LCUT - Earnings call transcript Q4 2023

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Operator

Good morning, ladies and gentlemen, and welcome to the Lifetime Brands Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions].

I would now like to introduce your host for today's conference, T.J. O'Sullivan. Mr. begin. may you O'Sullivan,

Unknown Executive

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

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

company and such future Such to does available statements the the the update any as change not for of based to company undertake hereof obligation upon are developments. by law, subject to as statements. date required Except information are

promulgated remarks the Commission. and in today's G. financial measures and press Securities Our within the this of Regulation also contain Exchange meaning release morning non-GAAP by

of Included accordance financial measures measures such with these calculated GAAP. is in a with release reconciliation in financial non-GAAP the comparable

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

Robert Kay

quarter revised had as a or quarter, full the income we Good and analyst meet joining adjusted operations sales, EBITDA fourth everyone, thank today. well T.J. last strong metrics morning, guidance from targets We estimates. you, results for us net provided Thank that you delivering year as exceed to helped from and us

coupled will in are categories, meaningful this the the our we translated e-commerce expect sales with growth business, across operating growth in XXXX. driving And continued continue to continues are pleased our strong gain on focus income efficiencies net share. that We driving across with channel, which outperformance especially we to

To and the you at through our the year in and million start, quarter million level. sales walk In quarter, period. million I'd in EBITDA fourth delivered sales fourth compared million results $XXX.X year in adjusted $XX.X $XX.X high in prior and EBITDA net adjusted full we like to $XXX to net a in

For we compared $XX.X in throughout $XX.X the in a adjusted million estimates the of full thanks million revenue incremental to to focus management year, expense our XXXX, generated EBITDA diligent ahead internal coming on in and year. opportunities

Of $X.X in onetime was note, notwithstanding of million charges XXXX. performance our

have we ocean activities ordering no in We fourth supply the disruptions potential challenges experienced normalized another of which quarter. times. some initial freights in now Sea, Further, the and and from costs impact issues ongoing with on the been recent environment encouraged by geopolitical us. shipping quarter quarters chain behind shipment Red in had and Though improving are have monitoring stemming

retailers We believe out coming pandemic that the oversupply the issues of experience dissipated. our have

this to with we XXXX, execution business. progress markets. and end listings. translating implemented the brand accounts, with Zealand, and In international we including made, the now the these in go-to-market Australia we in have we products and meaningful strategy year diligent additional remain Turning strategy, gains share earlier New turnaround international increased our liftings direct are to our market of pleased is Throughout

offering. driven new successful revenue lines KitchenAid product we out by Additionally, as roll highly drive our continue incremental our to we markets, into opportunities international

quarter, in factors, result fourth a of since turnaround revenues the the As we XXXX. in first international these year-over-year saw

meaningful will international in noncash a on expect turnaround inventory As quarter, part that impact impacted bottom of took plan, in bottom initiatives have the XXXX. we write-off our fourth which line we our our line performance. the channels international a But aforementioned

traction and the and as remain Food achieved XXXX in to gain significant growth we business, Hospitality in capitalize on to market XXXX. In on achieve Service track positioning continues our Macassa

While this placement Food can an its the is revenues as long-term view participant $XX are we grow that now business We America. foodservice Service that our in XXXX. we Lifetime across still million North by our its recognized expand stages, continue business in important product to confident maintain early industry in is to and will total

building strategy out Refining and priority remains our a strategic key lifetime. e-commerce for

net quarter ago an of were This slightly exceeded our e-commerce quarter, below XX% increase e-commerce when This from represents net overall of sales contributing comparable meaningfully the quarter, nearly net outperformance. a total our year sales our to X.X% sales XX%. for the

on see our we capitalize market strong are We product are the ensure on the position. expansion we continuing focus We strategy to positioned opportunities channel bolster channel. new a online development best in to to to significant and our hone maintain

robust Looking incremental many product ahead, are are pipeline, about excited of our we opportunities. revenue new which

the different lifetime. Production X with April Dali second in the all begin for in is year. is on launch of our branded channel the announced which Partin previously and is of well products product of to dollar track new underway, products across slated This the shipments for channel, categories, half a majority

