Lifetime Brands, Inc. · NASDAQ:LCUT
Lifetime Brands — Investor Day (November 2019)
117 slides from Lifetime Brands's investor day presentation, Nov 14, 2019
Slide 1: Investor Day November 2019
© LifetimeBrands NOVEMBER/2019. INVESTOR DAY
Slide 2: Forward-Looking Statements
Forward-Looking Statements In this presentation, the use of the words “believe,” “could,” “expect,” “may,” “positioned,” “project,” “projected,” “should,” “will,” “would” or similar expressions is intended to identify forward-looking statements. Such statements include all statements regarding the g
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains non-GAAP financial measures, including consolidated net sales in constant currency, adjusted net loss, adjusted diluted loss per common share, gross margin (excluding non-recurring charges) and adjusted EBITDA. A non-GAAP financial measure is a
Slide 4: Agenda
1 Introduction 6 International Sourcing / Supply Chain / Operational 2 Strategy Overview 7 Efficiency Go-to-Market / Innovation / Product 3 8 Financial Platform to Drive Growth Development 4 E-commerce / DTC Opportunity 9 Q&A 5 Food Service
Slide 5: Strategy Overview
Strategy | Overview Rob Kay
Slide 6: Lifetime Brands: Who We Are
Lifetime Brands: Who We Are 2 million ft2 Leading durables #1 positions in of warehouse and consumer products Barware manufacturing space company, with focus on Accessories, Bath across United States, home products Scales,* Europe, China and Cutlery,* Kitchen Puerto Rico distribution Tools & Gadgets
Slide 7: M&A: Accelerating Growth Through Strategic Expansion
M&A: Accelerating Growth Through Strategic Expansion Lifetime Brands has grown steadily for more than 70 years 14 TRANSACTIONS 2012 2013 2014 2016 2017 7
Slide 8: Largest Non-Electric Housewares Company
Lifetime Brands Today: Largest Non-Electric Housewares Company Filament acquisition made Lifetime Brands the industry leader and strengthened brand portfolio Source: Euromonitor Retail Sales Data for North America CY2018 Housewares industry, including cooking utensils, dishes, tableware, cutlery, dr
Slide 9: Lifetime Brands Investment Highlights
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 Significant Best-in-class More efficient Strong cash flow of strong, opportunities in innovation engine global platform gener
Slide 10: Lifetime's Strong, Recognized Brands
Lifetime’s Strong, Recognized Brands Portfolio of brands with targeted brand equity 10
Slide 11: Licensed Brands & Private Label Provide Additional Growth Stream
Licensed Brands & Private Label Provide Additional Growth Stream • Enable retailers to develop their own brands, while minimizing their start-up costs • Support retailers with market analysis, product assortments, promotional and merchandising solutions 11
Slide 12: Stable, Diversified Customer Base
Stable, Diversified Customer Base Diversified revenue sources and stable end markets result in significant cash flow generation Revenues Channels Brands Categories Total Owned Licensed Private Label Kitchenware Tableware Home Solutions Mass Market Specialty/Independent Warehouse Clubs E-Commerce/TV
Slide 13: Lifetime Brands International Footprint
Lifetime Brands International Footprint Efficient global platform Lifetime Brands Europe Lifetime Brands Canada Lifetime Brands B.V. Sourcing / Supply Chain Equity Stake in Grupo Vasconia Hong Kong Sales Office 13
Slide 14: We Are a Different Company Today
We Are a Different Company Today Lifetime Brands 2017 Lifetime Brands Today • Industry consolidator Broadened market focus Successful integration of Filament - Acquisition strategy focused on short-term • Pursuing organic growth opportunities acquisition accretion in adjacent categories • ~$12 milli
Slide 15: Lifetime 2.0: Relaunching an Industry Leader
