What changed in this filing

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Item 1A. Risk Factors

2026-03-12 compared with 2025-03-13 · 163 added, 100 removed, 387 unchanged (40% of the section changed)

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Macroeconomic risks

The Company’s business may be materially adversely affected by market conditions and by global and economic conditions and other factors beyond its control.

The Company’s business may be materially adversely affected by market conditions, global and economic conditions and other factors beyond its control.

The Company’s performance is affected by general economic factors, the strength of retail economies and political conditions that are beyond its control.

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• conditions affecting the housing markets;

• consumer credit availability and consumer debt levels;

• consumer credit availability and consumer debt levels, including tightening lending standards or increased credit defaults;

• material input costs, including fuel and energy costs, freight costs, and labor cost inflation;

• foreign currency translation;

• foreign currency translation, foreign exchange rate volatility, currency controls, and restrictions on capital movements;

• interest rates and the ability to hedge interest rate risks;

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• public health epidemics, such as the COVID-19 pandemic;

• unfavorable economic conditions in the United States, the U.K., continental Europe, Asia and elsewhere;

• political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the repercussions of the military conflict in Ukraine, Israel and surrounding areas (and any broadening of the conflict);

• uncertainties relating to, and the potential for unfavorable economic conditions in the United States, the U.K., continental Europe, Asia and elsewhere;

• political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the repercussions of the ongoing conflicts between Russia and the Ukraine, conflicts in the Middle East, and increasing tensions between China and Taiwan (and any broadening of the conflict);

• unstable economic and political conditions, lack of legal regulation enforcement, civil unrest and potential accompanying shifts in laws and regulations;

• legislative and regulatory risk.

The occurrence of negative events related to any of the foregoing may adversely impact the Company’s results of operations and financial condition .

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The Company also relies on third parties for transportation and is exposed to fluctuations in freight costs to transport goods as well as the price of fuel and gasoline.

These prices may fluctuate based on a number of factors beyond the Company’s control, including from geopolitical conditions such as the military conflict in Ukraine and resulting sanctions imposed by the U.S.

and other countries.

Inflation has resulted and could continue to result in significant cost increases.

These prices may fluctuate based on a number of factors beyond the Company’s control, including from fluctuations in raw material costs (including metals, plastics and packaging materials), labor costs at third-party manufacturing facilities, ocean freight and container rates, port congestion, fuel and energy prices and changes in tariffs or duties applicable to imported goods.

If the Company is unable to mitigate any cost increases from the foregoing factors through various customer pricing actions and cost reduction initiatives, its financial condition may be adversely affected.

Conversely, in the event that there is deflation, the Company may experience pressure from its customers to reduce prices.

Conversely, in the event that there is deflation, the Company

may experience pressure from its customers to reduce prices.

There can be no assurance that the Company would be able to reduce its cost base to offset any such price concessions, which could adversely impact its results of operations and cash flows.

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A majority of the Company’s products are sourced from vendors outside the U.S.

During the last several years there have also been significant changes to U.S.

During the last several years there have been significant changes to U.S.

trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting products from outside of the U.S.

For example, in early 2025, the current U.S.

presidential administration announced significant new tariffs on foreign imports into the U.S., specifically from Mexico, Canada, and China, and has proposed additional new tariffs that may be implemented in the future.

Given the Company’s reliance upon non-domestic suppliers, any significant changes to the U.S.

In 2025, the U.S.

government introduced new tariff policy on foreign imports into the U.S.

which increased tariff rates across most countries and created the possibility for additional new tariffs that may be implemented in the future.

In February 2026, the U.S.

Supreme Court struck down the tariffs imposed by the U.S.

administration, which has indicated that it will seek alternative trade authority in response to the ruling.

We cannot predict what additional changes to trade policy will be made by the U.S.

administration or Congress, including whether existing tariff policies will be maintained or modified, what products may be subject to such policies, or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such changes would have on our business, capital expenditures, and results of operations.

Tariff rates, product classifications and enforcement practices may continue to change with limited notice and may be applied retroactively or expanded to additional product categories.