reinvigorating the reduce exposure XXXX. to of initially supply will be These with products quarter being in with available online first e-commerce channels. chain In issues our our line swell our well commitment items robust across swell.com China. of We are also as on new pipeline to launched as in

our in We capacity production to ramp Mexico up facility. continue

our of financial our for remains goods outside with we we and on the reach with the on on being to meeting by pleased stated are facility and as capacity sheet previously initiatives, enter of management target well track priority approximately are And our sourcing XXXX. position the to other China balance end full in us, of XXXX. our of spend year. now a operational way we XX% Active combined With

working businesses, throughout which our cash management to a disciplined detail Our shortly. international both in in XXXX will noticeable improvement in led U.S. Larry and discuss capital further year-over-year

priorities. to strategic prudent remain M&A approach align are capital allocation to We value-enhancing our in with and that opportunities our open-minded

summary, pleased with across they evaluate in momentum which strategic strong and out entering as XXXX. to the off opportunities focused, The continue our work buyers. to market, are a XXXX arise, is current done our close business company. the as We we especially the years as we are reposition will transform In business several have we paying significant agile more we over and past favors

meaningful value underway new by we Looking organization. new growing across excited ahead, shareholders. market into our work to and our the expanding significant channels already are continue share, innovating generating products, for

to the With that, now I'll turn over Larry. call

Laurence Winoker

Rob. Thanks,

in reported of we As XXXX. or was $X.X $X.XX income diluted $X.X for or share morning, fourth quarter quarter million share the net fourth of diluted per XXXX $X.XX the per million versus this

of $X.XX quarter to $X.X $XX.X compared in was or share or And to from in to of net full the as compared the period. fourth was operations from $X.X the million $X.XX Adjusted XXXX per income XXXX million million. $XX.X diluted as the fourth million year, EBITDA for was for quarter diluted million Adjusted share per $XX.X for fourth period. Income for 'XX quarter $XX.X income million was the XXXX million operations XXXX of compared in adjusted the 'XX $XX.X XXXX.

Adjusted in EBITDA GAAP net adjusted financial income are income, to release. adjusted earnings which from operations measures reconciled measures, are the and our non-GAAP

months X.X%. the to unless Home decline during most shipped warehouse U.S. sales stated million. offset the lower of due X occurred corporate was of Following by fourth the products decrease Tableware hydration the year and Solutions channel. was XXXX, the was in quarter by Consolidated and Tableware XXXX first declined The $XXX.X sales otherwise. Home comments its as strong category. to sales by lower of The Solutions the decrease in X% partially and segment for sales program in decreased Kitchenware categories. are

or million dollar $X.X U.S. increased to International million $X.X segment in million. sales $XX.X by constant

Asia in attributable quarter XXXX. market to As Rob sales share higher the increase was from launch too. sales, and increase International an the fourth up had in its go-to-market e-commerce discussed, sales earn the since gains The the quarter, strategy fourth of of first and in

XX.X%. margin mix. gross inbound margin to segment favorable XX.X% improvement product The from increased to Gross XX.X%. rates from to lower is XX.X% and increased due freight U.S.

percent to for its from from need attributable of efficiency. operating to the segment X.X% in International, gross most excluding outside distribution margin inventory, the decreased from and versus a shipped improvement goods which significant slow-moving reduction storage XX.X%, expenses, inventory. warehouses, were redesign The was improved notably For expenses U.S. X.X%. eliminate XX.X% warehouse reserves as to certain

costs In to safety abating insurance reduce pellets. experience [indiscernible] as addition, lowered inflation and such some better other expenses

to freight expenses the than of from million. rates consideration. from lower administrative [indiscernible] due $XX.X lower labor shipments more $X.X percentage was segment by a Selling, as $XX.X reductions a decreased versus cost X.X% to of to and offset decrease improvement XX.X%. International International expenses expenses goods XX.X% decrease outbound higher U.S. general for of was SG&A more from The Netherlands warehouse. and by acquisition-related attributable These million. XX.X%. XX.X% sales, expenses The contingent to debt distribution warehouses decreased by decreased segment rates. shipped million percent the to bad $XXX,XXX to in increased expenses $X.X And and a allowances as million. net were

