NASDAQ:LCUT Lifetime Brands Q4 2023 Earnings Report $9.46 +0.05 (+0.53%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$9.48 +0.02 (+0.21%) As of 04/17/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast BCB Bancorp EPS ResultsActual EPS$0.29Consensus EPS $0.32Beat/MissMissed by -$0.03One Year Ago EPSN/ABCB Bancorp Revenue ResultsActual Revenue$203.14 millionExpected Revenue$196.48 millionBeat/MissBeat by +$6.66 millionYoY Revenue GrowthN/ABCB Bancorp Announcement DetailsQuarterQ4 2023Date3/12/2024TimeN/AConference Call DateTuesday, March 12, 2024Conference Call Time11:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by BCB Bancorp Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 12, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the Lifetime Brands 4th Quarter and Full Year 2023 Earnings Conference Call. At this time, I would like to inform all participants that their lines will be in a listen only mode. After the speakers' remarks, there will be a question and answer portion of the call. I would now like to introduce your host for today's conference, TJ O'Sullivan. Mr. Operator00:00:31O'Sullivan, you may begin. Speaker 100:00:35Thank you. Good morning and thank you for joining Lifetime Brands' 4th quarter full year 2023 earnings call. With us today from management are Rob Kaye, Chief Executive Officer and Larry Winoker, Chief Financial Officer. Before we begin the call, I'd like to remind you that our remarks this morning may contain forward looking statements that relate to the future performance of the company, and these statements are intended to qualify for the Safe Harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance and factors that could influence our results are highlighted in today's press release and other factors are contained in our filings with the Securities and Exchange Commission. Speaker 100:01:24Such statements are based upon information available to the company as of the date hereof and are subject to change for future developments. Except as required by law, the company does not undertake any obligation to update such statements. Our remarks this morning and in today's press release also contain non GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in such release is a reconciliation of these non GAAP financial measures with the comparable financial measures calculated in accordance with GAAP. With that introduction, I'd like to turn the call over to Rob Kaye. Speaker 100:02:16Please go ahead, Rob. Speaker 200:02:19Thank you, TJ. Good morning, everyone, and thank you for joining us today. We had a strong 4th quarter, delivering results that helped us to meet or exceed net sales, income from operation and adjusted EBITDA targets from the revised full year guidance metrics we provided last quarter as well as analyst estimates. We are pleased with the strong net sales growth we are driving across categories, especially in our e commerce channel, which continues to gain share. When coupled with our continued focus on driving efficiencies across the business, this outperformance translated to meaningful operating income growth that we expect will continue in 2024. Speaker 200:03:11To start, I'd like to walk you through our 4th quarter and full year results at a high level. In the Q4, we delivered $203,100,000 in net sales and $21,500,000 in adjusted EBITDA compared to $207,000,000 in net sales and $19,700,000 in adjusted EBITDA in the prior year period. For the full year, we generated $57,300,000 in adjusted EBITDA compared to $58,200,000 in 2022, coming in ahead of our internal estimates, thanks to diligent expense management and a focus on incremental revenue opportunities throughout the year. Of note, our performance was notwithstanding $3,600,000 of one time charges in 2023. We have been encouraged by the improving supply chain environment in recent quarters and experienced no disruptions in the Q4. Speaker 200:04:16Though we are monitoring potential issues stemming from ongoing geopolitical challenges in the Red Sea, which have had some initial impact on ocean freight costs and shipping times. Further, with another quarter of normalized shipment and ordering activities now behind us, we believe that the oversupply issues our retails experience coming out of the pandemic have dissipated. Turning now to our international business. Throughout 2023, we remain diligent in the execution of our international turnaround strategy, and we are pleased with the meaningful progress we have made, including market share gains in these end markets. In Australia and New Zealand, the direct go to market strategy we implemented earlier this year is translating to increased listings with additional accounts, products and brand listings. Speaker 200:05:21Additionally, we continue to drive incremental revenue opportunities as we roll out new product lines into our international markets driven by our highly successful KitchenAid offering. As a result of these factors, in the Q4, we saw the 1st turnaround in year over year international revenues since 2021. As part of our international turnaround plan, we took a non cash inventory write off in the 4th quarter, which impacted our bottom line performance. But we expect that the aforementioned initiatives will have a meaningful impact on our In our foodservice business, we remain on track to achieve significant growth in 2024 as Macassa Hospitality continues to gain traction and capitalize on the market positioning achieved in 2023. While this business is still in its early stages, we are confident that Lifetime is now recognized as an important participant in the foodservice industry and will continue to expand its product placement across North America. Speaker 200:06:41We maintain our long term view that we can grow our total foodservice business to $60,000,000 in revenues by 2026. Refining and building out our e commerce strategy remains a key strategic priority for Lifetime. This quarter, e commerce net sales exceeded 23% of our total net sales for the quarter, contributing meaningfully to our overall outperformance. This represents an increase of nearly 3.5% from the comparable quarter a year ago when our e commerce net sales were slightly below 20%. We are continuing to hone our online strategy to ensure we are best positioned to capitalize on the significant opportunities we see in the channel. Speaker 200:07:38We maintain a strong focus on new product development and channel expansion to bolster our market position. Looking ahead, we are excited about our robust new product pipeline, many of which are incremental revenue opportunities. Production of our previously announced Dolly Parton branded products is well underway with shipments on track to begin in April and the majority of products slated for the second half of the year. This launch is across 4 different product categories, all in the dollar channel, which is a new channel for Lifetime. We are