Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CORRECTING and REPLACING Scott’s Liquid Gold-Inc. Reports Second Quarter Results By: Scott’s Liquid Gold-Inc. via Business Wire August 15, 2022 at 06:00 AM EDT Second Quarter 2022 Highlights: Second quarter 2022 net sales of $5.4 million vs. $7.8 million in 2021, including $6.5 million of same brand net sales* in 2021 Net loss of $4.3 million in Q2 2022 vs. $1.1 million in 2021 Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021 Generated operating cash flow of $0.5 million In the press release dated August 12, 2022, Scott’s Liquid Gold-Inc. did not provide additional information and reconciliations related to non-GAAP financial measures. Please replace the release with the following corrected version. The updated release reads: SCOTT’S LIQUID GOLD-INC. REPORTS SECOND QUARTER RESULTS Second Quarter 2022 Highlights: Second quarter 2022 net sales of $5.4 million vs. $7.8 million in 2021, including $6.5 million of same brand net sales* in 2021 Net loss of $4.3 million in Q2 2022 vs. $1.1 million in 2021 Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021 Generated operating cash flow of $0.5 million Scott’s Liquid Gold-Inc. (OTC: SLGD) today announced results for the three months ended June 30, 2022. Second Quarter Financial Results In the second quarter of 2022, net sales decreased primarily due to the sale of the Dryel brand and the conclusion of our agreement to distribute Batiste products. BIZ sales declined due to continued supply chain disruptions related to our powder booster products. Sales of our Alpha Skin Care products destined for the China market decreased, and subsequent to quarter-end we terminated our relationship with our exclusive distributor in China and commenced a new go-to-market strategy in that region. Our net loss of $4.3 million was primarily driven by the $3.6 million impairment of goodwill and intangible assets related to our Kids N Pets and Messy Pet product lines. Despite the decreased sales levels compared to a year ago, our adjusted loss from operations* remained consistent between the second quarter of 2022 versus the same period in 2021 due to various improvements to our cost structure. Management Commentary "Despite a challenging operating environment, we remain committed to maximizing our value proposition for consumers across our entire portfolio of brands,” said Tisha Pedrazzini, President of Scott’s. “We have reduced overhead and continue to optimize and simplify our production and logistics networks. While inflation and supply chain shortages in select products continue to be a headwind, we continue to pursue marketing strategies that drive conversion while reducing expenditures and providing our customers the value that they have come to count on from Scott’s.” *Indicates a non-GAAP financial measure. Please refer to “Exhibit 1 – Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and a reconciliation of these non-GAAP financial measures to the related GAAP measures. SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per share data) Three months ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net sales $ 5,383 $ 7,769 $ 11,172 $ 16,613 Cost of sales 3,108 4,662 5,978 9,525 Gross profit 2,275 3,107 5,194 7,088 Operating expenses: Advertising 174 203 326 362 Selling 1,844 2,392 4,061 4,801 General and administrative 698 1,687 1,444 2,972 Intangible asset amortization 121 264 226 529 Impairment of goodwill and intangible assets 3,589 - 3,589 - Total operating expenses 6,426 4,546 9,646 8,664 Loss from operations (4,151 ) (1,439 ) (4,452 ) (1,576 ) Interest expense (130 ) (76 ) (280 ) (110 ) Loss before income taxes and discontinued operations (4,281 ) (1,515 ) (4,732 ) (1,686 ) Income tax (expense) benefit (52 ) 400 (52 ) 445 Loss from continuing operations (4,333 ) (1,115 ) (4,784 ) (1,241 ) Income (loss) from discontinued operations, net of taxes - 49 - (105 ) Net loss $ (4,333 ) $ (1,066 ) $ (4,784 ) $ (1,346 ) Basic and diluted net loss per common shares: Loss from continuing operations $ (0.34 ) $ (0.08 ) $ (0.38 ) $ (0.10 ) Loss from discontinued operations $ - $ - $ - $ (0.01 ) Net loss $ (0.34 ) $ (0.08 ) $ (0.38 ) $ (0.11 ) Weighted average shares outstanding: Basic and diluted 12,749 12,618 12,745 12,618 SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Balance Sheets (in thousands, except par value amounts) June 30, December 31, 2022 2021 Assets Current assets: Cash $ 66 $ 770 Restricted cash 250 500 Accounts receivable, net 1,693 3,516 Inventories 5,842 5,677 Income taxes receivable 275 320 Prepaid