Given the Company’s reliance upon non-domestic suppliers, primarily China, any significant changes to the U.S.

trade policies (and those of other countries in response) or changes without sufficient notice may cause a material adverse effect on its ability to source products from other countries or significantly increase the costs of obtaining such products, which could result in a material adverse effect on our financial results.

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markets, could also increase the cost of some of our products and reduce our margins.

In response to the tariffs, the Company may seek to increase prices to its customers, which may diminish demand for its products.

In response to the tariffs imposed in 2025, the Company has negotiated price increases to its U.S.

customers, negotiated lower product costs with its foreign suppliers and pursues diversification of its foreign sourced products to countries that are expected to be subject to lower tariffs.

The imposition of additional tariffs or other trade barriers could increase our costs in certain markets and may cause our customers to find alternative sourcing or could make it more difficult for us to sell our products in some markets.

In addition, increased review by U.S.

Customs and Border Protection or other regulatory authorities, including with respect to country-of-origin determinations, supply chain compliance, or sanctions requirements, may result in administrative delays or additional compliance costs.

Other countries where we operate or sell our products have changed, and may continue to change, their own policies on trade as well as business and foreign investment in their respective countries.

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or other countries.

Changes in economic policies of the government of China have had a material adverse effect on our business, results of operations and financial condition, and may continue to do so for the foreseeable future.

We are subject to significant risks associated with the trading relationship between the U.S.

and China, which is currently characterized by significant uncertainty.

In addition to tariffs newly imposed by the U.S.

and China, which have fluctuated and remain volatile, and may increase, our costs, there may be additional import, export, tax, or other regulatory changes effected by the U.S.

and Chinese governments in the future that could also adversely affect our business and results of operations.

For example, in recent years, the Chinese government has implemented new measures that address the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources in the economy.

However, a significant portion of productive assets in China are still owned by the Chinese government.

The Chinese government continues to play a significant role in regulating industrial development and exercises significant control over China’s economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policies, restricting the inflow and outflow of foreign capital and providing preferential treatment to particular industries or companies.

Accordingly, our business, financial condition and results of operations may be influenced to a significant degree by economic, political, legal and social conditions in China.

Although some of the measures implemented by the Chinese government to develop and foster economic development and guide the allocation of resources may benefit the overall Chinese economy, these measures may have a negative effect on us.

In particular, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations that are currently applicable to us.

In addition, in the past the Chinese government implemented certain measures, including interest rate increases, to control the pace of economic growth.

These measures may cause decreased economic activity and high rates of inflation in China, which may adversely affect our business, financial condition and results of operations.

The Company’s ability to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by macroeconomic and company-specific events, as well as the financial condition of insurers.

The Company is generally not fully insured against all significant losses.

For example, the Company is not fully insured against hurricane, earthquake, acts of war, and terrorism related losses.

A loss for which the Company is not fully insured could have a material adverse effect on the business, financial condition, results of operations and prospects.

For example, the Company is not fully insured against hurricane, earthquake, acts of war, and terrorism related losses, cybersecurity incidents, pandemics, or certain other climate-related events.

In addition, certain policies may contain exclusions, sublimits, higher deductibles or self-insured retentions that could limit recoveries.

A loss for which the Company is not fully insured or for which insurance proceeds are insufficient or delayed, could have a material adverse effect on the business, financial condition, results of operations and prospects.

Insurance coverage may not continue to be available or may not be available at rates or on terms similar to those presently available to the Company.

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The Company may be unable to generate cash sufficient to pay when due the principal of, interest on, or other amounts due with respect to, its indebtedness.

In addition, the Company’s business is seasonal with a significant amount of its revenue realized during

the latter portion of the year.

In addition, the Company’s business is seasonal with a significant amount of its revenue realized during the latter portion of the year.

Therefore, the Company’s borrowing needs fluctuate widely based upon its seasonal working capital requirements.

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The Term Loan requires the Company to maintain a maximum Total Net Leverage Ratio of 5.00 to 1.00 as of the last day of its fiscal quarters.

As a result of this and other covenants within the Debt Agreements, the Company may be limited in its ability to incur additional debt, make investments or undertake certain other business activities, including restrictions on asset sales, dividends, share repurchases, affiliate transactions and the granting of liens.

