January 23, 2017 5:28 PM ET

Specialty Retail

Company Overview of The Kitchen Collection, LLC

Company Overview

The Kitchen Collection, LLC operates as a housewares retailer in the United States. The company sells small appliances, bake ware, kitchen gadgets, cookware, cutlery, tableware, food products, decorative wood products, and marble and ceramics. It also sells factory overstocks, warehouse clearance items, and other special products. The company sells products through its stores located in traditional and outlet malls; and online stores. The company was founded in 1980 and is based in Chillicothe, Ohio. The Kitchen Collection, LLC operates as a subsidiary of Nacco Industries Inc.

71 East Water Street

Chillicothe, OH 45601

United States

Founded in 1980

Phone:

740-773-9150

Fax:

740-774-0593

Key Executives for The Kitchen Collection, LLC

Chief Executive Officer and Director
Age: 54
Compensation as of Fiscal Year 2016.

The Kitchen Collection, LLC Key Developments

Kitchen Collection, LLC Reports Earnings Results for the Third Quarter and Nine Months Ended September 30, 2016; Provides Earnings Guidance for the Fourth Quarter and Full Year of 2016 and Full Year of 2017

Kitchen Collection, LLC reported earnings results for the third quarter and nine months ended September 30, 2016. For the quarter, the company reported revenues of $32.9 million against $34.7 million for the same period a year ago. Operating loss was $0.9 million against $0.8 million for the same period a year ago. Loss before taxes was $1.0 million against $0.9 million for the same period a year ago. Net loss was $0.7 million against $0.6 million for the same period a year ago. Capital expenditures were $0.3 million against $0.7 million for the same period a year ago. Net cash provided by operating activities was $1.2 million against $1.5 million for the same period a year ago. Negative return on equity was 2.6% against 4.1% for the same period a year ago. The decrease in revenues were primarily the result of sales lost from closing 14 unprofitable stores since September 30, 2015 and a decline in comparable store sales. The company’s net loss increased primarily due to a lower effective income tax rate that resulted in a lower tax benefit on the company’s 2016 pre-tax loss, which was comparable to the prior year. The comparable pre-tax loss reflected lower revenues, but also lower expenses from expense reductions and a focus on maximizing product sales margins. Adjusted revenues were $32,895,000 against $34,708,000 for the same period a year ago. Adjusted operating loss was $921,000 against $843,000 for the same period a year ago. Adjusted loss before income tax provision (benefit) was $991,000 against $904,000 for the same period a year ago. Adjusted net loss was $717,000 against $550,000 for the same period a year ago. For the nine months ended September 30, 2016, the company reported a net loss of $4.5 million and revenues of $89.9 million compared with a net loss of $4.3 million and revenues of $94.5 million for the nine months ended September 30, 2015. Adjusted revenues were $89,912,000 against $94,457,000 for the same period a year ago. Adjusted operating loss was $6,822,000 against $6,860,000 for the same period a year ago. Adjusted loss before income tax provision (benefit) was $7,007,000 against $7,013,000 for the same period a year ago. Adjusted net loss was $4,539,000 against $4,290,000 for the same period a year ago. As a result of ongoing market weakness and fewer stores, the company anticipates revenues to decline modestly in the fourth quarter of 2016 compared with the respective 2015 period. Fourth quarter 2016 results are expected to be comparable to the prior year period as a result of a lower effective income tax rate. Capital expenditures are expected to be $0.4 million in the fourth quarter of 2016. As a result of ongoing market weakness and fewer stores, the company anticipates revenues to decline modestly in the 2016 full year compared with the respective 2015 period. Full year 2016 results are expected to be comparable to the prior year period as a result of a lower effective income tax rate. Capital expenditures are expected to be $1.5 million for the 2016 full year. As a result of these initiatives, the company expects near breakeven results in 2017, provided customer visits are at expected levels, on lower revenues. Revenues in 2017 are expected to decrease modestly compared with 2016 as Kitchen Collection continues to prudently close non-performing stores.

Concentric Communications Announces National Distribution with Kitchen Collection for the Unique New Product the Jellydish Garlic Peeler

Concentric Communications is awarded national distribution for the unique new product the JellyDish Garlic Peeler. The Garlic Peeler's unique design helped to win national placement on store shelves after demonstrating its "better mousetrap" feature of keeping the mess of the skins contained in its own dish. The order shipped on-schedule August 1 to the Kitchen Collection distribution center in Ohio. This fall the garlic peelers will be set on shelves in all 220 stores including its store here at the Gretna mall.

Kitchen Collection Reports Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2015; Provides Earnings Guidance for the Year 2016

Kitchen Collection reported earnings results for the fourth quarter and full year ended December 31, 2015. For the quarter, the company reported net income of $3.9 million and revenues of $56.5 million for the fourth quarter of 2015 compared with net income of $3.1 million and revenues of $61.3 million for the fourth quarter of 2014. The fourth quarter 2014 results include charges totaling $2.8 million pre-tax related to planned store closures and realigning the supporting business infrastructure accordingly. The substantial decline in Revenue was primarily the result of a reduction in the number of stores in 2015 as a result of realigning the business around a smaller core number of Kitchen Collection stores. A decrease in comparable store sales due to fewer customer visits, reductions in the number of store transactions and a lower average sales transaction value also contributed to the decline in revenue. Sales at newly opened Kitchen Collection stores partially offset the revenue decline. The improvement in the 2015 fourth quarter net income was largely due to the absence of the realignment charges of $2.8 million taken in 2014. Excluding the 2014 realignment charges, overall fourth quarter 2015 results decreased moderately from 2014 primarily as a result of fewer stores being open during the peak holiday-selling season and recognition of non-deductible employee-related expenses. Operating profit was $7.0 million against $5.1 million a year ago. Income before taxes was $7.0 million against $5.0 million a year ago. Capital expenditures were $0.6 million against $0.2 million a year ago. Net cash provided by operating activities was $17.8 million against $17.0 million a year ago. For the year, the company reported net loss of $0.4 million and revenues of $151.0 million compared with a net loss of $4.6 million and revenues of $168.5 million for the year ended December 31, 2014. For the 2015 full year, Kitchen Collection generated net cash provided by operating activities of $12.5 million, as a result of substantially reduced working capital levels, partially offset by net cash used for investing activities of $1.7 million. For the 2014 full year, Kitchen Collection generated net cash provided by operating activities of $7.1 million partially offset by net cash used for investing activities of $0.8 million. Operating profit was $0.2 million against operating loss of $7.1 million a year ago. Capital expenditures were $1.8 million against $1.2 million a year ago. Negative return on equity was 1.3% against 14.3% a year ago. As a result of ongoing market weakness, Kitchen Collection anticipates 2016 revenues and results to be comparable with 2015. Kitchen Collection believes its remaining stores are well-positioned to allow the company to perform at close to break-even in the current challenging environment and to take advantage of any future market rebound. Cash flow before financing activities is expected to be positive in 2016 but substantially lower than 2015. Longer term, Kitchen Collection plans to focus on comparable store sales growth within its smaller core store portfolio. Kitchen Collection expects to accomplish this by increasing closure rates through continued refinement of its format, ongoing review of specific product offerings, merchandise mix, store displays and appearance and enhancing customers' store experience through improved customer interactions. Increasing sales of higher-margin products will also continue to be a key focus, as well as continuing to evaluate and, as lease contracts permit, terminate or restructure leases for underperforming and loss-generating stores.

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