also reinvigorating our robust pipeline of S'well products with new items being launched in the Q1 of 2024. Speaker 200:08:28These will initially be available online on swell.com as well as across e commerce channels. In line with our commitment to reduce our exposure to supply chain issues in China, we continue to ramp up production capacity in our Mexico facility. With the facility now operational and on track to reach full capacity in 2024 And combined with other sourcing initiatives, we are well on our way to meeting our previously stated target of approximately 25% of our spend on goods being outside of China by the end of the year. Active balance sheet management remains a priority for us and we are pleased with our financial position as we enter 2024. Our disciplined cash management throughout 2023 led to a noticeable improvement in working capital year over year in both our U. Speaker 200:09:30S. And international businesses, which Larry will discuss in further detail shortly. We remain prudent in our approach to capital allocation and are open minded to value enhancing M and A opportunities that align with our strategic priorities. We will continue to evaluate opportunities as they arise, especially in the current market which favors strategic buyers. In summary, we are pleased with the strong momentum across our business as we close out 20 23. Speaker 200:10:07The significant work we have done over the past several years to transform and reposition our business is paying off and we are entering 2024 as a more focused agile company. Looking ahead, we are excited by the meaningful work already underway across our organization to continue innovating new products, expanding into new channels and growing market share, generating significant value for our shareholders. With that, I'll now turn the call over to Larry. Speaker 300:10:43Thanks, Rob. As we reported this morning, net income for the Q4 of 2023 was $2,700,000 or $0.13 per diluted share versus $3,300,000 or $0.15 per diluted share in the Q4 of 2022. Adjusted net income was $6,300,000 for the Q4 of 2023 or $0.29 per diluted share as compared to $7,500,000 or $0.35 per diluted share in 2022. Income from operations was $15,700,000 for the 4th quarter of 'twenty three as compared to $12,800,000 in the 2022 period. Adjusted income from operations for Q4 of 'twenty three was $19,400,000 compared to $18,200,000 in the 2022 period. Speaker 300:11:31And adjusted EBITDA for the full year 2023 was $57,300,000 Adjusted net income, adjusted income from operations and adjusted EBITDA are non GAAP measures, which are reconciled to our GAAP financial measures in the earnings release. Following comments are for the Q4 of 20232022, unless stated otherwise. Consolidated sales declined by 1.9%. U. S. Speaker 300:11:57Segment sales decreased by 4% to 185 point $2,000,000 The decrease occurred in the tableware and home solutions categories. Tableware was lower as most of its warehouse programs shipped during the 1st 9 months of the year, and Home Solutions decline was due to lower hydration products in the corporate sales channel. The decrease was partially offset by strong sales in the kitchenware category. International segment sales increased by 3,800,000 dollars or $2,900,000 in constant U. S. Speaker 300:12:30Dollars to $17,900,000 As Rob discussed, in the Q4, international had its 1st upturn in sales since the Q4 of 2021. The increase was attributable to higher e commerce sales and market share gains from the launch of the go to market strategy and an increase in Asia sales too. Gross margin increased to 36.4 percent from 34.9%. U. S. Speaker 300:12:58Segment gross margin increased to 37 point 2% from 35.8%. The improvement is due to lower inbound freight rates and favorable product mix. For international, gross margin decreased 27.2% from 37.1%, most notably from reserves to certain slow moving inventory. U. S. Speaker 300:13:19Segment distribution expenses as a percent of goods shipped from its warehouses, excluding warehouse redesign expenses were 8.7% versus 9.2%. The improvement was attributable to the significant reduction in inventory, which eliminated the need for outside storage and improved operating efficiency. In addition, better safety experience lowered insurance costs and abating inflation due to some other expenses such as for pallets. These reductions more than offset the cost of higher labor rates. International segment distribution as a percent of goods shipped from its warehouses were 19.1% versus 19.6%. Speaker 300:14:03The improvement was due to lower outbound freight rates and more shipments from the Netherlands warehouse. Selling, general and administrative expenses decreased by 4.1 percent to 38,700,000 dollars U. S. Segment expenses decreased by $3,200,000 to $29,100,000 And as a percentage of net sales, expenses decreased to 15.7% from 16.7%. The decrease was attributable to lower allowances for bad debt and a decrease in acquisition related contingent consideration. Speaker 300:14:40International SG and A expenses increased by $700,000 to $4,500,000 As a percentage of net sales, expenses decreased to 25% from 26.7 percent due to the effect of period expenses on higher sales volume. Unallocated corporate expenses increased by $800,000 to $5,100,000 The prior year reflected an expense reduction for performance stock awards not expected to be earned. Interest expense, excluding a mark to increased by $500,000 due to higher interest rates on our variable rate debt, substantially offset by lower average borrowings. The loss of excuse me, the loss on extinguishment of debt was for the write off of unamortized term loan fees due to the loan amendment. For income taxes in both Q4 'twenty three and 'twenty two, the rate exceeded the statutory rate primarily due to state and local tax expense, non deductible expenses and foreign losses for which no benefit is reported. Speaker 300:15:52And related to our 24.7 percent equity interest in Basconia, we recorded our proportional share of its losses. Grupo Basconia is a passive investment for us. Finally, turning to our balance sheet. In November, we amended and extended our term loan. We now have no debt maturities until August 2027. Speaker 300:16:17In connection with the term loan amend and extend, we repaid $48,700,000 of principal And as a reminder, in June of 2023, we repaid $47,200,000 of principal too. Notwithstanding this $97,000,000 reduction in Liquidity includes cash plus availability under our credit facility and receivable purchase agreement. Our adjusted EBITDA to net debt ratio as of year end was 3.4x, a considerable improvement from 4.0x@yearend2022. This concludes our prepared comments. Operator, please open the line for questions. Operator00:17:04Thank you. And our first question comes from Anthony Lebiedzinski with Sidoti and Company. Please state your question. Speaker 400:17:49Good morning and thank you for