Lifetime 2.0: Relaunching an Industry Leader Taking deliberate, decisive actions to create shareholder value LONG-TERM TARGETS • Organic growth through product development and $900+M data-driven marketing in Revenues (vs. $745—$750M expected in 2019) • SKU rationalization to focus on core products a
Slide 16: Progress on Lifetime 2.0
Progress on Lifetime 2.0 Initial Self Report Card Increased revenues 32% and EBITDA 63% Pivoting strategy from sales / transactional to strategic product / marketing data driven Exceeded expected synergies / cost efficiencies from Filament acquisition Analyzing portfolio assets and rationalizing SKU
Slide 17: Building the Core: Investments in Brand Equity
Building the Core: Investments in Brand Equity • Change focus from transactional to strategic • Drive business through data-driven approach • Portfolio rationalization and prioritization • Focus on core brands and product categories • Invest in brand equity with consumers and retailers • Scale as a
Slide 18: STAR: Strategic Thinking and Results
STAR Strategic • Systematic way for each business unit to develop a unique strategic plan Thinking • Helps identify challenges and opportunities along with plans to maximize sales And • Once executive management signs off, it becomes a blueprint for Results product development
Slide 19: Strategic Brand and Product Approach
Strategic Brand and Product Approach • Strategic portfolio planning program implementation • New stage-gate product development process • Emphasis on key consumer brands and products in core categories • Focus on core brands and product lines that align with positive consumer and market trends • Eff
Slide 20: Investments in Brand Building: Traditional Media
Investments in Brand Building: Traditional Media Trusted brands and innovative products receive over 12 billion annual consumer impressions 20
Slide 21: Investments in Brand Building: Social Media Influencers
Investments in Brand Building: Social Media Influencers 150+ category-specific influencers reach over 17 million targeted consumers annually 21
Slide 22: Portfolio / SKU Rationalization
Portfolio / SKU Rationalization Refocusing resources on brands and products that fit our profitable growth strategy Eliminated product offerings that do not provide 7,000+ adequate returns SKUs eliminated Identified non-core assets to divest near-term $30M—$45M Will continue to evaluate portfolio to
Slide 23: Incremental Growth Opportunities Summary
Incremental Growth Opportunities Summary Food Service International Expansion • Entered market in mid 2019 • Presence in over 100 markets currently • Expect to start seeing incremental • Approach each new market with tailored revenue contribution in 2020 plan to best realize the individual opportuni
Slide 24: Efficient Global Platform to Drive Growth
Efficient Global Platform to Drive Growth Leverage shared services and economies of scale to provide competitive advantages Sourcing / Supply Chain Distribution U.S. Sales Force • Sourcing products in Far East for • Well invested, state-of- • In-house sales force represents 60 years the-art distribu
Slide 25: Efficient Global Platform to Drive Growth
Efficient Global Platform to Drive Growth Leverage shared services and economies of scale to provide competitive advantages IT E-commerce Creative/Marketing • SAP platform designed to • Enables us to reach • In-house packaging and scale and rapidly integrate consumers directly photography reduces co
Slide 26: Experienced Management Team
Experienced Management Team Right leaders in place to execute Lifetime 2.0 Rob Kay CEO Dan Matthew Tim Sara Cliff Jackie Larry Siegel Canwell Simmone Shindel Siegel Fagan Winoker President, President, LTBE Chief Integration General Counsel Global Supply Human Chief Financial North America Officer Ch
Slide 27: Multiple Paths to Value Creation