due As a of period volume. from the net XX.X% expenses higher to to decreased on XX% of sales effect percentage expenses sales,

increased expected expense, fees the by on term was debt, due write-off increased due $X.X rates of million. by earned. for borrowings. $X.X offset expense average by $X.X prior expenses to The reduction rate corporate million Unallocated million to loan be unamortized swaps, [indiscernible] lower amendment. awards year variable to excluding to stock for mark-to-market Interest adjustment substantially not a interest performance loan higher for reflected our debt an of

the and nondeductible local due both foreign For statutory QX 'XX which is taxes, the 'XX, and benefit exceeded and recorded. expenses to no income tax for rate in state losses expense, primarily rate,

XX.X% Vasconia of Vasconia. passive our Grupo to Grupo its interest recorded related proportional for And a investment us. losses. our equity in share is We

our with in repaid with $XX.X of November, and of we debt, until to reminder, facility permanent now a this Finally, In receivable be availability X. extend, Liquidity of August we liquidity. reduction term in balance We million and XXXX. million includes million debt principal. we the million And maturities cash principal sheet. agreement. term plus repaid amended continues strong of balance Notwithstanding to sheet as under our our purchase June connection very extended turning loan. have loan no 'XX, In $XX.X and credit $XXX our $XX amend

a EBITDA This Our comments. adjusted year-end year-end our considerable improvement was from net XXXX. ratio of X.Xx, at to concludes debt prepared as

And operator, with the please open questions. line

Operator

Company. & first Sidoti Lebiedzinski our comes Anthony And Instructions] [Operator with from question

Anthony Lebiedzinski

fourth first, terms the quick just of a follow-up sales. So quarter in

So shift shipments November, about to customer. club I large conference on in certain call warehouse you guys a a talked know your last for timing

sales reason there? segment . a that ago because there was U.S. from was the So else hurt happened of anything Or was -- down primary segment shift? sales was this timing were year the that why U.S.

Robert Kay

Yes.

driving that's If our a outperformance to right? and fourth club the a look the revised we year-over-year at related there guidance which versus The club basis, revised that So it last performance. was channel. you quarter upward our not in quarter on guidance, didn't program, came above issued year-over-year repeat, was

Anthony Lebiedzinski

And up Okay. strategy. Got e-commerce follow the Rob. to the then regards in overall, to you, just

So XX% this for in look you to you mentioned profile that guys it margin And forward, channel wondering year? others? a of Do how of mean, about you and the fourth in you as sales quarter. high mind the goal have terms I do you versus full that want have get then that the number for was just in your to

Robert Kay

me quarter. the way, I the in let give By will and Anthony, Yes, Larry the believe particulars. start then you XX.X%,

opportunities. target So consumer sales our to we a the do sell in is those wherever not philosophy mind is to and number maximize have

spend reorient share in and is channels did we approach, in growing in how our we've we channel. why growing across each terms So all our successful of been which

tweaked share. off paying market it's for ago, we that us nicely gaining to So months a X about bit X and little in

in to in X So trying there's just overall months approach experiencing a spending, been So But more ]. in we're years number if channel pie light the quarter being isn't market towards is the that us spend [ to again, part or the driven is their e-commerce of full total to for the X be success. Larry, drive times it the right? in that where -- e-commerce want of market, it's we enhanced giving target the upon really channel, dollars every now, specific channel, what for XX%, last will the by XX% we're no than want to more you So that maximize consumer least which we give based and now which has shift consumer and right? us. at

Laurence Winoker

Yes.

e-commerce 'XX year, full was XX.X% the full the XXXX of for was So sales and year million. $XX.X increased sales,

Anthony Lebiedzinski

Got you. Perfect.

the And e-commerce as profile versus so that as far others, margin for is comparable?