taking the questions. So first, just a quick follow-up in terms of the Q4 sales. So I know on your last conference call in November, you guys talked about a timing shift for shipments to a certain large warehouse club customer. So was the U. S. Speaker 400:18:16Segment sales hurt was that the primary reason why U. S. Segment sales were down from a year ago was because of this timing shift or was there anything else that happened there? Speaker 200:18:30Yes. So the Q4 came in above our revised guidance, right? If you look at it on a year over year basis, there was a club program which didn't repeat and that's driving year over year performance. The outperformance versus our revised upward guidance that we issued last quarter was not related to the club channel. Speaker 400:18:58Okay, got you. Thanks for that clarification, Rob. So, and then just to follow-up in regards to the overall e commerce strategy. So, you mentioned that it was 23% of your sales in the Q4. Do you have that number for the full year? Speaker 400:19:17And then as you look forward, I mean, do you guys have a goal in mind in terms of how high you want to get this to? And just wondering about the margin profile for that channel versus others? Speaker 200:19:33Yes, Anthony, let me start and then Larry will give you the By the way, 23.2 percent on basis quarter. So we do not have a target number in mind. Our sales philosophy is to sell wherever the consumer is and to maximize those opportunities. So we did reorient in terms of how we spend in our approach, which is why we've been successful across all channels growing and growing our share in each channel. So we tweaked that a little bit about 6 to 8 months ago and it's paying off nicely for us in gaining market share. Speaker 200:20:21So we're trying to maximize the pie in every channel for us, But there's no specific target and part of that is based upon the overall market and again where the consumer is spending, right? So if the consumer spends 50% of their dollars in the e commerce channel, we want to be at least 50%, right? So that will drive it more than what we're experiencing now, which isn't being driven by a shift in the quarter or the last 6 months really towards e commerce in the total market. It's more just Lifetime's approach to that channel, which has been giving us enhanced success. Larry, you want to give full number for the full year now? Speaker 200:21:10Yes. Speaker 300:21:10So, for the full year, e commerce sales increased. 2022 was 18.7% of sales and 2023 full year was 19.3%. Speaker 400:21:24Got you. Yes, thanks for that. Okay, Perfect. And then so as far as the margin profile for e commerce versus others, is that comparable? Speaker 200:21:36Yes, sorry, I forgot to answer that. Yes. Okay, perfect. Yes, again, it is comparable, but there are different channels which have different dynamics. As we talked about, the club channel, which is a very healthy and good channel for us, does usually run at a lower gross margin. Speaker 200:21:56It does have work Speaker 400:21:57on capital Speaker 200:21:57benefits, but again, it's all priced accordingly. But in general, yes, the answer is your question is yes. Speaker 400:22:05Got you. Okay. So I know you're not yet providing guidance. I know typically you do that in May. But as far as just if you could wondering if you guys could provide some additional color. Speaker 400:22:17So as you have your conversations with your top customers, what are you hearing from them in regards to overall demand as far as retail traffic or online traffic? Just what can you share with us as we try to recalibrate our models here after the results? Speaker 200:22:38So, the market seems to be stable and retailers are definitely more comfortable. There's less discounting than you see when they're having trouble so that there isn't discounting that we're seeing in the market. There is healthy dialogue. The industry's big show happens next week. We'll know more after that. Speaker 200:23:09But we are comfortable with the conversations we're having. We don't see there being a downward discussion. Speaker 400:23:24Got you. Okay. And then last question before I turn to others. So you did a nice job with improving your cash flows. It looks like healthy inventory levels as well. Speaker 400:23:37As we look forward, do you think you can further reduce inventories? I know there are some quarterly variations obviously, but I mean, as far as just when you look at managing inventories, do you think there some further improvements you can make or you think this is kind of like the bulk of that has already been realized? Speaker 200:23:59Yes, Anthony, again, just backing up a second. Lifetime's financial profile is a very strong free cash flow. So, we generate very good free cash flow, and we have a very strong balance sheet. In a lot of the macro driven challenges over the last couple of years, including trade issues, ocean freight issues, availability, and COVID related. We made a decision as we were very public about to invest heavy in inventory and we used that to help gain market share, which we've retained, and by investing in more higher inventory levels. Speaker 200:24:44In 20 22 slash 23, when the market wasn't as robust, we in an orderly basis, because as we said, this is always good inventory, we reduced those inventory levels. And again, we point out that our margin maintained or grew. So it wasn't like we were dumping the inventory and it wasn't excess. It was just an investment and we monetize that. That helped us. Speaker 200:25:11As Larry mentioned, it helped us be in a position to repay almost $100,000,000 of term loan in 2023. So just in general, it's very strong. Do we have an ability to further reduce inventory levels from where they are today? We do in our international markets, more so in the U. S. Speaker 200:25:41With the one caveat that the trade, the retails in general, have relied more, which has been beneficial to us, but it relied more on vendors for replenishment inventory and less in their own distribution centers because they're smart and they can push that down to strong people like us. In very robust economic times, that shifts where they want quicker turns into their stores, that we're not in that environment now, in a high growth environment. So that always helps us in terms of inventory turns because it's not in our DCs, it's in theirs. But the big numbers we've taken off of our balance sheet in the U. S, there is still room internationally. Speaker 400:26:34Understood. Well, thank you very much for all that color and best of luck going forward. Speaker 200:26:39Thanks, Anthony. Operator00:26:49Anthony. Our next question comes from Brian McNamara with Canaccord Genuity. Please state your question. Speaker 500:26:57Hey, good morning. Thanks for taking the question guys. So Rob, in November, you mentioned that you did not expect much of a rebound in the U. S. End markets