8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): March 31, 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. ☐

Item 2.02 Results of Operations and Financial Condition.

On March 31, 2022, Scott’s Liquid Gold-Inc. (the “Company”) issued a press release announcing its financial results for the year ended December 31, 2021. This press release is furnished herewith as Exhibit 99.1 pursuant to this Item 2.02.

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. press release, dated March 31, 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:	March 31, 2022	By:	/s/ David M. Arndt
			David M. Arndt
			Chief Financial Officer

EX-99.1

         EXHIBIT 99.1

  Corporate & financial news release

SCOTT’S LIQUID GOLD-INC. REPORTS 2021 RESULTS

2021 Results and Highlights:

Fourth quarter:

• Fourth quarter 2021 net sales of $8.9 million vs. $9.1 million in 2020

• Net loss of $7.3 million in Q4 2021, including:

o $6.3 million impairment charges on goodwill and intangible assets

o $0.8 million loss on sale of Dryel brand

Fiscal year:

• Net sales of $35.9 million in 2021 vs. $30.2 million in 2020

• Net loss of $11.1 million, including:

o $7.1 million in Q4 impairment charges and loss on sale of Dryel

o $0.8 million tax expense driven by $3.1 million valuation allowance of deferred tax asset

o $0.8 million in restructuring costs

o $0.4 million impairment of inventories

GREENWOOD VILLAGE, COLORADO – March 31, 2022 – Scott’s Liquid Gold-Inc. (OTC: SLGD) today announced results for the year ended December 31, 2021.

Financial Results

Fourth Quarter

In the fourth quarter of 2021, net sales remained generally consistent with the same period in 2020. Sales growth in 2021 of Alpha Skin Care, Denorex, and Batiste were offset by lower sales of Scott’s Liquid Gold, Kids N Pets, and Prell.

Our net loss of $7.3 million was primarily driven by non-cash and one-time impairment charges to goodwill and intangible assets. The impairment charges resulted from our review of carrying values of goodwill and certain intangible assets triggered by revisions to our internal forecasts relating to all reporting units, primarily driven by our sale of Dryel and the impact of rising costs associated with the manufacture and distribution of our products. We continued to experience increases in logistics-related expenses driven by supply chain disruptions and shipping delays.

Fiscal Year 2021

Fiscal year 2021 results showed an increase in net sales related to our acquisitions of BIZ and Dryel in 2020, as well as growth in our Alpha Skin Care and Denorex brands.

Our net loss was primarily driven by non-cash and one-time expenses, as well as from amortization and increased interest expense. Our results were further impacted by increases in supply chain- and logistics-related costs that offset our growth in gross profit.

Management Commentary

“In 2021, we continued to face supply chain disruptions that impacted sales and increased logistics costs,” said Tisha Pedrazzini, President of Scott’s. “Despite these challenges, we made progress in reducing overhead expenses and simplifying our supply chain and 3PL networks. We have positioned our highest potential brands for growth by focusing on innovation with new products recently launched on Amazon.”

Dan Roller, Chairman of the Board, commented, “One of our key strategic priorities has been evaluating and optimizing Scott’s portfolio of brands. We made a key step towards this goal in the fourth quarter of 2021 with our sale of the Dryel brand, the proceeds of which we used to reduce net debt. The board and management continue to evaluate our portfolio with the goal of maximizing our Company’s long-term value.”

                               SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share data)

	Year Ended
	December 31,
	2021			2020
Net sales	$	33,081		$	28,958
Cost of sales		19,082			16,433
Impairment of inventories		404			876
Total cost of sales		19,486			17,309
Gross Profit		13,595			11,649
Operating expenses:
Advertising		639			702
Selling		9,797			7,546
General and administrative		4,611			4,724
Intangible asset amortization		1,111			1,005
Impairment of goodwill and intangible assets		6,294			-
Impairment of property and equipment		-			107
Total operating expenses		22,452			14,084
Loss from operations		(8,857	)		(2,435	)
Interest expense		(373	)		(216	)
Other income		-			350
Loss before income taxes and discontinued operations		(9,230	)		(2,301	)
Income tax (expense) benefit		(1,008	)		707
Loss from continuing operations		(10,238	)		(1,594	)
(Loss) income from discontinued operations, net of taxes		(853	)		43
Net loss	$	(11,091	)	$	(1,551	)
Basic and diluted net loss per common shares:
Loss from continuing operations	$	(0.81	)	$	(0.13	)
Loss from discontinued operations	$	(0.07	)	$	0.00
Net loss	$	(0.88	)	$	(0.13	)
Weighted average shares outstanding:
Basic and diluted		12,678			12,635

SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except par value amounts)

	December 31,		December 31,
	2021		2020
Assets
Current assets:
Cash	$	770	$	5
Restricted cash		500		-
Accounts receivable, net		3,516		4,512
Inventories		5,677		3,808
Income taxes receivable		320		535
Prepaid expenses		436		596
Other current assets		-		112
Current assets associated with discontinued operations		-		180
Total current assets		11,219		9,748
Property and equipment, net		7		18
Deferred tax asset, net		-		969
Goodwill		1,710		3,823
Intangible assets, net		5,160		9,984
Operating lease right-of-use assets		2,735		2,985
Other assets		38		38
Long-term assets associated with discontinued operations		-		5,991
Total assets	$	20,869	$	33,556
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	2,647	$	1,799
Accrued expenses		747		296
Current portion of long-term debt		1,000		1,000
Operating lease liabilities, current portion		251		249
Other current liabilities		-		67
Total current liabilities		4,645		3,411
Long-term debt, net of current portion and debt issuance costs		1,876		4,521
Operating lease liabilities, net of current		2,780		3,032
Other liabilities		27		127
Total liabilities		9,328		11,091
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 12,727 shares (2021) and 12,618 shares (2020)		1,273		1,262
Capital in excess of par		7,789		7,633
Retained earnings		2,479		13,570
Total shareholders’ equity		11,541		22,465
Total liabilities and shareholders’ equity	$	20,869	$	33,556

SCOTT’S LIQUID GOLD-INC. & SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended
	December 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(11,091	)	$	(1,551	)
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
Depreciation and amortization		1,820			1,430
Stock-based compensation		110			332
Deferred income taxes		784			(229	)
Loss on disposal of discontinued operations		834			-
Impairment of equipment		-			107
Impairment of inventories		404			876
Impairment of goodwill and intangible assets		6,294			-
Change in operating assets and liabilities:
Accounts receivable		996			(1,817	)
Inventories		(2,093	)		4,256
Prepaid expenses and other assets		272			(323	)
Income taxes receivable		215			170
Accounts payable, accrued expenses, and other liabilities		1,133			331
Total adjustments to net loss		10,769			5,133
Net cash (used) provided by operating activities		(322	)		3,582
Cash flows from investing activities:
Acquisition		-			(10,529	)
Purchase of software		(469	)		-
Proceeds from sale of discontinued operations		4,850			-
Purchase of property and equipment		-			(17	)
Proceeds from sale of property and equipment		-			500
Cash paid for leasehold improvements		-			(484	)
Reimbursement of leasehold improvements		-			433
Net cash provided by (used in) investing activities		4,381			(10,097	)
Cash flows from financing activities:
Proceeds from revolving credit facility		40,677			16,995
Repayments of revolving credit facility		(43,885	)		(13,573	)
Proceeds from term loan		2,000			3,000
Repayments of term loan		(1,583	)		(417	)
Payments for debt issuance costs		(60	)		(646	)
Proceeds from PPP loan		-			600
Repayment of PPP loan		-			(600	)
Proceeds from exercise of stock options		57			67
Net cash (used in) provided by financing activities		(2,794	)		5,426
Net increase (decrease) in cash		1,265			(1,089	)
Cash and restricted cash, beginning of period		5			1,094
Cash and restricted cash, end of period	$	1,270		$	5
Cash and restricted cash, end of period associated with discontinued operations	$	-		$	-
Cash and restricted cash, end of period associated with continuing operations	$	1,270		$	5
Supplemental disclosures:
Cash paid during the period for interest	$	564		$	183

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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Document and Entity Information	Mar. 31, 2022
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Mar. 31, 2022
Entity Registrant Name	SCOTT’S LIQUID GOLD-INC.
Entity Central Index Key	0000088000
Entity Emerging Growth Company	false
Entity File Number	001-13458
Entity Incorporation, State or Country Code	CO
Entity Tax Identification Number	84-0920811
Entity Address, Address Line One	8400 E. Crescent Parkway
Entity Address, Address Line Two	Suite 450
Entity Address, City or Town	Greenwood Village
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80111
City Area Code	(303)
Local Phone Number	373-4860
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