Robert Kay

Yes.

are there answer which I different have but comparable, that. it Sorry, is got different to Yes. dynamics. channels,

a is does run in your which margin. benefits. channel, It lower priced yes, accordingly. have club healthy But us, the a capital about all working very for usually and yes. talked question answer the does we Again, is As it's gross general, good is channel at

Anthony Lebiedzinski

you. Got

Okay.

typically if you some I not additional in as as you're guidance. that yet should providing you if So far just But -- May. wondering -- you just know guys I know color. could provide could do

So you retail have in your top far conversations as traffic as your or regards demand customers, online are to you as with them hearing traffic. from what overall

you share can we recalibrate here what after models Just us results. try our with the as to

Robert Kay

comfortable. stable So having see market There's be and more the less discounting you seems when are than to they're trouble. retailers definitely

see with next don't conversations a being with the discussion. So in no there There seeing there week But big are the healthy that. comfortable isn't market. the discounting that having. after downward is we're show we're more We dialogue happens a industry's we

Anthony Lebiedzinski

you. Got

last turn then And before to question I others. Okay.

as a can think you It as you obviously. you looks So Or that realized? a of bulk inventory cash some do think there's inventories? well. mean, improvements already you we your is do reduce at has been some make? the But improving you far kind managing healthy done do further flows. can are with this as as when I look think like forward, you I that nice you quarterly of inventories, just know look variations, like there further levels job

Robert Kay

just backing very cash strong profile second, Anthony, flow. is the again, a free financial Lifetime's up

flow, lot very the balance very and couple ocean have COVID-related. issues, macro-driven of over years, and generate of a strong a challenges cash So freight In last we sheet. including trade the issues, good free availability we

we We heavy to made in about inventory this we always we've grew. higher a that margin decision, 'XX, to In in out levels. public or help robust, market because inventory. as in good wasn't share, as we is and reduced were use levels. again, very market by point orderly the invest said, those that an inventory which XXXX, our and inventory, as We gain more basis when retained -- we we And investing maintained

it a wasn't So and Larry an was it almost just like in helped to million we monetize as of term and XXXX. repay that. mentioned, the helped us, loan it we inventory, $XXX excess. investment, us That in were position was It in dumping be

So just in strong. very general, it's

in inventory more where beneficial high-growth that in with in markets, for times, in international -- ability can robust not quicker now strong that us, an We they reduce they the it trade, to today. further their they in in the push levels which vendors down do own to distribution centers relied into U.S. Do and want caveat like replenishment less That general the retailers economic to that inventory very where in we're us smart we and their because are that stores. people environment a turns they're ships environment. from our relied have more more, on X so have been has but

inventory our helps So big room and off RDCs it's theirs. is in that there balance an But U.S., numbers the us turns of taken we've still always in not the terms international. because sheet of

Operator

Genuity. from [Operator with Instructions] McNamara Brian Our next comes question Canaccord

Brian McNamara

to So X expect if Rob, November, has . rebound changed months that of all not visibility did curious in as in or I'm much U.S. poor. mentioned at XXXX QX end that remains you markets relative you pretty in the view either ago. a

Robert Kay

I we answer mean, we exceeded first, Tough own. everyone's a revised our starting guidance including Brian. to our to had little right, expectations, exceeded that, we QX Yes, up bit. with

good, terms we performed expected obviously. it and market stronger of But our expectations fairly we the business, better expected, top were in of on that's than our what did and positive. So than

getting still data So points. we're the

new market We a this we year whole a there's and as launch pickup. new a channel are line, particularly big share

in So general than is get is but North that's our where there from still that normal There clarity, we're internationally, unknowns not see results by a think we'll in end terms so that absolute market an better little still America but is conditions. what in delivery of of we'd incremental. market less in I results, clarity there economy, a newness

Brian McNamara

in and product recent intend on how hear position ramping with here? the to the segment to for new I'm your hydration nice It's the given competitive I market in you overall, helpful. brand guess, views launches That's the the curious craze Sell QX. intensity Stanley