Multiple Paths to Value Creation Path to $90+ million in Adj. EBITDA(1) in next five years • Leverage leadership positions and growth opportunities in core markets • Drive end market growth through digital investment opportunities • Opportunity to grow / positioned to win in commercial food service
Slide 28: Go-to-Market / Innovation / Product Development
Go-to-Market / Innovation / Product Development Dan Siegel
Slide 29: Channel Strategy
Channel Strategy Mass Market Off-Price Department Stores Specialty Stores Warehouse Clubs E-commerce/TV Supermarkets Independent Retailers Commercial DTC Lifetime has Over 7,000 e-commerce sites independent retailers for direct-to-consumer sales. 29
Slide 30: Go-to-Market Strategy
Go-to-Market Strategy • Adaptive approach to fit rapidly changing retail landscape • Shift from transactional to strategic sales focus • Vendor consolidation • Best-in-class sales force • Scale provides competitive advantage • Development of brand equity targeted towards particular retail channels
Slide 31: Mikasa
Mikasa • Largest tabletop brand at Lifetime Brands • Over 200 million annual impressions through social media and public relations • Luxury brand embraced by key retailers
Slide 32: Farberware
Farberware • Over $200 million of retail sales per year • Leading brand in kitchen tools & gadgets and cutlery • 89% consumer brand recognition • Better brand with key distribution and excellent retail sell-through
Slide 33: Built
Built • 49% CAGR since 2015 • Gaining significant market share in bottles, bentos and bags • #1 social media lifestyle brand for company; 60+ influencer partners
Slide 34: Taylor
Taylor • #1 market share in measurement* - Gap between #1 and #2 is vast • High-margin, high-performing category for retailers • Known for innovation in precision measurement. Most technology comes from food service and moves into consumer * NPD Group
Slide 35: Instant Pot
Instant Pot • Best selling small appliance • Huge need in market for accessories to work with Instant Pots • Lifetime is the only official Instant Pot accessory licensee • Capitalized on the trend and brought to market 50 items that work specifically with the appliance • All sales are completely inc
Slide 36: AllRecipes
AllRecipes • Connecting digital to brick and mortar • Over 40 million Americans visit AllRecipes.com monthly • Displacing competition with a fresh new concept that will excite and enhance the Kroger guest
Slide 37: Scott Living
Scott Living • Identified the popularity of Scott Brothers and potential for retail • Added meaningful brand to what has traditionally been an unbranded category • Created a big concept and launched with Kohl’s • Quote from Doug Howe, CMO Kohl’s, “The addition of Scott Living reinforces our continue
Slide 38: Industry Leading Design & Engineering
Industry Leading Design & Engineering Largest In-House Design Team in Industry Creates Competitive Advantage • Scalable model with strong senior leadership in key design centers • 150 designers and engineers • Unique skill set across multiple locations (Garden City, NY; Oakbrook, IL; Seattle, WA; Me
Slide 39: State-of-the-Art Technology and Capabilities
State-of-the-Art Technology and Capabilities • 15 3D printers, 3D scanners, Niton XRF analyzers, CDC reductive machine • Failure Mode and Effects Analysis predicts when a product will fail • Full model shop 39
Slide 40: Levels of Innovation
Levels of Innovation Understanding how project fits into these levels is key to: • Setting realistic expectations • Never disappointing the customer • Giving consumers a five-star experience 40
Slide 41: Levels of Innovation: Level 1
Levels of Innovation: Level 1 Continuous, incremental improvements to existing products • Case Study: Farberware Can Opener • Interior updates to improve performance • Updated colors to appeal to consumers
Slide 42: Levels of Innovation: Level 2
Levels of Innovation: Level 2 Adding products to existing lines of products • Case Study: KitchenAid Dish Rack • Added new features to expand product line and category 42