These requirements could limit the Company’s ability to obtain future financing and may prevent the Company from taking advantage of attractive business opportunities.

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An increase in interest rates would adversely affect the Company’s profitability.

For example, in 2024 interest expense increased by $0.5 million compared to the prior year as a result of a higher interest rate environment, partially offset by lower average outstanding borrowings.

For example, in 2025 interest expense decreased by $2.2 million compared to the prior year as a result of a lower interest rate environment, and lower average outstanding borrowings.

To the extent that the Company’s access to credit may be restricted because of its own performance, its bank lenders’ performances or conditions in the capital markets generally, the Company would not be able to operate normally.

The Company’s Receivables Purchase Agreement also depends upon the Secured Overnight Financing rate (“SOFR”), as it is a component of the discount rate applicable to the agreement.

If SOFR increases, the Company may not be able to rely on the

Receivables Purchase Agreement, which could have a material and adverse effect upon the Company’s financial condition, results of operations and cash flows.

If SOFR increases, the Company may not be able to rely on the Receivables Purchase Agreement, which could have a material and adverse effect upon the Company’s financial condition, results of operations and cash flows.

Changes in benchmark interest rates, including the replacement or modification of SOFR or the application of credit spreads or benchmark adjustments, could further increase financing costs or create uncertainty in the calculation of amounts payable under the Company’s debt and receivables facilities.

In addition, the Company’s ability to access the Receivables Purchase Agreement may depend on the continued eligibility of receivables sold thereunder and the financial condition of the purchasers or other counterparties.

Although the Company may from time to time enter into hedging arrangements to mitigate interest rate risk, such arrangements may not fully offset increases in interest rates and may expose the Company to counterparty risk or additional costs.

The Company’s inability to complete future acquisitions or strategic alliances and/or integrate acquired businesses could have a material adverse effect on the Company’s business and results of operations.

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• risks associated with locating and entering into agreements with third-party logistics providers to assist in certain locations or to develop strategies to address inventory surges;

• potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisition.

• potential unknown liabilities and unforeseen increased expenses or delays associated with the acquisition, including contingent liabilities, litigation exposure, tax exposures, environmental matters, compliance deficiencies or indemnification disputes;

• the risk of loss of key employees, customers, suppliers or other business relationships of the acquired business following the transaction.

It is possible that the integration process could result in diversion of the attention of each company’s management, which could adversely affect each company’s ability to maintain relationships with customers, clients, employees, and other constituencies or the Company’s ability to achieve the anticipated benefits of the acquisition, or could reduce each company’s operating results or otherwise adversely affect the Company’s business and financial results.

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dollar, primarily U.K.

pounds, and to a lesser degree, Chinese renminbi, Euros, Hong Kong dollars, Mexican peso and Canadian dollars.

pounds, and to a lesser degree, Australian dollars, Chinese renminbi, Euros, Hong Kong dollars, New Zealand dollars, Mexican peso and Canadian dollars.

Such transactions affect the Company’s operating results and financial condition.

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dollar, the Company’s costs related to the supplies and inventory it sources internationally will increase.

Foreign exchange markets have experienced significant volatility in recent periods, and geopolitical tensions, inflation differentials, monetary policy divergence and capital market disruptions may contribute to continued volatility.

The vast majority of the Company’s inventory is purchased from Chinese suppliers in U.S.

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As a result, the gross margin from international operations is subject to volatility from movements in exchange rates, which could have an adverse effect on the financial condition and results of operations and profitability from international operations.

The Company has entered into foreign exchange derivative contracts to hedge the volatility of exchange rates related to a portion of its international inventory purchases.

In addition, there may be a timing lag between exchange rate movements and the Company’s ability to adjust pricing, which could compress margins.

From time to time, the Company enters into foreign exchange derivative contracts to hedge the volatility of exchange rates related to a portion of its international inventory purchases.

The Company cannot ensure, however, that these hedges will fully offset the impact of foreign currency rate movements.

