Lifetime Brands, Inc. · NASDAQ:LCUT
Lifetime Brands — Investor Presentation (November 2021)
39 slides from Lifetime Brands's investor presentation, Nov 4, 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements In this presentation, the use of the words “believe,” "could," "expect," "intend", "may," "positioned," "project," "projected," "should," "will," "would" or similar expressions is intended to identify forward-looking statements. Such statements include all statements reg
Slide 3: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures This presentation contains non-GAAP financial measures, including adjusted net income (loss), adjusted diluted income (loss) per common share, adjusted income (loss) from operations and adjusted EBITDA, adjusted EBITDA margin, adjusted leverage ratio, free cash flow and
Slide 4: Lifetime Brands: Who We Are
4 Lifetime Brands: Who We Are Leading durables consumer products company with a focus on home products • ~80% owned/controlled and ~20% licensed and private label consumer brands with targeted brand equity • #1 positions in Kitchen Tools & Gadgets*, Cutlery,* Barware Accessories, Bath Scales*; #2 po
Slide 5: Lifetime Brands Investment Highlights
5 Lifetime Brands Investment Highlights Leading global designer, developer and marketer of a broad range of durable consumer products with a focus on the home Leading portfolio of strong, recognizable brands with multi- channel growth opportunities in core end markets Significant opportunities in ad
Slide 6: Lifetime’s Strong, Recognized Brands
6 Lifetime’s Strong, Recognized Brands Portfolio of brands with targeted brand equity
Slide 7: Diversified Channel Strategy
Diversified Channel Strategy Channels Mass Market Specialty/Independent Warehouse Clubs E-Commerce/TV Off-Price Department Stores Commercial LTB Europe Grocery DTC Revenues by Channel 7 Mass Market Off-Price Department Stores Specialty Stores Warehouse Clubs E-commerce/TV Supermarkets Independent Re
Slide 8: Leading Product Categories
Kitchen Tools & Gadgets Cutlery Kitchen & Bath Measurement Barware / Pantryware Tabletop #1 U.S. category supplier* Leading national brands at key price points, including Farberware and KitchenAid Core category with complementary licensed and private label brands #1 U.S. provider*: – Open-stock cutl
Slide 9: Licensed Brands & Private Label Provide Additional Growth Stream
9 Licensed Brands & Private Label Provide Additional Growth Stream • Enable retailers to develop their own brands, while minimizing their start-up costs • Broaden revenue stream to capture incremental market share through supplemental brands • Capture opportunistic trends • Support retailers with ma
Slide 10: E-Commerce Three Distinct Categories
10 E-Commerce Three Distinct Categories Pure Play Omni Channel Direct to Consumer &
Slide 11: Lifestyle/Emerging Brands
Lifestyle/Emerging Brands • Built, a leading fashion brand, is gaining significant market share in insulated bags, hydration, and lunch boxes. It has broad consumer appeal with significant digital presence and broad brand recognition. Acquired $2 million revenue business and led by founder, revenues
Slide 12: Lifetime 2.0 Accomplished: Strategic Plan Led to Transformation
12 Lifetime 2.0 Accomplished: Strategic Plan Led to Transformation Merged two industry leaders to create a powerhouse in consumer durable products 2018 successfully focused on integration of one unified business platform and achievement of a leaner cost structure 2019 strategy focused on optimizatio
Slide 13: The Next Phase of Growth
13 The Next Phase of Growth Key Growth Drivers Food Service Opportunity to leverage recognized brands and strengths in design, manufacturing, and distribution that we have developed on the consumer side to further penetrate the commercial market. Adjacent Product Categories Capitalizing on opportuni
Slide 14: Operations Redesign Project Timeline & Milestones