Slide 43: Levels of Innovation: Level 3
Levels of Innovation: Level 3 Creating new lines of products and/or categories • Case Study: Instant Pot • Created new line from scratch 43
Slide 44: Levels of Innovation: Level 4
Levels of Innovation: Level 4 Developing products that are new to the world • Case Study: Built Bottle • Patented technology with new slide lock 44
Slide 45: Open Innovation
Open Innovation • Connection with thousands of individual inventors - Example: Full-time consultant who is prior president of United Inventors Association • Ability to tap into 300+ million people 45
Slide 46: Capitalizing on Industry Trends
Capitalizing on Industry Trends Market research Retail landscape Trade shows Surface design By partnering with global trend Consistent shopping allows us to We attend trade shows year- We are able to showcase service groups we are able to keep a pulse on the market, round, from international hubs to
Slide 47: Color, Materials & Finish (CMF)
Color, Materials & Finish (CMF) • Focuses on differentiating our products through color design, pattern design, and custom illustration • Driven by trend and materials research that is conducted throughout the world • Presented to our customers via mood boards and presentations tailored to their nee
Slide 48: Research and Data-Driven Approach
Research and Data- Driven Approach • Competitive advantage vs. smaller players • Significant spend on point-of-sale information • Fact-based selling versus anecdotal information • Larger retailers rely on this data and expect it; category advisor to Walmart • Shared costs for acquired companies with
Slide 49: Showrooms Provide Competitive Advantage
Showrooms Provide Competitive Advantage Showrooms SWOT Room • 42,000 ft2 main showroom in Garden City, NY • Gives retailers one-stop shop • NYC tabletop showroom is epicenter of tabletop • Shows actual plan-o-grams and competitive gaps • Additional showrooms in Medford and Seattle 49
Slide 50: E-Commerce / DTC Opportunity
E-Commerce / DTC Opportunity Dan Siegel
Slide 51: E-Commerce Three Distinct Categories
E-Commerce Three Distinct Categories Pure Play Omni Channel Direct to Consumer & 51
Slide 52: Pure Play
Pure Play • Strategic commitment 14% to grow internally and of Lifetime’s sales with Amazon and Wayfair 28.8% Amazon 3 year CAGR • Key relationships at top level 22.3% • SVS advantage Wayfair 3 year CAGR • Prime certified
Slide 53: Amazon Overview
Amazon Overview 1P & 3P Year-over-year sales • Estimated 27% increase from 2018 to 2019 New team structure • SVP Sales takes over 1P/3P/advertising • SVP Marketing takes over content and analysis • Scalable team can layer on additional business
Slide 54: Amazon: Current Strategic Initiatives
Amazon: Current Strategic Initiatives • Focus (hero) item program to enhance conversions; 10,000 active SKUs 2.9X to 4.0X • Constantly updating Increased ROAS content utilizing enriched photography and most 65% to 82% relevant key words in product descriptions Fill Rate Improvement • Utilize Pacvue
Slide 55: Amazon A+ Pages
Amazon A+ Pages 55
Slide 56: Omni Channel
Omni Channel Highly focused on developing best-in-class copy and service to our traditional customers to support e-commerce sites Drop ship to: 56
Slide 57: Omni Channel
Omni Channel 56.4% Omni channel is experiencing significant Costco.com YOY growth rate growth Brands and items as a 10.1% path to brick and mortar Walmart.com YOY growth rate stores 57
Slide 58: Direct to Consumer
Direct to Consumer 3.6% Of Lifetime’s sales ($25+ million) 58
Slide 59: Direct to Consumer: Current and Future
Direct to Consumer Current Future Chef’n Built • Investment in moving sites to Shopify Version 1.9 Rabbit Chef’n Pfaltzgraff • Former CMO of Filament taking over Mikasa Mikasa all DTC business Fitz & Floyd Version 2.3 Fred & Friends Commerce Cloud Pfaltzgraff SpideRefills • Focus on growing this cha