in either Q4 or 2024 as visibility remained pretty poor. Speaker 500:27:10I'm curious if that view has changed at all relative to 4 months ago. Speaker 200:27:18Tough to answer that, Brian. Yes, a little bit. I mean, first, starting with Q4, we exceeded right, we had revised our guidance upwards and we exceeded everyone's expectations, including our own. So the market performed stronger than what we expected, positive, But in terms of our expectations and we view we're fairly on top of our business, it did better than we expected and that's good, obviously. So we're still getting the data points. Speaker 200:27:57We are particularly this year as we launch a whole new channel and a new line, there's a big market share pickup. So that's not end market delivering results. We'll get results from that by newness incremental. There is a little better clarity, but I think that we're still in a market where there is still unknowns in terms of general economy, less so in North America than internationally, but there is an absolute clarity of what we'd see in normal conditions. Speaker 500:28:37That's helpful. It's nice to hear the new product launches for S'well in Q1. I guess, I'm curious your views on the hydration segment overall given the recent Stanley craze and how you intend to position the brand in the market with competitive intensity ramping here? Speaker 200:28:57Yes. STANLEY has been a phenomenon and has gained tremendously. The whole category has grown driven primarily by Stanley and one other participant who's done particularly well, particularly at Walmart. They've been driving that category. Still very good category. Speaker 200:29:18Swell is a phenomenal brand, was needed additional investment from when we bought it, and we have done that. And while it's really a phenomenal brand with great equity, from a product development perspective, we inherited a 0 pipeline and we just need to reinvigorate that. And we have and actually you can see just by going on small.com or one of the e commerce channels, the pure play guys, you'll start to see our products. So, but, you know, Stanley, everyone, including us, has entrance into these keep you very high graded with really, really big bottles, right, which is what STANLEY is. And look, they've done a phenomenal job. Speaker 200:30:07So we are increasing our advertising because STANLEY as a good example has done a tremendous job in social media. We need to get the story out. It's a great brand. We need to reemphasize the story that already people know, particularly with Swell, but also BILT. BILT is a major participation in hydration. Speaker 200:30:26So we're spending more to reinforce our brand equity. We reinvigorated both at Built and Swell product development. You'll see go online, you will already see and you will continue to see that come to market, which we are very enthusiastic about. Speaker 500:30:45Great. That's helpful. I know you're not providing obviously fiscal guidance till May, but is it reasonable to expect top line growth this year? Speaker 200:31:01I mean, wait till May, but one thing just mathematically to look at is we are doing a major launch into a channel with Dollar General has 20,000 stores, right? They'll have 23,000 very shortly. We're So that's going to have an impact. Part of that won't be until 'twenty five, but a decent amount will be in 'twenty four. Speaker 500:31:31Okay. The stock has done quite well since your Q3 earnings. I'm curious what should get investors excited for 2024 and moving forward? And then I'm done. Thanks for it. Speaker 500:31:39Thanks. I appreciate you taking all the questions. Speaker 200:31:42No problem. So, as you know, Brian and other people, management and our key shareholders that are on the board own a lot of this company and we're very committed with our own money in terms of stake in the company, and we're very pleased with the run up of the stock this year. We still think it's tremendously undervalued and just the math and everyone can vote with their own dollars. So we are pleased. We think there is just where we are today is and particularly relatively so. Speaker 200:32:25There's undervalued if you look at the cash flow that we generate and just the math. But we've been turning around our international business. It's got huge potential. There's huge opportunity there. We're starting to see some traction. Speaker 200:32:42Macassa Hospitality, as we grew the business when we relaunched the business, changed management in 2018, We put something together. We streamlined the operation, but we also launched our food service initiative in Macassa Hospitality and that takes time. COVID delayed that, but we've as we've talked about gained real traction in 2023. We'll see real results in 2020 20 annuity business. Once you're Spect on, you're selling that same product for years. Speaker 200:33:21So that will ramp up, and that's something that we are have talked about being excited about. We see that now tormenting and remain very, very excited. There's been some bumps. We haven't lost any market share, but there have been some bumps in 2022 after COVID. The company is very streamlined. Speaker 200:33:47And as we continue to grow, a lot of that falls disproportionately, which is a positive to the bottom line. Very excited about that. We talk we don't overemphasize in terms of the M and A opportunities, but strategics have an advantage for the first time in 20 years and have bought dozens of companies. So we're cautiously optimistic that will translate in opportunities for us. Frankly, if we wanted to be much more aggressive, we'd be buying a lot more businesses today, but we will maintain a very strict financial discipline. Speaker 200:34:27And but we think there's opportunities and hopefully we'll be able to transact. It takes 2 and we're not going to sacrifice our discipline to do that. So there's many different levers that excite us and hopefully excites the public in terms of the ability to continue to create value, let alone just from a cash flow generation basis. We continue to create equity value with the cash flow that we generate even if we did not grow. And of course, we follow these levers. Speaker 200:34:56We think there's ample opportunity for nice growth above market. Speaker 100:35:03Thank Speaker 200:35:05you. Thanks Brian. Operator00:35:09Thank you. There are no further questions at this time. I'll hand the floor back to management for closing remarks. Speaker 200:35:16Thank you, operator. Thank you, everyone, for attending our call. We look forward to issuing our full year guidance as is our custom with our next call. Larry and I remain open for anyone who has questions or comments or want to discuss any aspect with us in the interim. Thank you very much and have a great day. Operator00:35:37This concludes today's call. All parties may disconnect. Have a good day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBCB Bancorp Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Annual report(10-K) BCB Bancorp Earnings HeadlinesBCB Bancorp (NASDAQ:BCBP) investors are sitting on a loss of 41% if they invested three years agoApril 17 at 5:56 AM | finance.yahoo.comBCB Bancorp (BCBP) to Release Earnings on FridayApril 16 at 1:33 AM | americanbankingnews.comReal Americans Don’t Wait on Wall Street’s Next MoveWhat's happening in the markets right now should concern every freedom-loving American who's worked hard and saved smart. Your 401(k) doesn't deserve to be dragged through the mud by tariffs, trade wars, reckless spending, and political standoffs. 