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Currency controls may limit the Company’s ability to convert currencies into U.S.

other currencies, as needed, to pay dividends or make other payments from funds held by subsidiaries in countries imposing such controls, which could adversely affect the Company’s liquidity.

dollars or other currencies, as needed, to pay dividends or make other payments from funds held by subsidiaries in countries imposing such controls, which could adversely affect the Company’s liquidity.

If the Company expands its international operations, it will be subject to increased foreign exchange variability which could have a material adverse effect on the Company’s results of operations.

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In order to operate more efficiently and control costs, the Company may announce restructuring plans from time to time, including workforce reductions, global facility consolidations and other cost reduction initiatives that are intended to generate operating expense savings.

These initiatives may require upfront cash expenditures, including severance, lease termination costs, asset write-offs and other restructuring charges.

The implementation of restructuring plans could be disruptive to the Company’s operations, result in higher than anticipated charges and otherwise adversely affect the Company’s results of operations and financial condition.

Workforce reductions may also result in the loss of key personnel, decreased employee morale, or challenges in recruiting and retaining talent.

In addition, the Company’s ability to complete restructuring plans and achieve the anticipated benefits from a plan is subject to estimates and assumptions and may vary materially from the Company’s expectations, including as a result of factors that are beyond the Company’s control.

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If the Company’s goodwill or other long-term assets become impaired, the Company will be required to record impairment charges, which may be significant.

A portion of the Company’s long-term assets consists of goodwill recorded as a result of the Company’s acquisitions;

other identifiable intangible assets, including trade names;

The carrying value of the goodwill for the U.S.

reporting unit was zero as of December 31, 2025.

In the second quarter of 2025, the Company observed a sustained decline in the market valuation of the Company's common stock.

Additionally, the Company's near term forecasts for the U.S.

reporting unit were revised downward due to changes in retailer and consumer buying patterns, which were impacted by the recent changes in the U.S.

tariff policies.

Based on these factors the Company concluded that impairment indicators for the U.S.

reporting unit were present as of June 30, 2025.

The company performed an interim impairment test of the goodwill in the U.S.

reporting unit as of June 30, 2025 by comparing the fair value with its carrying value.

The analysis was performed by using a discounted cash flow and market multiple method.

Accordingly, this fair value measurement is classified as Level 3 since it is based primarily on unobservable inputs.

Based upon the analysis performed, the Company's U.S.

reporting unit goodwill was fully impaired and a $33.2 million non-cash goodwill impairment charge was recognized.

The goodwill impairment charge was the result of the decline in the Company's near term forecasts that were revised downward due to the changes in retailer and consumer buying patterns and an increase to the company-specific risk premium, which is an input to the cost of capital assumption, to address the potential risks in the long-term forecast which remain uncertain at this time.

A portion of the Company’s long-term assets consists of other identifiable intangible assets, including trade names;

and long-lived assets.

At December 31, 2024, goodwill, net of accumulated impairment charges totaled $33.2 million;

finite-lived intangible assets, net of accumulated impairment charges and accumulated amortization totaled $150.3 million.

The Company does not amortize goodwill but rather reviews it for impairment on an annual basis or more frequently when events or changes in circumstances indicate that its carrying value may not be recoverable.

If the carrying value of a reporting unit exceeds its current fair value as determined based on the discounted future cash flows of the reporting unit or comparable market sales and earnings multiples, the goodwill or intangible asset is considered impaired and is reduced to fair value.

At December 31, 2025, finite-lived intangible assets, net of accumulated impairment charges and accumulated amortization totaled $132.9 million.

These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Events and conditions that could result in impairment include a prolonged period of global economic weakness, a decline in economic conditions and/or a slow, weak economic recovery, as well as sustained declines in the price of the Company’s common stock, adverse changes in the regulatory environment, adverse changes in the market share of the Company’s products, adverse changes in interest rates, further corporate income tax reforms or other factors leading to reductions in the long-term sales or profitability that the Company expects.

Determination of the fair value of a reporting unit includes developing estimates, which are highly subjective and incorporate calculations that are sensitive to minor changes in underlying assumptions.

Management’s assumptions change as more information becomes available.