expenses 293 436 Total current assets 8,419 11,219 Property and equipment, net 4 7 Goodwill 838 1,710 Intangible assets, net 2,359 5,160 Operating lease right-of-use assets 2,614 2,735 Other assets 38 38 Total assets $ 14,272 $ 20,869 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 2,161 $ 2,647 Accrued expenses 626 747 Current portion of long-term debt 180 1,000 Operating lease liabilities, current portion 259 251 Total current liabilities 3,226 4,645 Long-term debt, net of current portion and debt issuance costs 1,528 1,876 Operating lease liabilities, net of current 2,649 2,780 Other liabilities 27 27 Total liabilities 7,430 9,328 Shareholders’ equity: Preferred Stock, no par value, authorized 20,000 shares; no shares issued and outstanding - - Common Stock; $0.10 par value, authorized 50,000 shares; issued and outstanding 12,749 shares (2022) and 12,727 shares (2021) 1,275 1,273 Capital in excess of par 7,872 7,789 (Accumulated deficit) retained earnings (2,305 ) 2,479 Total shareholders’ equity 6,842 11,541 Total liabilities and shareholders’ equity $ 14,272 $ 20,869 SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) Six Months Ended June 30, 2022 2021 Cash flows from operating activities: Net loss $ (4,784 ) $ (1,346 ) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 339 905 Stock-based compensation 85 102 Deferred income taxes - (503 ) Impairment of goodwill and intangible assets 3,589 - Change in operating assets and liabilities: Accounts receivable 1,823 (211 ) Inventories (165 ) (2,782 ) Prepaid expenses and other assets 143 166 Income taxes receivable 45 22 Accounts payable, accrued expenses, and other liabilities (609 ) 2,942 Total adjustments to net loss 5,250 641 Net cash provided by (used in) operating activities 466 (705 ) Cash flows from investing activities: Purchase of software (142 ) (113 ) Net cash used in investing activities (142 ) (113 ) Cash flows from financing activities: Repayments on term loans (2,000 ) (500 ) Proceeds from revolving credit facility 14,737 19,517 Repayments of revolving credit facility (14,015 ) (18,184 ) Net cash (used in) provided by financing activities (1,278 ) 833 Net (decrease) increase in cash and restricted cash (954 ) 15 Cash and restricted cash, beginning of period 1,270 5 Cash and restricted cash, end of period $ 316 $ 20 Supplemental disclosures: Cash paid during the period for interest $ 170 $ 212 Exhibit 1 – Non-GAAP Financial Measures The following provides definitions and other information regarding the non-GAAP financial measures used in this press release which may not be the same as or comparable to similar measures presented by other companies: Same brand net sales: Measure of net sales excluding impacts of acquisitions, divestitures, and changes in distributor relationships from year over year comparisons. For the three months ended June 30, 2021, these sales exclude $1.2 million of net sales associated with the Batiste brand we no longer distribute and are summarized under the line item of ‘Excluded net sales’ in the table below for each period presented. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales dollars on a consistent basis. Adjusted loss from operations: Loss from operations excluding the impact of certain costs that are not expected to be incurred on an ongoing basis in future operating periods. For the three months ended June 30, 2022, the costs excluded were impairment of goodwill and intangible assets of $3.6 million. For the three months ended June 30, 2021, the costs excluded were restructuring costs associated with separation of employees of $0.8 million. These items are summarized under the line item ‘Excluded costs’ in the table below for each period presented. Management believes this non-GAAP measure provides a supplemental perspective to the Company's operating efficiency over time. We use these financial measures internally to evaluate segment and overall operating performance. While we believe that these financial measures are useful in evaluating our underlying business performance and trends, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Non-GAAP Reconciliations For the Three Months Ended June 30, 2022 and 2021 (in thousands) (Unaudited) 2022 2021 Same brand net sales Net sales, GAAP $ 5,383 $ 7,769 Excluded net sales - (1,229 ) Same brand net sales, non-GAAP $ 5,383 $ 6,540 2022 2021 Adjusted loss from operations Loss from operations, GAAP $ (4,151 ) $ (1,439 ) Excluded costs 3,589 805 Adjusted loss from operations, non-GAAP $ (562 ) $ (634 ) Note Regarding Forward-Looking Statements This news release may contain "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "assumptions," "target," "guidance," “strategy,” "outlook," "plans," "projection," "may," "will," "would," "expect," "intend," "estimate," "anticipate," "believe”, "potential," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology. Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and the Company's subsequent Quarterly Reports on Form 10-Q and other periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent filings with the Securities and Exchange Commission. About Scott’s Liquid Gold-Inc. Scott’s Liquid Gold-Inc. (SLG-Inc.) is a leading manufacturer and marketer of consumer products sold nationally and internationally to retail channels over the last 70 years. SLG-Inc. markets and distributes some of the most trusted and recognized consumer brand names, including its namesake wood cleaning products; Alpha Skin Care®; Kids N Pets®; Messy Pet®; BIZ®; Denorex®; Prell® and other brands. View source version on businesswire.com: https://www.businesswire.com/news/home/20220812005075/en/Contacts Investor Relations Contact: David Arndt Chief Financial Officer 303.576.6027 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CORRECTING and REPLACING Scott’s Liquid Gold-Inc. Reports Second Quarter Results By: Scott’s Liquid Gold-Inc. via Business Wire August 15, 2022 at 06:00 AM EDT Second Quarter 2022 Highlights: Second quarter 2022 net sales of $5.4 million vs. $7.8 million in 2021, including $6.5 million of same brand net sales* in 2021 Net loss of $4.3 million in Q2 2022 vs. $1.1 million in 2021 Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021 Generated operating cash flow of $0.5 million In the press release dated August 12, 2022, Scott’s Liquid Gold-Inc. did not provide additional information and reconciliations related to non-GAAP financial measures. Please replace the release with the following corrected version. The updated release reads: SCOTT’S LIQUID GOLD-INC. REPORTS SECOND QUARTER RESULTS Second Quarter 2022 Highlights: Second quarter 2022 net sales of $5.4 million vs. $7.8 million in 2021, including $6.5 million of same brand net sales* in 2021 Net loss of $4.3 million in Q2 2022 vs. $1.1 million in 2021 Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021 Generated operating cash flow of $0.5 million Scott’s Liquid Gold-Inc. (OTC: SLGD) today announced results for the three months ended June 30, 2022. Second Quarter Financial Results In the second quarter of 2022, net sales decreased primarily due to the sale of the Dryel brand and the conclusion of our agreement to distribute Batiste products. BIZ sales declined due to continued supply chain disruptions related to our powder booster products. Sales of our Alpha Skin Care products destined for the China market decreased, and subsequent to quarter-end we terminated our relationship with our exclusive distributor in China and commenced a new go-to-market strategy in that region. Our net loss of $4.3 million was primarily driven by the $3.6 million impairment of goodwill and intangible assets related to our Kids N Pets and Messy Pet product lines. Despite the decreased sales levels compared to a year ago, our adjusted loss from operations* remained consistent between the second quarter of 2022 versus the same period in 2021 due to various improvements to our cost structure. Management Commentary "Despite a challenging operating environment, we remain committed to maximizing our value proposition for consumers across our entire portfolio of brands,” said Tisha Pedrazzini, President of Scott’s. “We have reduced overhead and continue to optimize and simplify our production and logistics networks. While inflation and supply chain shortages in select products continue to be a headwind, we continue to pursue marketing strategies that drive conversion while reducing expenditures and providing our customers the value that they have come to count on from Scott’s.” *Indicates a non-GAAP financial measure. Please refer to “Exhibit 1 – Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and a reconciliation of these non-GAAP financial measures to the related GAAP measures. SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per share data) Three months ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net sales $ 5,383 $ 7,769 $ 11,172 $ 16,613 Cost of sales 3,108 4,662 5,978 9,525 Gross profit 2,275 3,107 5,194 7,088 Operating expenses: Advertising 174 203 326 362 Selling 1,844 2,392 4,061 4,801 General and administrative 698 1,687 1,444 2,972 Intangible asset amortization 