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There are 6 speakers on the call. Operator00:00:00Good morning, ladies and gentlemen, and welcome to the Lifetime Brands 4th Quarter and Full Year 2023 Earnings Conference Call. At this time, I would like to inform all participants that their lines will be in a listen only mode. After the speakers' remarks, there will be a question and answer portion of the call. I would now like to introduce your host for today's conference, TJ O'Sullivan. Mr. Operator00:00:31O'Sullivan, you may begin. Speaker 100:00:35Thank you. Good morning and thank you for joining Lifetime Brands' 4th quarter full year 2023 earnings call. With us today from management are Rob Kaye, Chief Executive Officer and Larry Winoker, Chief Financial Officer. Before we begin the call, I'd like to remind you that our remarks this morning may contain forward looking statements that relate to the future performance of the company, and these statements are intended to qualify for the Safe Harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance and factors that could influence our results are highlighted in today's press release and other factors are contained in our filings with the Securities and Exchange Commission. Speaker 100:01:24Such statements are based upon information available to the company as of the date hereof and are subject to change for future developments. Except as required by law, the company does not undertake any obligation to update such statements. Our remarks this morning and in today's press release also contain non GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in such release is a reconciliation of these non GAAP financial measures with the comparable financial measures calculated in accordance with GAAP. With that introduction, I'd like to turn the call over to Rob Kaye. Speaker 100:02:16Please go ahead, Rob. Speaker 200:02:19Thank you, TJ. Good morning, everyone, and thank you for joining us today. We had a strong 4th quarter, delivering results that helped us to meet or exceed net sales, income from operation and adjusted EBITDA targets from the revised full year guidance metrics we provided last quarter as well as analyst estimates. We are pleased with the strong net sales growth we are driving across categories, especially in our e commerce channel, which continues to gain share. When coupled with our continued focus on driving efficiencies across the business, this outperformance translated to meaningful operating income growth that we expect will continue in 2024. Speaker 200:03:11To start, I'd like to walk you through our 4th quarter and full year results at a high level. In the Q4, we delivered $203,100,000 in net sales and $21,500,000 in adjusted EBITDA compared to $207,000,000 in net sales and $19,700,000 in adjusted EBITDA in the prior year period. For the full year, we generated $57,300,000 in adjusted EBITDA compared to $58,200,000 in 2022, coming in ahead of our internal estimates, thanks to diligent expense management and a focus on incremental revenue opportunities throughout the year. Of note, our performance was notwithstanding $3,600,000 of one time charges in 2023. We have been encouraged by the improving supply chain environment in recent quarters and experienced no disruptions in the Q4. Speaker 200:04:16Though we are monitoring potential issues stemming from ongoing geopolitical challenges in the Red Sea, which have had some initial impact on ocean freight costs and shipping times. Further, with another quarter of normalized shipment and ordering activities now behind us, we believe that the oversupply issues our retails experience coming out of the pandemic have dissipated. Turning now to our international business. Throughout 2023, we remain diligent in the execution of our international turnaround strategy, and we are pleased with the meaningful progress we have made, including market share gains in these end markets. In Australia and New Zealand, the direct go to market strategy we implemented earlier this year is translating to increased listings with additional accounts, products and brand listings. Speaker 200:05:21Additionally, we continue to drive incremental revenue opportunities as we roll out new product lines into our international markets driven by our highly successful KitchenAid offering. As a result of these factors, in the Q4, we saw the 1st turnaround in year over year international revenues since 2021. As part of our international turnaround plan, we took a non cash inventory write off in the 4th quarter, which impacted our bottom line performance. But we expect that the aforementioned initiatives will have a meaningful impact on our In our foodservice business, we remain on track to achieve significant growth in 2024 as Macassa Hospitality continues to gain traction and capitalize on the market positioning achieved in 2023. While this business is still in its early stages, we are confident that Lifetime is now recognized as an important participant in the foodservice industry and will continue to expand its product placement across North America. Speaker 200:06:41We maintain our long term view that we can grow our total foodservice business to $60,000,000 in revenues by 2026. Refining and building out our e commerce strategy remains a key strategic priority for Lifetime. This quarter, e commerce net sales exceeded 23% of our total net sales for the quarter, contributing meaningfully to our overall outperformance. This represents an increase of nearly 3.5% from the comparable quarter a year ago when our e commerce net sales were slightly below 20%. We are continuing to hone our online strategy to ensure we are best positioned to capitalize on the significant opportunities we see in the channel. Speaker 200:07:38We maintain a strong focus on new product development and channel expansion to bolster our market position. Looking ahead, we are excited about our robust new product pipeline, many of which are incremental revenue opportunities. Production of our previously announced Dolly Parton branded products is well underway with shipments on track to begin in April and the majority of products slated for the second half of the year. This launch is across 4 different product categories, all in the dollar channel, which is a