Slide 60: Case Study: PlanetBox
Case Study: PlanetBox Incubation of a challenger brand 89% of sales come from Planetbox.com 25% 3 year growth rate $88 Average order value 60
Slide 61: Food Service
Food Service Rob Kay
Slide 62: Commercial Food Service Initiative
Commercial Food Service Initiative Leveraging Lifetime’s consumer leadership to grow into adjacent markets • Entered market in 2019 with launch of Mikasa Hospitality • Focused on developing a complete front-of-house product line similar in scope and quality to the top existing names • Target 10% mar
Slide 63: Food Service Market Overview
Food Service Market Overview $11.4B ~$5M U.S. Commercial Food Service Expected Commercial Food Market Service Revenue in 2020 $2B $1.3B Target Lifetime Addressable Mikasa Hospitality Addressable Commercial Food Service Market Tabletop Market 63
Slide 64: $2 Billion Food Service Addressable Market
$2 Billion Food Service Addressable Market MARKET (%) FORECAST MARKET SIZE ($000) NOMINAL GROWTH RATE (%) Equipment 77 8,700 4.6 Smallwares 6 707 4.7 Tabletop 11 1,300 4.5 Furnishings 6 723 4.3 64
Slide 65: Commercial Product Launch Strategy
Commercial Product Launch Strategy GOOD BETTER BEST Towle Hospitality Mikasa Hospitality Mikasa Hospitality Flatware: 18/0 Flatware: 18/10 light gauge Flatware: 18/10 heavy gauge Private brand end-user dinnerware Dinnerware: porcelain and melamine Dinnerware, bone & durakasa Commodity melamine (-300
Slide 66: Future Category Additions
Future Category Additions Glassware Buffet and Hospitality Service Tabletop Accessories • Plate covers / cloches • Baskets, fry service, bread service • Beverage service – 5 gallon hydration • Dispensers • Induction heat and serve • Mixed material single service buffet • Buffet servers, tongs, ladle
Slide 67: Food Service U.S. Sales Coverage
Food Service U.S. Sales Coverage TERRITORY PARTNER TIMING Western Rep Group 3/1/19 Central No Coverage —Southern In House 4/1/19 North East Rep Group 5/1/19 Hotel/Casino Rep Group 5/1/19 67
Slide 68: Food Service Target Account Examples
Food Service Target Account Examples SEGMENT END USER DISTRIBUTOR Resort/Casino MGM Wasserstrom Hotel SLS Hotel Group Edward Don Fine Dining Morton’s / Landry’s Edward Don Casual Dining Cheesecake Factory Edward Don Fast Casual Zoe’s Kitchen Tri Mark Rental Party Rental, LTD Sold directly 68
Slide 69: Commercial Food Service Initiative Summary
Commercial Food Service Initiative Summary ~$5M Expected Commercial Food Service Revenue in 2020 10% Potential Market Penetration $2B Target Lifetime Addressable Commercial Food Service Market 69
Slide 70: International
International Matthew Canwell
Slide 71: Lifetime Brands International Footprint in 2018
Lifetime Brands International Footprint in 2018 UK 75% EMEA 20% APAC 3% South America 2% 71
Slide 72: Built Leading Portfolio Through Opportunistic M&A
Built Leading Portfolio Through Opportunistic M&A Transformed three underperforming brands to create competitive international player November 2011 January 2014 March 2014 72
Slide 73: International Transformation Overview
International Transformation Overview  Repositioned international business to thrive and compete in the new retail environment  Consolidating 8 warehouses into 1  Rightsized workforce and sourcing  Refreshed leadership team  Realigned our product portfolio to enable the right to win i
Slide 74: Purpose Built Distribution Center
Purpose Built Distribution Center Planned and executed move from low bay, inefficient operation to a state-of-the art European hub New Warehouse The Hub, Birmingham NEW CENTRALIZED DISTRIBUTION CENTER
Slide 75: Rightsized Workforce and Sourcing