121 264 226 529 Impairment of goodwill and intangible assets 3,589 - 3,589 - Total operating expenses 6,426 4,546 9,646 8,664 Loss from operations (4,151 ) (1,439 ) (4,452 ) (1,576 ) Interest expense (130 ) (76 ) (280 ) (110 ) Loss before income taxes and discontinued operations (4,281 ) (1,515 ) (4,732 ) (1,686 ) Income tax (expense) benefit (52 ) 400 (52 ) 445 Loss from continuing operations (4,333 ) (1,115 ) (4,784 ) (1,241 ) Income (loss) from discontinued operations, net of taxes - 49 - (105 ) Net loss $ (4,333 ) $ (1,066 ) $ (4,784 ) $ (1,346 ) Basic and diluted net loss per common shares: Loss from continuing operations $ (0.34 ) $ (0.08 ) $ (0.38 ) $ (0.10 ) Loss from discontinued operations $ - $ - $ - $ (0.01 ) Net loss $ (0.34 ) $ (0.08 ) $ (0.38 ) $ (0.11 ) Weighted average shares outstanding: Basic and diluted 12,749 12,618 12,745 12,618 SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Balance Sheets (in thousands, except par value amounts) June 30, December 31, 2022 2021 Assets Current assets: Cash $ 66 $ 770 Restricted cash 250 500 Accounts receivable, net 1,693 3,516 Inventories 5,842 5,677 Income taxes receivable 275 320 Prepaid expenses 293 436 Total current assets 8,419 11,219 Property and equipment, net 4 7 Goodwill 838 1,710 Intangible assets, net 2,359 5,160 Operating lease right-of-use assets 2,614 2,735 Other assets 38 38 Total assets $ 14,272 $ 20,869 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 2,161 $ 2,647 Accrued expenses 626 747 Current portion of long-term debt 180 1,000 Operating lease liabilities, current portion 259 251 Total current liabilities 3,226 4,645 Long-term debt, net of current portion and debt issuance costs 1,528 1,876 Operating lease liabilities, net of current 2,649 2,780 Other liabilities 27 27 Total liabilities 7,430 9,328 Shareholders’ equity: Preferred Stock, no par value, authorized 20,000 shares; no shares issued and outstanding - - Common Stock; $0.10 par value, authorized 50,000 shares; issued and outstanding 12,749 shares (2022) and 12,727 shares (2021) 1,275 1,273 Capital in excess of par 7,872 7,789 (Accumulated deficit) retained earnings (2,305 ) 2,479 Total shareholders’ equity 6,842 11,541 Total liabilities and shareholders’ equity $ 14,272 $ 20,869 SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) Six Months Ended June 30, 2022 2021 Cash flows from operating activities: Net loss $ (4,784 ) $ (1,346 ) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 339 905 Stock-based compensation 85 102 Deferred income taxes - (503 ) Impairment of goodwill and intangible assets 3,589 - Change in operating assets and liabilities: Accounts receivable 1,823 (211 ) Inventories (165 ) (2,782 ) Prepaid expenses and other assets 143 166 Income taxes receivable 45 22 Accounts payable, accrued expenses, and other liabilities (609 ) 2,942 Total adjustments to net loss 5,250 641 Net cash provided by (used in) operating activities 466 (705 ) Cash flows from investing activities: Purchase of software (142 ) (113 ) Net cash used in investing activities (142 ) (113 ) Cash flows from financing activities: Repayments on term loans (2,000 ) (500 ) Proceeds from revolving credit facility 14,737 19,517 Repayments of revolving credit facility (14,015 ) (18,184 ) Net cash (used in) provided by financing activities (1,278 ) 833 Net (decrease) increase in cash and restricted cash (954 ) 15 Cash and restricted cash, beginning of period 1,270 5 Cash and restricted cash, end of period $ 316 $ 20 Supplemental disclosures: Cash paid during the period for interest $ 170 $ 212 Exhibit 1 – Non-GAAP Financial Measures The following provides definitions and other information regarding the non-GAAP financial measures used in this press release which may not be the same as or comparable to similar measures presented by other companies: Same brand net sales: Measure of net sales excluding impacts of acquisitions, divestitures, and changes in distributor relationships from year over year comparisons. For the three months ended June 30, 2021, these sales exclude $1.2 million of net sales associated with the Batiste brand we no longer distribute and are summarized under the line item of ‘Excluded net sales’ in the table below for each period presented. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales dollars on a consistent basis. Adjusted loss from operations: Loss from operations excluding the impact of certain costs that are not expected to be incurred on an ongoing basis in future operating periods. For the three months ended June 30, 2022, the costs excluded were impairment of goodwill and intangible assets of $3.6 million. For the three months ended June 30, 2021, the costs excluded were restructuring costs associated with separation of employees of $0.8 million. These items are summarized under the line item ‘Excluded costs’ in the table below for each period presented. Management believes this non-GAAP measure provides a supplemental perspective to the Company's operating efficiency over time. We use these financial measures internally to evaluate segment and overall operating performance. While we believe that these financial measures are useful in evaluating our underlying business performance and trends, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Non-GAAP Reconciliations For the Three Months Ended June 30, 2022 and 2021 (in thousands) (Unaudited) 2022 2021 Same brand net sales Net sales, GAAP $ 5,383 $ 7,769 Excluded net sales - (1,229 ) Same brand net sales, non-GAAP $ 5,383 $ 6,540 2022 2021 Adjusted loss from operations Loss from operations, GAAP $ (4,151 ) $ (1,439 ) Excluded costs 3,589 805 Adjusted loss from operations, non-GAAP $ (562 ) $ (634 ) Note Regarding Forward-Looking Statements This news release may contain "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "assumptions," "target," "guidance," “strategy,” "outlook," "plans," "projection," "may," "will," "would," "expect," "intend," "estimate," "anticipate," "believe”, "potential," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology. Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and the Company's subsequent Quarterly Reports on Form 10-Q and other periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent filings with the Securities and Exchange Commission. About Scott’s Liquid Gold-Inc. Scott’s Liquid Gold-Inc. (SLG-Inc.) is a leading manufacturer and marketer of consumer products sold nationally and internationally to retail channels over the last 70 years. SLG-Inc. markets and distributes some of the most trusted and recognized consumer brand names, including its namesake wood cleaning products; Alpha Skin Care®; Kids N Pets®; Messy Pet®; BIZ®; Denorex®; Prell® and other brands. View source version on businesswire.com: https://www.businesswire.com/news/home/20220812005075/en/Contacts Investor Relations Contact: David Arndt Chief Financial Officer 303.576.6027
Second Quarter 2022 Highlights: Second quarter 2022 net sales of $5.4 million vs. $7.8 million in 2021, including $6.5 million of same brand net sales* in 2021 Net loss of $4.3 million in Q2 2022 vs. $1.1 million in 2021 Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021 Generated operating cash flow of $0.5 million
In the press release dated August 12, 2022, Scott’s Liquid Gold-Inc. did not provide additional information and reconciliations related to non-GAAP financial measures. Please replace the release with the following corrected version. The updated release reads: SCOTT’S LIQUID GOLD-INC. REPORTS SECOND QUARTER RESULTS Second Quarter 2022 Highlights: Second quarter 2022 net sales of $5.4 million vs. $7.8 million in 2021, including $6.5 million of same brand net sales* in 2021 Net loss of $4.3 million in Q2 2022 vs. $1.1 million in 2021 Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021 Generated operating cash flow of $0.5 million Scott’s Liquid Gold-Inc. (OTC: SLGD) today announced results for the three months ended June 30, 2022. Second Quarter Financial Results In the second quarter of 2022, net sales decreased primarily due to the sale of the Dryel brand and the conclusion of our agreement to distribute Batiste products. BIZ sales declined due to continued supply chain disruptions related to our powder booster products. Sales of our Alpha Skin Care products destined for the China market decreased, and subsequent to quarter-end we terminated our relationship with our exclusive distributor in China and commenced a new go-to-market strategy in that region. Our net loss of $4.3 million was primarily driven by the $3.6 million impairment of goodwill and intangible assets related to our Kids N Pets and Messy Pet product lines. Despite the decreased sales levels compared to a year ago, our adjusted loss from operations* remained consistent between the second quarter of 2022 versus the same period in 2021 due to various improvements to our cost structure. Management Commentary "Despite a challenging operating environment, we remain committed to maximizing our value proposition for consumers across our entire portfolio of brands,” said Tisha Pedrazzini, President of Scott’s. “We have reduced overhead and continue