been So, house leader; of Flatware, we merger, at quality in we still did the we to a and all the products that understand market. make global Lifetime has the there. ability because We when the global the front We're the this any that do never talked a

this and year, opportunity of together so a into putting a spent all we it SKUs expertise the May natural of first had the So year, XXXX us launched now house. front we it's launched the in and for it

for good opportunity good billion a a of the service over in It's we're little a the that is food in a front the it's And market. bowls, products it’s opportunity. build America, very selling house North us. in slow So $X

can market we get that share decent think we of market. So,

Justyn Putnam

do What share? decent take you market

Rob Kay

You I X% talking of not X% anything along that. we haven't mean, or But can guess. disclosed we're here.

Justyn Putnam

Okay.

little business was at cash the about you've based question that other double it's prior initiative. the guidance know through And that top this my that flow your cash SKU looks Is on this bit a But is the year least question. I mentioned in as generating your the rationalization given. year. So of almost for potential you the you're the on opportunity rationalization? of like with that SKU accurate flow understanding

Robert Kay

One accurate cash That this will accurate. realization and XXXX XXXX. both piece -- is completely We piece is one of be the This is and isn't. flow incremental.

So, the orderly this the process to we that through to we're go stating. realize nine-month be expect process and numbers a

Justyn Putnam

Okay. quarters your cash flow next for big Well the two are anyway business. generating quarters the

Is So, over you expecting SKU rationalization, decrease debt that net -- be levels. by XXXX significant you expect of in see that to right? spring

Robert Kay

correction a we working of capital and just business. are mean peak in cash next in seasonal our and of with I terms basically cycle our correct quarter need slight is quarter this our seasonality basically

which the businesses as is Taylor line business combined other what we that quarter and in and is certain ship such We first quarter we and therefore collection fourth do first a have. of very selling And the big the quarter. retail have more the business businesses

you're pure and correction little you're as not saying directionally as couple but a of it's correct. -- there, So,

Justyn Putnam

Okay.

investing you've growth. use cash was that for other flow in free decided the So,

ballpark Just flow kind used how of is of be of or for it just investment cash going to percentage XX -- ballpark growth versus what? or much that half

Robert Kay

the we funded it about international us that already invest lot a talked that. initiatives mean I opportunity to of lot A growth. the gives service in So, food we've of

So more and at return. over looking be that date. just And to opportunities the above this would discussed appropriate we've it's

that delever. used -- disclosure majority At will public we to -- to of most if the originate full are And be we the and a is closings discuss basis. the additional the being this will point But used cash as discuss at for deleveraging. used be will shareholders on there this to point,

Larry Winoker

me terms we're an and said one of -- a has term in loan let what's excess cash timing. Justyn -- sure much the make I'm clarification is how -- flow But to an called just you're that haven't agreement we agreement familiar term with realize just sweep. excess going

will working capital reduce how to be reinvest down semi year much is So, much our because will generate that that versus cash pay debt. affect is had collected this we it we available we to how

Just keep in mind. that

Robert Kay

opportunities present And you that. always and But But always return the we show we could as I mean so intention generate -- delever. our it have we give option. is -- there's which appropriate it we'll

the being invest delever. amount significant point created to us just of give a assets with stranded is flexibility generated and But that providing in we've we'll and growth tax from time capital appropriate returns until that

Justyn Putnam

and generate the assets is think flows Okay. pay-down the you the exciting. pretty from that cash you opportunity and stranded that Well debt as that shareholders found opportunity I

appreciate So that.