Rightsized Workforce and Sourcing Restructured teams to increase efficiency and drive cost savings • Consolidated sales into one team, allowing for cross-selling opportunities ~$1.5M Consolidated finance one team, increasing Reduction in • into resource costs effectiveness and accountability • Integ
Slide 76: Realigned Product Portfolio from European Centric…
Realigned Product Portfolio from European Centric… 76
Slide 77: …To an Internationally Desirable Portfolio
…To an Internationally Desirable Portfolio 77
Slide 78: Case Study: Built's International Growth
Case Study: Built’s International Growth 3.5 2018 (First 3 Nine Months) +203% 2019 (First 2.5 Nine Months) 2 +197% 1.5 1 0.5 0 $ Millions Europe Asia Total 78
Slide 79: The International Opportunity
The International Opportunity Opportunistic and tailored approach to international expansion • Presence in over 100 markets • Approach new Europe market entry with tailored country by U.S. country plan APAC • Total addressable market internationally of $81.6 billion A STRONG PLATFORM FOR FUTURE GROW
Slide 80: International Growth Initiatives
International Growth Initiatives EUROPE Introducing country managers, beginning with France and Germany ASIA Targeting Chinese market through E-commerce AUSTRALIA / NEW ZEALAND Expanding product offering in 2019, including introducing KitchenAid UK Expanding through E-commerce, drop-ship and direct-
Slide 81: Brexit Implications
Brexit Implications • Ongoing challenge for past 3 years • Uncertainty has caused a 10% decline in 2019 • Clarity on Brexit should allow for normalization of revenues • Prepared for potential outcomes, including ensuring ability to supply even in a hard Brexit
Slide 82: Adjusted Operating Income Growth
Adjusted Operating Income Growth Projected to achieve profitability in 2019 and grow to $4.0M in Adjusted Operating Income(2) by 2020 4.0M 0.8M (0.4)M 2018 (1) 2019E (1) 2020 Outlook (2) $ USD Millions (1) Adjusted Operating Income represents a non-GAAP financial measure. This non-GAAP financial mea
Slide 83: 2022 Incremental Sales Targets
2022 Incremental Sales Targets Europe $20M Asia $10M UK $10M Total $40M 83
Slide 84: Sourcing and Operations
Sourcing and Operations Tim Simmone
Slide 85: Corporate Operations
Corporate Operations Shared services support each line of business Human Resources & Legal Marketing Direct to & Creative Consumer Services Sales • Forecasting Centralized Operations group allows streamlined overhead costs, while • Planning & Purchasing building “best in class” functions to • Sourci
Slide 86: Supply Network Demand
Supply Network Demand Sourcing Purchasing Logistics Distribution Planning
Slide 87: Global Sourcing
Global Sourcing Current sourcing initiatives worldwide balance China tariff risk 1,500+ factories located in 28 countries across the globe New Global Sourcing VP appointed to explore sourcing opportunities outside China, primarily in Vietnam, India and Mexico 87
Slide 88: China Sourcing
China Sourcing 200+ Lifetime China employees provide Tianjin sourcing services and support 11 Employees Shanghai 1,300+ 91 Employees Factories in China, directly aligned with Lifetime local office divisions Guangzhou 97 Employees Highly capable group performing diverse functions 88
Slide 89: Quality
Quality *Lifetime QM • Quality management application ensures consistent quality assurance and social compliance
Slide 90: Demand Planning & Purchasing
Demand Planning & Purchasing Forecasting Details Forecasting is collaborative and aided by S&OP process Replenishment done through a standard SAP MRP process
Slide 91: Logistics
Logistics Container Management 7,300 + containers shipped LTM (shown by destination) • LCL is limited to only a handful of containers a year Innovative “slip sheet” China Domestic Warehouse 17 • container loading program implemented to reduce handling labor at warehouses China Warehouse for export t
Slide 92: Distribution