new channel for Lifetime. We are also reinvigorating our robust pipeline of S'well products with new items being launched in the Q1 of 2024. Speaker 200:08:28These will initially be available online on swell.com as well as across e commerce channels. In line with our commitment to reduce our exposure to supply chain issues in China, we continue to ramp up production capacity in our Mexico facility. With the facility now operational and on track to reach full capacity in 2024 And combined with other sourcing initiatives, we are well on our way to meeting our previously stated target of approximately 25% of our spend on goods being outside of China by the end of the year. Active balance sheet management remains a priority for us and we are pleased with our financial position as we enter 2024. Our disciplined cash management throughout 2023 led to a noticeable improvement in working capital year over year in both our U. Speaker 200:09:30S. And international businesses, which Larry will discuss in further detail shortly. We remain prudent in our approach to capital allocation and are open minded to value enhancing M and A opportunities that align with our strategic priorities. We will continue to evaluate opportunities as they arise, especially in the current market which favors strategic buyers. In summary, we are pleased with the strong momentum across our business as we close out 20 23. Speaker 200:10:07The significant work we have done over the past several years to transform and reposition our business is paying off and we are entering 2024 as a more focused agile company. Looking ahead, we are excited by the meaningful work already underway across our organization to continue innovating new products, expanding into new channels and growing market share, generating significant value for our shareholders. With that, I'll now turn the call over to Larry. Speaker 300:10:43Thanks, Rob. As we reported this morning, net income for the Q4 of 2023 was $2,700,000 or $0.13 per diluted share versus $3,300,000 or $0.15 per diluted share in the Q4 of 2022. Adjusted net income was $6,300,000 for the Q4 of 2023 or $0.29 per diluted share as compared to $7,500,000 or $0.35 per diluted share in 2022. Income from operations was $15,700,000 for the 4th quarter of 'twenty three as compared to $12,800,000 in the 2022 period. Adjusted income from operations for Q4 of 'twenty three was $19,400,000 compared to $18,200,000 in the 2022 period. Speaker 300:11:31And adjusted EBITDA for the full year 2023 was $57,300,000 Adjusted net income, adjusted income from operations and adjusted EBITDA are non GAAP measures, which are reconciled to our GAAP financial measures in the earnings release. Following comments are for the Q4 of 20232022, unless stated otherwise. Consolidated sales declined by 1.9%. U. S. Speaker 300:11:57Segment sales decreased by 4% to 185 point $2,000,000 The decrease occurred in the tableware and home solutions categories. Tableware was lower as most of its warehouse programs shipped during the 1st 9 months of the year, and Home Solutions decline was due to lower hydration products in the corporate sales channel. The decrease was partially offset by strong sales in the kitchenware category. International segment sales increased by 3,800,000 dollars or $2,900,000 in constant U. S. Speaker 300:12:30Dollars to $17,900,000 As Rob discussed, in the Q4, international had its 1st upturn in sales since the Q4 of 2021. The increase was attributable to higher e commerce sales and market share gains from the launch of the go to market strategy and an increase in Asia sales too. Gross margin increased to 36.4 percent from 34.9%. U. S. Speaker 300:12:58Segment gross margin increased to 37 point 2% from 35.8%. The improvement is due to lower inbound freight rates and favorable product mix. For international, gross margin decreased 27.2% from 37.1%, most notably from reserves to certain slow moving inventory. U. S. Speaker 300:13:19Segment distribution expenses as a percent of goods shipped from its warehouses, excluding warehouse redesign expenses were 8.7% versus 9.2%. The improvement was attributable to the significant reduction in inventory, which eliminated the need for outside storage and improved operating efficiency. In addition, better safety experience lowered insurance costs and abating inflation due to some other expenses such as for pallets. These reductions more than offset the cost of higher labor rates. International segment distribution as a percent of goods shipped from its warehouses were 19.1% versus 19.6%. Speaker 300:14:03The improvement was due to lower outbound freight rates and more shipments from the Netherlands warehouse. Selling, general and administrative expenses decreased by 4.1 percent to 38,700,000 dollars U. S. Segment expenses decreased by $3,200,000 to $29,100,000 And as a percentage of net sales, expenses decreased to 15.7% from 16.7%. The decrease was attributable to lower allowances for bad debt and a decrease in acquisition related contingent consideration. Speaker 300:14:40International SG and A expenses increased by $700,000 to $4,500,000 As a percentage of net sales, expenses decreased to 25% from 26.7 percent due to the effect of period expenses on higher sales volume. Unallocated corporate expenses increased by $800,000 to $5,100,000 The prior year reflected an expense reduction for performance stock awards not expected to be earned. Interest expense, excluding a mark to increased by $500,000 due to higher interest rates on our variable rate debt, substantially offset by lower average borrowings. The loss of excuse me, the loss on extinguishment of debt was for the write off of unamortized term loan fees due to the loan amendment. For income taxes in both Q4 'twenty three and 'twenty two, the rate exceeded the statutory rate primarily due to state and local tax expense, non deductible expenses and foreign losses for which no benefit is reported. Speaker 300:15:52And related to our 24.7 percent equity interest in Basconia, we recorded our proportional share of its losses. Grupo Basconia is a passive investment for us. Finally, turning to our balance sheet. In November, we amended and extended our term loan. We now have no debt maturities until August 2027. Speaker 300:16:17In connection with the term loan amend and extend, we repaid $48,700,000 of principal And as a reminder, in June of 2023, we repaid $47,200,000 of principal too. Notwithstanding this $97,000,000 reduction in Liquidity includes cash plus availability under our credit facility and receivable purchase agreement. Our adjusted EBITDA to net debt ratio as of year end was 3.4x, a considerable improvement from 4.0x@yearend2022. This concludes our prepared comments. Operator, please open the line for questions. Operator00:17:04Thank you. And our first question comes from Anthony Lebiedzinski with Sidoti and Company. Please state your question. Speaker 400:17:49Good