Robert Kay

you. happy Thank We opportunity. No. very We enthusiasm. to were your identify share this

Justyn Putnam

questions. That's you. my all thank

Operator

of Patrick from Barwin is question Aegon. next Your

Patrick Barwin

companies of Could pricing. food but declines more? have you Yes, service aggressive your talked pressured it Some, thanks fairly guys. talk about the channel what Could you talk in you're terms very traffic being the other some maybe competitors, not necessarily seeing about a about just and channel? in bit

Robert Kay

Yes.

service would grown for consumer years hotel be the So faster a past market. core our catering has XX than right the the at restaurant food like and channel which pace

we the our we know in and cost channel We know well. the channel structure price have we points products. the the know and And

that there net. margin -- margin business margins in have and the gross -- net is healthy you So, gross in big difference

products, is will selling our we be is is margin requirements. these well which known margin The that within

What a disruption, us. issue particularly the of in food not particularly a is in and you're service So level players lot providing there North making that are an are and front need service, initiative, big for right? house that we're in of America the today not a seeing globally because you traditional some to

-- you want they tomorrow. food it it's need service, need your from distribution it, In it, you all

industry -- that -- mission-critical. reasons I to in we're not reasons are should And deliver. for that players say should I whether that in So there obviously financially them say, other or challenged whatever that is of space today are they're aware able certain

with Fortunately for in investment that coincides our tremendous us this space.

So opportunities need that. a sales Obviously, therefore, we've there result on execute of is legitimate this. to we as opportunities tremendous gotten and

Patrick Barwin

to SKU of labor. of Okay. going clearly and the And back cash side That's the point rationalization flow the then interest.

did year. free about guys last in cash $XX You million flow

we in I double half be of should So second should that expect this number? year? that the mean,

Rob Kay

Yes.

Justyn nine-month we're some with so said in we've cash company going in will will its flow generate a all the and period this generate is Putnam's will of As But to sheet. be the is off be question instrumental going some that be balance to money that XXXX. it's XXXX that

Patrick Barwin

guidance the then little And shifts a with language. bit Okay. the EBITDA

So your $XX apples-to-apples it basis, $XX quarter? million to guidance we million an right, is if now EBITDA compare to on first the

Rob Kay

is the $XX we -- to went we is And million last $XX million. So million. million $XX $XX over million, $XX to guidance from which a year, little did

from to place year. $XX guidance in million $XX million the $XX The -- where versus range equates the or midpoint that was level. as $XX explained to X% million in million that's growth it's And million quarter prior to is our down So the of $XX X%. first over I

Patrick Barwin

There there? Okay. Have reduced you for that else any going Or was had to have -- that? were or guys Amazon. on with and saw Amazon they And last view conversations you article selling out either week prices have about you cheaper. it's then vendors saying anywhere them week this an

Rob Kay

changes article. every week. Yes. Amazon saw that Look everything. other I Amazon does

particularly terms Now very Amazon. something smaller big harder They're it's on algorithmic-focused. MAP maintaining time is pricing got a that a -- effort which have in -- you some chewing of not companies

So lower price if they And And that is there a anyway in and they do they disruption search around. algorithms the online there -- if -- their is what immediately that find causes marketplace. lower.

wine significant So a infrastructure pricing, in the to place -- and because rabbit example liquor have throughout an stores of in give whole corkscrew to we those amount country. a sell you we independent just and protect MAP significant

Island little and marks marketplace. he's guy he totally the it, let's say say a just guy over buys and and if you corkscrew XP on rabbit at it extra up Long an reseller $X a Amazon wholesale, and X,XXX he's have So we'll puts buying in as it just wholesale a disrupts

like to pricing. So Never you like you that say and have that's one Or hey, sell choices. basically that example. that believe again. we'll to that And guy go sell off. maintaining need just MAP cut two and you It's

of So competitors Amazon lot with focused is size a our very our versus of Amazon. because

So of that on them. one active but been million topics, has there's an a not dialogue

Patrick Barwin

Okay. Thanks guys.

Operator

you. Thank

or closing questions back Kay further over this no any will have floor turn I the to remarks. additional We at Rob for time.

Rob Kay

next to again forward Lifetime you our on remain joining us continued discussing executing on results day. We quarter sustainable Thank support look growth you. half today. Brands the our strategic We of deliver and XXXX. your appreciate a Have Thank conference priorities second call. third of focused for in to good

Operator

you. conference Thank today's does This conclude call.

have You wonderful this time may day. disconnect your and at lines a

Lifetime Brands (LCUT) 9 Aug 192019 Q2 Earnings call transcript