8-K/A

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<br><br><br>of incorporation)	(Commission File Number)	(I.R.S. Employer<br><br><br>Identification No.)
8400 E. Crescent Parkway, Suite 450, Greenwood Village, CO	80111
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(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

slgd-ex991_7.htm

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
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•	Adjusted loss from operations* of $0.6 million in Q2 2022 and Q2 2021
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•	Generated operating cash flow of $0.5 million
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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)

			December 31,
			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

All values are in US Dollars.

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.
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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