morning and thank you for taking the questions. So first, just a quick follow-up in terms of the Q4 sales. So I know on your last conference call in November, you guys talked about a timing shift for shipments to a certain large warehouse club customer. So was the U. S. Speaker 400:18:16Segment sales hurt was that the primary reason why U. S. Segment sales were down from a year ago was because of this timing shift or was there anything else that happened there? Speaker 200:18:30Yes. So the Q4 came in above our revised guidance, right? If you look at it on a year over year basis, there was a club program which didn't repeat and that's driving year over year performance. The outperformance versus our revised upward guidance that we issued last quarter was not related to the club channel. Speaker 400:18:58Okay, got you. Thanks for that clarification, Rob. So, and then just to follow-up in regards to the overall e commerce strategy. So, you mentioned that it was 23% of your sales in the Q4. Do you have that number for the full year? Speaker 400:19:17And then as you look forward, I mean, do you guys have a goal in mind in terms of how high you want to get this to? And just wondering about the margin profile for that channel versus others? Speaker 200:19:33Yes, Anthony, let me start and then Larry will give you the By the way, 23.2 percent on basis quarter. So we do not have a target number in mind. Our sales philosophy is to sell wherever the consumer is and to maximize those opportunities. So we did reorient in terms of how we spend in our approach, which is why we've been successful across all channels growing and growing our share in each channel. So we tweaked that a little bit about 6 to 8 months ago and it's paying off nicely for us in gaining market share. Speaker 200:20:21So we're trying to maximize the pie in every channel for us, But there's no specific target and part of that is based upon the overall market and again where the consumer is spending, right? So if the consumer spends 50% of their dollars in the e commerce channel, we want to be at least 50%, right? So that will drive it more than what we're experiencing now, which isn't being driven by a shift in the quarter or the last 6 months really towards e commerce in the total market. It's more just Lifetime's approach to that channel, which has been giving us enhanced success. Larry, you want to give full number for the full year now? Speaker 200:21:10Yes. Speaker 300:21:10So, for the full year, e commerce sales increased. 2022 was 18.7% of sales and 2023 full year was 19.3%. Speaker 400:21:24Got you. Yes, thanks for that. Okay, Perfect. And then so as far as the margin profile for e commerce versus others, is that comparable? Speaker 200:21:36Yes, sorry, I forgot to answer that. Yes. Okay, perfect. Yes, again, it is comparable, but there are different channels which have different dynamics. As we talked about, the club channel, which is a very healthy and good channel for us, does usually run at a lower gross margin. Speaker 200:21:56It does have work Speaker 400:21:57on capital Speaker 200:21:57benefits, but again, it's all priced accordingly. But in general, yes, the answer is your question is yes. Speaker 400:22:05Got you. Okay. So I know you're not yet providing guidance. I know typically you do that in May. But as far as just if you could wondering if you guys could provide some additional color. Speaker 400:22:17So as you have your conversations with your top customers, what are you hearing from them in regards to overall demand as far as retail traffic or online traffic? Just what can you share with us as we try to recalibrate our models here after the results? Speaker 200:22:38So, the market seems to be stable and retailers are definitely more comfortable. There's less discounting than you see when they're having trouble so that there isn't discounting that we're seeing in the market. There is healthy dialogue. The industry's big show happens next week. We'll know more after that. Speaker 200:23:09But we are comfortable with the conversations we're having. We don't see there being a downward discussion. Speaker 400:23:24Got you. Okay. And then last question before I turn to others. So you did a nice job with improving your cash flows. It looks like healthy inventory levels as well. Speaker 400:23:37As we look forward, do you think you can further reduce inventories? I know there are some quarterly variations obviously, but I mean, as far as just when you look at managing inventories, do you think there some further improvements you can make or you think this is kind of like the bulk of that has already been realized? Speaker 200:23:59Yes, Anthony, again, just backing up a second. Lifetime's financial profile is a very strong free cash flow. So, we generate very good free cash flow, and we have a very strong balance sheet. In a lot of the macro driven challenges over the last couple of years, including trade issues, ocean freight issues, availability, and COVID related. We made a decision as we were very public about to invest heavy in inventory and we used that to help gain market share, which we've retained, and by investing in more higher inventory levels. Speaker 200:24:44In 20 22 slash 23, when the market wasn't as robust, we in an orderly basis, because as we said, this is always good inventory, we reduced those inventory levels. And again, we point out that our margin maintained or grew. So it wasn't like we were dumping the inventory and it wasn't excess. It was just an investment and we monetize that. That helped us. Speaker 200:25:11As Larry mentioned, it helped us be in a position to repay almost $100,000,000 of term loan in 2023. So just in general, it's very strong. Do we have an ability to further reduce inventory levels from where they are today? We do in our international markets, more so in the U. S. Speaker 200:25:41With the one caveat that the trade, the retails in general, have relied more, which has been beneficial to us, but it relied more on vendors for replenishment inventory and less in their own distribution centers because they're smart and they can push that down to strong people like us. In very robust economic times, that shifts where they want quicker turns into their stores, that we're not in that environment now, in a high growth environment. So that always helps us in terms of inventory turns because it's not in our DCs, it's in theirs. But the big numbers we've taken off of our balance sheet in the U. S, there is still room internationally. Speaker 400:26:34Understood. Well, thank you very much for all that color and best of luck going forward. Speaker 200:26:39Thanks, Anthony. Operator00:26:49Anthony. Our next question comes from Brian McNamara with Canaccord Genuity. Please state your question. Speaker 500:26:57Hey, good morning. Thanks for taking the question guys. So Rob, in November, you mentioned that you did not expect much