Distribution Channels of Distribution (TTM, US Only) 5,815 Customers 71% Wholesale Shipped for US Market 22% Import Direct 4% DTC 3% Wholesale Drop Ship 9,917 Customers Shipped Worldwide 92
Slide 93: Distribution Visual Pick Pack
Distribution Visual Pick Pack Piece picking directed work application drives path efficiency, allows easy training and captures productivity for improved labor management. 93
Slide 94: Focus on Operational Efficiency
Focus on Operational Efficiency Fine-tuned practices for sourcing, demand planning, purchasing, logistics and distribution create competitive advantage in global supply network • Centralized Operation group minimizes overhead and provides “best practice”’ support to all lines of business • Global so
Slide 95: Financial Platform to Drive Growth
Financial Platform to Drive Growth Larry Winoker
Slide 96: Summary of Recent Operating Results
Summary of Recent Operating Results Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Pro forma 2018 (2) ($ in millions, except per share amounts) Net sales $215.5 $209.4 $508.0 $476.3 $502.1 Income (loss) from operations before charges 17.0 15.1 3.0 (0.8) 2.8 Impair
Slide 97: Company Generates Strong Cash Flow While Maintaining Low CapEx
Company Generates Strong Cash Flow While Maintaining Low CapEx ($ in millions) Consistent Adjusted EBITDA(1) Low CapEx(3) Strong Free Cash Flow(4) Generation $69.6 $68.0 $65.5 $2.5 (2) $59.5 $57.6 $58.0 $8.5 (2) 1 $2.5 (2) $8.5 (2) $67.1 $68.0 $58.0 $57.0 $57.0 $49.1 $10.1 $10.0 $7.9 2018 PF LTM Sep
Slide 98: Attractive Credit Facility with Limited Financial Risk
Attractive Credit Facility with Limited Financial Risk September 30, June 30, March 31, December 31, September 30, 2019 2019 2019 2018 2018 • Term Loan Agreement ($ in millions) has no negative financial maintenance Credit Facility due 2023 $91.2 $44.9 $26.5 $42.1 $ 87.2 covenants Senior Secured Ter
Slide 99: 2019 Financial Outlook
2019 Financial Outlook ($ in millions — except per share amounts) Outlook 2019 Proforma 2018(2) Net sales $745 to $750 $730.4 Income from operations $13.6 to $17.6 $22.7 Income from operations, excluding SKU rationalization and impairment of goodwill $31.8 to $35.8 $24.9 Net loss $(8.8) to $(5.8) ($
Slide 100: Impact of Tariffs and Mitigating Actions
Impact of Tariffs and Mitigating Actions Actively monitoring the changing tariff environment and have strategies in place to mitigate the impact of tariffs on goods manufactured in China Lists 1-3 Impact List 4: Products affected yet to be determined • Experienced marginal reduction in shipment as h
Slide 101: Capital Allocation Priorities
Capital Allocation Priorities 1 De-lever to Debt/EBITDA below 3x 2 Improve inventory turnover — STAR and NPD stage gate process 3 Sell non-core assets — SKU Rationalization 4 Disciplined M&A 5 Maintain current dividend rate 6 Opportunistic share repurchases 101
Slide 102: Path to $90+ Million in Adj. EBITDA
Path to $90+ Million in Adj. EBITDA(1) in Next 5 Years Low single digit growth in core Develop meaningful position in Key Drivers business the commercial food service market Expand sales in international Stable gross margin —markets normalization of tariff effects Own 30% of Grupo Vasconia, which Le
Slide 103: Five Year Financial Objectives
Five Year Financial Objectives Sales Growth—Organic (CAGR) (2) 2% Key Assumptions Sales growth includes channel Sales Growth—with Food Service (CAGR) (2) 4% and geographic expansion Leverage of existing Adjusted EBITDA(1)(2) Margin 10% infrastructure Continuous improvement in Capital Expenditures $6
Slide 104: Strong Financial Foundation for Growth
Strong Financial Foundation for Growth Significant cash flows will enable continued delevering, investments in growth, and opportunistic M&A Steady Cash Improving Disciplined Capital Commitment to Flows Leverage Profile Allocation Shareholder Returns Strong Free Cash Flow Attractive, low-risk credit
Slide 105: Conclusion
Conclusion Rob Kay
