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Form 8-K/A Scott's Liquid Gold - For: Aug 12

August 15, 2022 6:50 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

   

      

FORM 8-K/A
(Amendment No. 1)  

  

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 12, 2022

      

SCOTT’S LIQUID GOLD-INC.

(Exact name of Registrant as specified in its charter)

      

   

 

Colorado

001-13458

84-0920811

(State or other jurisdiction

of incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

   

 

8400 E. Crescent Parkway, Suite 450, Greenwood Village, CO

   

80111

(Address of principal executive offices)

   

(Zip Code)

   

Registrant’s telephone number, including area code: (303) 373-4860

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

      

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

   

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

   

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

   

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

   

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Exchange Act.

 

 

Title of each class

 

Trading Symbol

 

Name of exchange on which registered

 

 

None

 

None

 

None

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

      


 

Explanatory Note

On August 12, 2022, Scott’s Liquid Gold-Inc., (the “Company”) filed with the Securities and Exchange Commission a Current Report on Form 8-K under Item 2.02 regarding its results of operations and financial condition for the three months ended June 30, 2022 (the “Original Earnings Release”). This Form 8-K/A amends Item 9.01 the Original Earnings Release solely to provide additional definitions and reconciliations related to non-GAAP measures (the “Revised Earnings Release”). No other changes have been made to the Original Earnings Release.

Item 2.02 Results of Operations and Financial Condition.

 

On August 12, 2022, the “Company filed the Original Earnings Release to report its financial results for the three months ended June 30, 2022. The Original Earnings Release reflected minimal definitions and reconciliations of non-GAAP financial measures. The Revised Earnings Release includes these definitions and reconciliations. The Company uses the information in the Revised Earnings Release and believes that it is helpful in evaluating our underlying business performance and trends, but 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 A copy of the Revised Earnings Release (Exhibit 99.1) is attached.

The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Additionally, the information contained in this Item 2.02 or Exhibit 99.1 shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

 

 

Item 9.01Financial Statements and Exhibits.

 

(d)Exhibits: The following exhibits are filed as part of this report:

 

Exhibit No.

 

Description

99.1

 

Scott’s Liquid Gold-Inc. amended press release, dated August 15, 2022.

104

 

Cover Page Interactive Data File

 



 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   

 

   

   

   

SCOTT’S LIQUID GOLD-INC.

   

   

   

   

Date:

August 15, 2022

By:

/s/ David M. Arndt

   

   

   

David M. Arndt

   

   

   

Chief Financial Officer

   

 

 

 

 

 

EXHIBIT 99.1

                              

Corporate & financial news release

 

CORRECTION – SCOTT’S LIQUID GOLD-INC. REPORTS SECOND QUARTER RESULTS

 

CORRECTION...by Scott’s Liquid Gold-Inc.

GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)-- 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.

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.

 

 

 

 

 

 

 

Investor Relations Contact:

David Arndt

Chief Financial Officer

303.576.6027

 

 



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