Robert Kay

with is category bought category. good very it has Still Stanley tremendously. a Yes. well when investment it's to on see whole Walmart. great as channels, X from and to The actually, has inherited well, and and we gained And that really product Stanley the guys, phenomenal [indiscernible] needed we as we phenomenon by From participant the just category going additional driven have perspective, primarily have. driving has our development by spell.com They've grown a of pipeline, done And X we equity. been reinvigorate we at e-commerce need other brand brand one was particularly you'll And a phenomenal that. or a and just you particularly see done a products. can that. pure-play start

us, everyone, right, So really keep but big what which is -- including scale you with entrance high-graded very into Stanley model, is. has these

And look, they've job. done a phenomenal

So major Stanley need in hydration. now, in done a It's story example, reemphasize also increasing need Built media. out. that is Swell, has to advertising a a particularly with are a tremendous We great we to job get our already but are people brand. participation the We good built. the story social because has

online, see see product we will market, you'll to So to sell reinvigorated are which to development, see you more we're brand had about. we continue spending very both go come already you built that and reinforce equity and our enthusiastic will

Brian McNamara

reasonable fiscal growth obviously, guidance this until expect providing I Great. know is not May, it line year? That's top helpful. to you're but

Robert Kay

we May, into are to mathematic wait General have those. is mean, thing to be launch We're look has every channel going with one XX,XXX a a They'll until very major one doing but stores, right? I Dollar at XX,XXX shortly. just Yes. of in

impact. of going a that decent amount an be be in will that's have Part to won't So 'XX. 'XX, but until

Brian McNamara

Okay. earnings. for investors excited since And what I'm XXXX done. done I'm The get QX has your quite moving curious well it should stock forward. and then

Robert Kay

you stock committed the own own lot shareholders Brian terms as people management this we're that everyone the think on runup own just in math pleased our know, and still of the their money company. year. in and with vote can very very So tremendously of and our with dollars. the stake the Board are and we're undervalued, And We of the with key and company this a it's

So We're management think something we if turning see We are when math. that. starting just Mikasa the flow some the we you XXXX, as time, just relaunched today. takes that and there. has look We change operation, around we but Food the there in potential. to is we are traction. we relatively cash But huge where international been huge at so. There's that pleased. our and Service the Hospitality There's we COVID opportunity streamlined got generate Mikasa Hospitality, we particularly undervalue we've business in launched also initiative business business grew delayed put together. our the

an you're That we've traction on, in gained real years. once talked XXXX as spec-ed selling beyond, in really annuity for business, particular. see But in we'll real product business results we've and same you're about, that is -- XXXX,

There's We bumps. fomenting now excited remain very are been something ramp excited. some have and about. being we talked will see about that's and up, that that that So very,

lost line. any a in proportionately, that of there market to is share, excited to grow, haven't as just but very falls a is company bottom about lot continue Very we which after the The bounds And streamlined. COVID. positive have been We some that. XXXX

and have first we M&A strategics years advantage -- brought overemphasize the in terms of don't companies. for an opportunities, the time but We in of have talk dozens XX

do -- us. So strict maintain it we that. businesses a sacrifice we're opportunity discipline for transact be will will to able translate that more more but we're going to the we'll discipline. we X, Hopefully, today a to cautiously we we'd Frankly, our aggressive, lot not optimistic be wanted think financial and opportunities And is very in takes be if but and to much buying

there's all from that to not create So course, of cash growth above alone the that think many hopefully create flow just grow. in opportunity continue these the us value and levers with continue terms ample to value, a generate, for we excite did let we excites ability different generation basis, public nice we levers, flow And even market. there's equity cash we the if of to we

Operator

questions further at management the hand closing this There back are I'll for time. remarks. to no floor

Robert Kay

call. Thank want open has for with our guidance you as you, you, Thank issuing with look comments interim. to next year Larry and I day. Thank our in full the a and discuss everyone, is who forward or any or . attending operator. We our our anyone questions remain very great for much, custom have call. aspect us to

Operator

may today's concludes parties This call. disconnect. Have a All good day.

Lifetime Brands (LCUT) 12 Mar 242023 Q4 Earnings call transcript