14 Q3 2020 Engaged Advisors to Analyze Opportunity Q3 2021 Operations Redesign Plan Finalized 2022 Begin Implementation of Plan 2023 Open New Warehouse and Invest Capex to Execute Plan 2024+ ~$6.0 – $9.5M+ of Annual Cost Benefit Project Timeline & Milestones End Goal: Three U.S. Distribution Centers
Slide 15: Commercial Food Service Initiative
15 • Launched Mikasa Hospitality in 2019 • Existing presence in back-of-house industry segment for 15 years • Focused on developing a complete front-of-house product line similar in scope and quality to the top existing names • Plan to add future category additions including: - Glassware - Buffet an
Slide 16: The International Opportunity
16 16 The International Opportunity • International business now positioned to thrive and compete in the new retail environment • Presence in over 100 markets • Approach new market entry with tailored country by country plan • Targeting break even in 2021 vs $10 million loss in 2020 • Total addressa
Slide 17: Adjacent Product Categories
17 Adjacent Product Categories Ability to leverage Lifetime’s leadership in design, manufacturing, and scale to expand into adjacent product categories • Organic and external investments to create incremental growth • Pursue identified categories and/or product development that present high growth o
Slide 18: Additional Growth Through Disciplined M&A
18 Additional Growth Through Disciplined M&A • Strategic program to provide long-term growth opportunities • Focused on revenue growth opportunities and/or margin expansion • Investigating opportunities to expand product categories and brand offerings • Further generate operating economies with exis
Slide 19: Impact of COVID-19
19 Impact of COVID-19 • While the impact of the pandemic has hurt overall retail, many of our product categories have seen a surge as consumers are cooking, eating, and entertaining more at home. • Lifetime’s supply chain has remained intact, distribution centers are operational, and office employee
Slide 20: Macroeconomic Challenges
20 Macroeconomic Challenges Company's response: • Selling price increases began in the second half of fiscal 2021 • Over the past nine months the Company has made a significant investment in inventory • Cost reduction strategy to mitigate impacts Challenges: • Limited availability of containers • In
Slide 21: Summary of Recent Operating Results
21 Summary of Recent Operating Results (1) Adjusted diluted income (loss) per common share, adjusted EBITDA, and adjusted income from operations represent non-GAAP financial measures. These non-GAAP financial measures are provided because the Company uses them in evaluating its financial results and
Slide 22: Company Generates Strong Cash Flow While Maintaining Low CapEx
22 Company Generates Strong Cash Flow While Maintaining Low CapEx (1) Adjusted EBITDA 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. See appen
Slide 23: Attractive Credit Facility with Limited Financial Risk
September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 ($ in millions) Credit Facility due 2023 $1.6 $— $— $27.3 $25.7 Senior Secured Term Loan due 2025 252.1 252.1 252.1 262.6 262.6 Less: Cash (8.7) (33.3) (30.6) (36.0) (42.7) Net Debt 245.0 218.8 221.5 253.9 245.6 LTM
Slide 24: Capital Allocation Priorities
Use strong balance sheet to gain competitive advantage Internal Investment (e.g., Commercial Food Service; Operations Redesign ) Disciplined M&A Further Deleverage Maintain current dividend rate 24 Capital Allocation Priorities 1 2 3 4 5
Slide 25: Full Year 2021 Guidance Update
The raised Full Year Guidance for the year ending December 31, 2021 compared to year ended December 31, 2020: • Net sales increase of 13.1% to 15.7% • Adjusted income from operations(1) increase of 24.2% to 31.5% • Adjusted net income(1) increase of 54.5% to 67.8% • Adjusted EBITDA(1) increase of 13
Slide 26: Path to $145 Million in Adjusted EBITDA
26 Path to $145 Million in Adjusted EBITDA(1) Key Drivers Mid single digit growth in core business Further penetrate commercial food service market Stable gross margin — normalization of input costs Leverage distribution and administrative infrastructure Expand sales in international markets Does no