Slide 106: Lifetime Brands 2.0: A Transformational Opportunity
Lifetime Brands 2.0: A Transformational Opportunity Value Creation Drivers Value Realization Merged two industry leaders to create a powerhouse in Strong future cash flow from core business lines Increasing float and institutional shareholdings consumer durable products Supplement cash flow generati
Slide 107: Appendix
Appendix
Slide 108: Summary of Recent Operating Results
Summary of Recent Operating Results Three Months Ended Nine Months Ended September 30 September 30 2019 2018 2019 2018 Pro forma 2018(2) ($ in millions, except per share amounts) Net sales $215.5 $209.4 $508.0 $476.3 $502.1 Income (loss) from operations before charges 17.0 15.1 3.0 (0.8) 2.8 Restruc
Slide 109: Adjusted Net Income — U.S. GAAP Reconciliation
Adjusted Net Income — U.S. GAAP Reconciliation Adjusted net income (loss) and adjusted diluted (loss) income per common share (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net (loss) income as reported $(13,519) $5,948
Slide 110: Adjusted Net Income — US GAAP Reconciliation 2019 Outlook
Adjusted Net Income — US GAAP Reconciliation 2019 Outlook (In millions — except per share data) Net loss outlook $(8.8) to $(5.8) Adjustments: Acquisition related expenses 0.2 Restructuring, warehouse relocation and integration expenses 4.4 SKU Rationalization 8.5 Goodwill Impairment 9.7 Income tax
Slide 111: Adjusted EBITDA — US GAAP Reconciliation 2019 Outlook
Adjusted EBITDA — US GAAP Reconciliation 2019 Outlook (In millions) Net loss outlook $(8.8) to $(5.8) Add back: Income tax expense 2 to 3 Interest expense 20 Depreciation and amortization 24.6 Stock compensation expense 5.0 Acquisition related expenses 0.2 Goodwill Impairment 9.7 Undistributed equit
Slide 112: Adjusted EBITDA Reconciliation LTM September 2019
Adjusted EBITDA — U.S. GAAP Reconciliation LTM September 2019 Three Months Ended Twelve Months Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 September 30, 2019 (in thousands) Net income (loss) as reported $9,987 $(4,867) $(11,513) $11,175 $4,782 Undistributed equity (earnin
Slide 113: Adjusted EBITDA Reconciliation LTM June 2019
Adjusted EBITDA — U.S. GAAP Reconciliation LTM June 2019 Three Months Ended Twelve Months Ended September 31, 2018 December 31, 2018 March 31, 2019 June 30, 2019 June 30, 2019 (in thousands) Net income (loss) as reported $5,978 $9,987 $(4,867) $(11,513) $(445) Undistributed equity (earnings) losses,
Slide 114: Adjusted EBITDA Reconciliation LTM March 2019
Adjusted EBITDA — U.S. GAAP Reconciliation LTM March 2019 Three Months Ended Twelve Months Ended June 30, 2018 September 30, 2018 December 31, 2018 March 31, 2019 March 31, 2019 (in thousands) Net income (loss) as reported $(6,057) $5,948 $9,987 $(4,867) $5,011 Subtract out: Undistributed equity (ea
Slide 115: Adjusted EBITDA Reconciliation LTM December 2018
Adjusted EBITDA — U.S. GAAP Reconciliation LTM December 2018 Three Months Ended Year Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 December 31, 2018 (in thousands) Net (loss) income as reported $(11,598) (6,057) $5,948 $ 9,987 $ (1,720) Subtract out: Undistributed equity (e
Slide 116: Adjusted EBITDA Reconciliation LTM September 2018
Adjusted EBITDA — U.S. GAAP Reconciliation LTM September 2018 Twelve months ended September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2018 (in thousands) Net income (loss) as reported $5,948 $(6,057) $(11,598) $1,251 $(10,456) Subtract out: Undistributed equity in (earnin
Slide 117: International Adjusted Income from Operations Reconciliation
International Adjusted Income from Operations — U.S. GAAP Reconciliation 2018 Full Year and 2019 Outlook Year Ended December 31, 2019 Outlook 2018 (in millions) U.S. GAAP Income From Operations $(5.40) $(15.5) Add back: Restructuring expenses and integration charges 0.20 2.20 Impairment of goodwill