to optimize and simplify our production and logistics networks. While inflation and supply chain shortages in select products continue to be a headwind, we continue to pursue marketing strategies that drive conversion while reducing expenditures and providing our customers the value that they have come to count on from Scott’s.” *Indicates a non-GAAP financial measure. Please refer to “Exhibit 1 – Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and a reconciliation of these non-GAAP financial measures to the related GAAP measures. SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Statements of Operations (in thousands, except per share data) Three months ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net sales $ 5,383 $ 7,769 $ 11,172 $ 16,613 Cost of sales 3,108 4,662 5,978 9,525 Gross profit 2,275 3,107 5,194 7,088 Operating expenses: Advertising 174 203 326 362 Selling 1,844 2,392 4,061 4,801 General and administrative 698 1,687 1,444 2,972 Intangible asset amortization 121 264 226 529 Impairment of goodwill and intangible assets 3,589 - 3,589 - Total operating expenses 6,426 4,546 9,646 8,664 Loss from operations (4,151 ) (1,439 ) (4,452 ) (1,576 ) Interest expense (130 ) (76 ) (280 ) (110 ) Loss before income taxes and discontinued operations (4,281 ) (1,515 ) (4,732 ) (1,686 ) Income tax (expense) benefit (52 ) 400 (52 ) 445 Loss from continuing operations (4,333 ) (1,115 ) (4,784 ) (1,241 ) Income (loss) from discontinued operations, net of taxes - 49 - (105 ) Net loss $ (4,333 ) $ (1,066 ) $ (4,784 ) $ (1,346 ) Basic and diluted net loss per common shares: Loss from continuing operations $ (0.34 ) $ (0.08 ) $ (0.38 ) $ (0.10 ) Loss from discontinued operations $ - $ - $ - $ (0.01 ) Net loss $ (0.34 ) $ (0.08 ) $ (0.38 ) $ (0.11 ) Weighted average shares outstanding: Basic and diluted 12,749 12,618 12,745 12,618 SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Balance Sheets (in thousands, except par value amounts) June 30, December 31, 2022 2021 Assets Current assets: Cash $ 66 $ 770 Restricted cash 250 500 Accounts receivable, net 1,693 3,516 Inventories 5,842 5,677 Income taxes receivable 275 320 Prepaid expenses 293 436 Total current assets 8,419 11,219 Property and equipment, net 4 7 Goodwill 838 1,710 Intangible assets, net 2,359 5,160 Operating lease right-of-use assets 2,614 2,735 Other assets 38 38 Total assets $ 14,272 $ 20,869 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 2,161 $ 2,647 Accrued expenses 626 747 Current portion of long-term debt 180 1,000 Operating lease liabilities, current portion 259 251 Total current liabilities 3,226 4,645 Long-term debt, net of current portion and debt issuance costs 1,528 1,876 Operating lease liabilities, net of current 2,649 2,780 Other liabilities 27 27 Total liabilities 7,430 9,328 Shareholders’ equity: Preferred Stock, no par value, authorized 20,000 shares; no shares issued and outstanding - - Common Stock; $0.10 par value, authorized 50,000 shares; issued and outstanding 12,749 shares (2022) and 12,727 shares (2021) 1,275 1,273 Capital in excess of par 7,872 7,789 (Accumulated deficit) retained earnings (2,305 ) 2,479 Total shareholders’ equity 6,842 11,541 Total liabilities and shareholders’ equity $ 14,272 $ 20,869 SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) Six Months Ended June 30, 2022 2021 Cash flows from operating activities: Net loss $ (4,784 ) $ (1,346 ) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 339 905 Stock-based compensation 85 102 Deferred income taxes - (503 ) Impairment of goodwill and intangible assets 3,589 - Change in operating assets and liabilities: Accounts receivable 1,823 (211 ) Inventories (165 ) (2,782 ) Prepaid expenses and other assets 143 166 Income taxes receivable 45 22 Accounts payable, accrued expenses, and other liabilities (609 ) 2,942 Total adjustments to net loss 5,250 641 Net cash provided by (used in) operating activities 466 (705 ) Cash flows from investing activities: Purchase of software (142 ) (113 ) Net cash used in investing activities (142 ) (113 ) Cash flows from financing activities: Repayments on term loans (2,000 ) (500 ) Proceeds from revolving credit facility 14,737 19,517 Repayments of revolving credit facility (14,015 ) (18,184 ) Net cash (used in) provided by financing activities (1,278 ) 833 Net (decrease) increase in cash and restricted cash (954 ) 15 Cash and restricted cash, beginning of period 1,270 5 Cash and restricted cash, end of period $ 316 $ 20 Supplemental disclosures: Cash paid during the period for interest $ 170 $ 212 Exhibit 1 – Non-GAAP Financial Measures The following provides definitions and other information regarding the non-GAAP financial measures used in this press release which may not be the same as or comparable to similar measures presented by other companies: Same brand net sales: Measure of net sales excluding impacts of acquisitions, divestitures, and changes in distributor relationships from year over year comparisons. For the three months ended June 30, 2021, these sales exclude $1.2 million of net sales associated with the Batiste brand we no longer distribute and are summarized under the line item of ‘Excluded net sales’ in the table below for each period presented. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales dollars on a consistent basis. Adjusted loss from operations: Loss from operations excluding the impact of certain costs that are not expected to be incurred on an ongoing basis in future operating periods. For the three months ended June 30, 2022, the costs excluded were impairment of goodwill and intangible assets of $3.6 million. For the three months ended June 30, 2021, the costs excluded were restructuring costs associated with separation of employees of $0.8 million. These items are summarized under the line item ‘Excluded costs’ in the table below for each period presented. Management believes this non-GAAP measure provides a supplemental perspective to the Company's operating efficiency over time. We use these financial measures internally to evaluate segment and overall operating performance. While we believe that these financial measures are useful in evaluating our underlying business performance and trends, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES Non-GAAP Reconciliations For the Three Months Ended June 30, 2022 and 2021 (in thousands) (Unaudited) 2022 2021 Same brand net sales Net sales, GAAP $ 5,383 $ 7,769 Excluded net sales - (1,229 ) Same brand net sales, non-GAAP $ 5,383 $ 6,540 2022 2021 Adjusted loss from operations Loss from operations, GAAP $ (4,151 ) $ (1,439 ) Excluded costs 3,589 805 Adjusted loss from operations, non-GAAP $ (562 ) $ (634 ) Note Regarding Forward-Looking Statements This news release may contain "forward-looking statements" within the meaning of the federal securities laws that are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" generally can be identified by the use of forward-looking terminology such as "assumptions," "target," "guidance," “strategy,” "outlook," "plans," "projection," "may," "will," "would," "expect," "intend," "estimate," "anticipate," "believe”, "potential," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology. Forward-looking statements convey our expectations, intentions, or forecasts about future events, circumstances, or results. All forward-looking statements, by their nature, are subject to assumptions, risks, and uncertainties, which may change over time and many of which are beyond our control. You should not rely on any forward-looking statement as a prediction or guarantee about the future. Actual future objectives, strategies, plans, prospects, performance, conditions, or results may differ materially from those set forth in any forward-looking statement. Some of the factors that may cause actual results or other future events or circumstances to differ from those in forward-looking statements are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and the Company's subsequent Quarterly Reports on Form 10-Q and other periodic reports filed with the Securities and Exchange Commission. Any forward-looking statement made by us or on our behalf speaks only as of the date that it was made. We do not undertake to update any forward-looking statement to reflect the impact of events, circumstances, or results that arise after the date that the statement was made, except as required by applicable securities laws. You, however, should consult further disclosures (including disclosures of a forward-looking nature) that we may make in any subsequent filings with the Securities and Exchange Commission. About Scott’s Liquid Gold-Inc. Scott’s Liquid Gold-Inc. (SLG-Inc.) is a leading manufacturer and marketer of consumer products sold nationally and internationally to retail channels over the last 70 years. SLG-Inc. markets and distributes some of the most trusted and recognized consumer brand names, including its namesake wood cleaning products; Alpha Skin Care®; Kids N Pets®; Messy Pet®; BIZ®; Denorex®; Prell® and other brands. View source version on businesswire.com: https://www.businesswire.com/news/home/20220812005075/en/