of a rebound in the U. S. End markets in either Q4 or 2024 as visibility remained pretty poor. Speaker 500:27:10I'm curious if that view has changed at all relative to 4 months ago. Speaker 200:27:18Tough to answer that, Brian. Yes, a little bit. I mean, first, starting with Q4, we exceeded right, we had revised our guidance upwards and we exceeded everyone's expectations, including our own. So the market performed stronger than what we expected, positive, But in terms of our expectations and we view we're fairly on top of our business, it did better than we expected and that's good, obviously. So we're still getting the data points. Speaker 200:27:57We are particularly this year as we launch a whole new channel and a new line, there's a big market share pickup. So that's not end market delivering results. We'll get results from that by newness incremental. There is a little better clarity, but I think that we're still in a market where there is still unknowns in terms of general economy, less so in North America than internationally, but there is an absolute clarity of what we'd see in normal conditions. Speaker 500:28:37That's helpful. It's nice to hear the new product launches for S'well in Q1. I guess, I'm curious your views on the hydration segment overall given the recent Stanley craze and how you intend to position the brand in the market with competitive intensity ramping here? Speaker 200:28:57Yes. STANLEY has been a phenomenon and has gained tremendously. The whole category has grown driven primarily by Stanley and one other participant who's done particularly well, particularly at Walmart. They've been driving that category. Still very good category. Speaker 200:29:18Swell is a phenomenal brand, was needed additional investment from when we bought it, and we have done that. And while it's really a phenomenal brand with great equity, from a product development perspective, we inherited a 0 pipeline and we just need to reinvigorate that. And we have and actually you can see just by going on small.com or one of the e commerce channels, the pure play guys, you'll start to see our products. So, but, you know, Stanley, everyone, including us, has entrance into these keep you very high graded with really, really big bottles, right, which is what STANLEY is. And look, they've done a phenomenal job. Speaker 200:30:07So we are increasing our advertising because STANLEY as a good example has done a tremendous job in social media. We need to get the story out. It's a great brand. We need to reemphasize the story that already people know, particularly with Swell, but also BILT. BILT is a major participation in hydration. Speaker 200:30:26So we're spending more to reinforce our brand equity. We reinvigorated both at Built and Swell product development. You'll see go online, you will already see and you will continue to see that come to market, which we are very enthusiastic about. Speaker 500:30:45Great. That's helpful. I know you're not providing obviously fiscal guidance till May, but is it reasonable to expect top line growth this year? Speaker 200:31:01I mean, wait till May, but one thing just mathematically to look at is we are doing a major launch into a channel with Dollar General has 20,000 stores, right? They'll have 23,000 very shortly. We're So that's going to have an impact. Part of that won't be until 'twenty five, but a decent amount will be in 'twenty four. Speaker 500:31:31Okay. The stock has done quite well since your Q3 earnings. I'm curious what should get investors excited for 2024 and moving forward? And then I'm done. Thanks for it. Speaker 500:31:39Thanks. I appreciate you taking all the questions. Speaker 200:31:42No problem. So, as you know, Brian and other people, management and our key shareholders that are on the board own a lot of this company and we're very committed with our own money in terms of stake in the company, and we're very pleased with the run up of the stock this year. We still think it's tremendously undervalued and just the math and everyone can vote with their own dollars. So we are pleased. We think there is just where we are today is and particularly relatively so. Speaker 200:32:25There's undervalued if you look at the cash flow that we generate and just the math. But we've been turning around our international business. It's got huge potential. There's huge opportunity there. We're starting to see some traction. Speaker 200:32:42Macassa Hospitality, as we grew the business when we relaunched the business, changed management in 2018, We put something together. We streamlined the operation, but we also launched our food service initiative in Macassa Hospitality and that takes time. COVID delayed that, but we've as we've talked about gained real traction in 2023. We'll see real results in 2020 20 annuity business. Once you're Spect on, you're selling that same product for years. Speaker 200:33:21So that will ramp up, and that's something that we are have talked about being excited about. We see that now tormenting and remain very, very excited. There's been some bumps. We haven't lost any market share, but there have been some bumps in 2022 after COVID. The company is very streamlined. Speaker 200:33:47And as we continue to grow, a lot of that falls disproportionately, which is a positive to the bottom line. Very excited about that. We talk we don't overemphasize in terms of the M and A opportunities, but strategics have an advantage for the first time in 20 years and have bought dozens of companies. So we're cautiously optimistic that will translate in opportunities for us. Frankly, if we wanted to be much more aggressive, we'd be buying a lot more businesses today, but we will maintain a very strict financial discipline. Speaker 200:34:27And but we think there's opportunities and hopefully we'll be able to transact. It takes 2 and we're not going to sacrifice our discipline to do that. So there's many different levers that excite us and hopefully excites the public in terms of the ability to continue to create value, let alone just from a cash flow generation basis. We continue to create equity value with the cash flow that we generate even if we did not grow. And of course, we follow these levers. Speaker 200:34:56We think there's ample opportunity for nice growth above market. Speaker 100:35:03Thank Speaker 200:35:05you. Thanks Brian. Operator00:35:09Thank you. There are no further questions at this time. I'll hand the floor back to management for closing remarks. Speaker 200:35:16Thank you, operator. Thank you, everyone, for attending our call. We look forward to issuing our full year guidance as is our custom with our next call. Larry and I remain open for anyone who has questions or comments or want to discuss any aspect with us in the interim. Thank you very much and have a great day. Operator00:35:37This concludes today's call. All parties may disconnect. Have a good day.Read morePowered by