Slide 27: Five Year Financial Objectives
27 Five Year Financial Objectives Sales $1.25 billion Adjusted EBITDA Margin(1)(2) 12% Capital Expenditures - Maintenance annual $5 - 7 million Capital Expenditures - Operations redesign $18 million Adjusted EBITDA(1)(2) $145 million Key Assumptions Sales growth includes organic U.S., adjacent produ
Slide 28: Strong Financial Foundation for Growth
28 Strong Financial Foundation for Growth Significant cash flows will enable continued deleveraging, investments in growth, and opportunistic M&A Steady Cash Flows Strong Free Cash Flow Growth initiatives yielding additional cash flows Diverse and strong financial customer base Strong Credit Profile
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Slide 30: Adjusted Net Income (Loss) — U.S. GAAP Reconciliation
30 Adjusted Net Income (Loss) — U.S. GAAP Reconciliation Adjusted net income (loss) and adjusted diluted income (loss) per common share (in millions, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, Year Ended December 31, 2021 2020 2021 2020 2020 Net incom
Slide 31: Adjusted Income From Operations
31 Adjusted Income From Operations (1) Bad debt reserve recorded in the first quarter of fiscal 2020 to establish a provision against potential credit problems from certain retail customers who may have financial difficulty that has been caused or increased due to the COVID-19 pandemic. This reflect
Slide 32: Guidance for the Year Ending December 31, 2021
Guidance for the Year Ending December 31, 2021 Adjusted EBITDA guidance for the full fiscal year ending December 31, 2021: (in millions) Net income guidance $30.9 to $33.6 Add back: Income tax expense 12.6 to 13.4 Interest expense 15 Depreciation and amortization 23.5 Stock compensation expense 5 Ot
Slide 33: Reconciliation of GAAP to Non-GAAP Guidance, Continued
Reconciliation of GAAP to Non-GAAP Guidance, Continued Adjusted income from operations guidance for the full fiscal year ending December 31, 2021 (in millions): Income from operations guidance $59 to $62.5 Wallace facility remedial design expense $0.5 Adjusted income from operations guidance $59.5 t
Slide 34: Adjusted EBITDA — U.S. GAAP Reconciliation LTM September 2021
34 Adjusted EBITDA — U.S. GAAP Reconciliation LTM September 2021 Three Months Ended Twelve Months Ended December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 September 30, 2021 (in millions) Net income as reported $15.2 $3.1 $5.8 $12.6 $36.6 Undistributed equity (losses) earnings, net (1
Slide 35: Adjusted EBITDA — U.S. GAAP Reconciliation LTM June 2021
35 Adjusted EBITDA — U.S. GAAP Reconciliation LTM June 2021 Three Months Ended Twelve Months Ended September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 June 30, 2021 (in millions) Net income as reported $13.9 $15.2 $3.1 $5.8 $38.0 Undistributed equity (losses) earnings, net (0.1) (1.6)
Slide 36: Adjusted EBITDA — U.S. GAAP Reconciliation LTM March 2021
36 Adjusted EBITDA — U.S. GAAP Reconciliation LTM March 2021 Three Months Ended Twelve Months Ended June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 March 31, 2021 (in millions) Net (loss) income as reported $(4.0) $13.9 $15.2 $3.1 $28.2 Undistributed equity losses (earnings), net 0
Slide 37: Adjusted EBITDA — U.S. GAAP Reconciliation LTM December 2020
37 Adjusted EBITDA — U.S. GAAP Reconciliation LTM December 2020 Three Months Ended Year Ended March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020 December 31, 2020 (in millions) Net (loss) income as reported $(28.2) $(4.0) $13.9 $15.2 $(3.0) Undistributed equity (earnings) losses, net
Slide 38: Adjusted EBITDA — U.S. GAAP Reconciliation LTM September 2020
38 Adjusted EBITDA — U.S. GAAP Reconciliation LTM September 2020 Three Months Ended Twelve Months Ended December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 September 30, 2020 (in millions) Net (loss) income as reported $(14.5) $(28.2) $(4.0) $13.9 $(32.7) Undistributed equity losses (e
Slide 39: Thank You
Thank You
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