Changes in these assumptions could result in an impairment charge in the future, which could have a significant adverse impact on the Company’s reported earnings.

If the future operating performance of one or more of the Company’s operating segments does not meet expectations, the Company may be required to record a significant charge during the period in which any impairment of the Company’s goodwill or other long-term assets is determined.

The further recognition of an impairment of the Company’s goodwill or any of the Company’s assets would negatively affect the Company’s results of operations and total capitalization, the effect of which could be material.

If the undiscounted cash flows expected to be generated by these assets are less than their carrying amounts, the Company would be required to record an impairment charge equal to the excess of the carrying value over fair value.

The recognition of an impairment of the Company’s assets would negatively affect the Company’s results of operations and total capitalization, the effect of which could be material.

The Company’s projections of product demand, sales and net income are highly subjective in nature and the Company’s future sales and net income could vary materially from the Company’s projections.

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The Company’s projections are based on management’s best estimate of sales using historical sales data and other information deemed relevant.

These projections are highly subjective since sales can fluctuate substantially based on the demands of retail customers and due to other risks described in this Annual Report.

Additionally, changes in retailer inventory management strategies could make the Company’s inventory

management more difficult.

These projections

are highly subjective since sales can fluctuate substantially based on the demands of retail customers and due to other risks described in this Annual Report.

Additionally, changes in retailer inventory management strategies could make the Company’s inventory management more difficult.

Because the Company’s ability to forecast product demand and the timing of related sales requires significant subjective input, future sales and net income could vary materially from the Company’s projections, and any such variances could adversely affect the Company’s stock price, liquidity, covenant compliance or investor confidence.

Increases in the cost of employee benefits could materially adversely impact the Company’s financial results and cash flows.

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This could result in higher volatility in the Company’s earnings and exposes the Company to higher financial risks.

The Company’s medical costs in recent years have generally increased and other employee demographics could result in an increase in medical costs beyond what the Company has experienced or expects.

The Company’s medical costs in recent years have generally increased, reflecting healthcare cost inflation and higher utilization trends and changes in employee demographics, claims experience, or the severity of claims could result in medical and workers’ compensation costs that exceed the Company’s expectations or established reserves.

The Company has stop-loss coverage in place for catastrophic events, but the aggregate impact of a high number of claims up to the Company’s stop-loss limit may have an effect on the Company’s profitability.

There are inherent limitations on the effectiveness of the Company’s controls.

The Company does not expect that its disclosure controls or the Company’s internal controls over financial reporting will prevent or detect all errors and all fraud.

The Company does not expect that its disclosure controls or the Company’s internal controls over financial reporting will prevent or detect all errors or fraud.

A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

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Over time, controls are revised, as necessary, due to changes in conditions or deterioration in the degree of compliance with policies or procedures.

In addition, increased reliance on information technology systems and evolving cybersecurity threats may place additional strain on the Company’s control environment.

If in the future the Company’s controls become inadequate, it could fail to meet its financial reporting obligations, its reputation may be adversely affected, its business and operating results could be harmed, and the market price of its stock could decline.

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Changes in the Company’s customer purchasing practices could materially adversely affect the Company’s operating results.

The Company’s wholesale customers include mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, food service distributors, food and beverage outlets, corporate sales and e-commerce.

The Company’s wholesale customers include mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, dollar channel retailers, food service distributors, food and beverage outlets, corporate sales and e-commerce retailers and marketplaces.

Unanticipated changes in purchasing and other practices by the Company’s customers, including a customer’s pricing and payment terms, inventory de-stocking, limitations on shelf space, more extensive packaging requirements, changes in order quantities, use of private label brands and other practices, could materially and adversely affect the Company’s business, results of operations and financial condition.

In addition, as a result of the desire of retailers to more closely manage inventory levels and optimize their supply chains, retailers may evaluate suppliers based on their ability to deliver orders at the quantity and schedule specified, which is known as the "on-time-in-full" delivery metric.

In addition, as retailers continue to closely manage inventory levels and optimize their supply chains, retailers may evaluate suppliers based on their ability to deliver orders at the quantity and schedule specified, which is known as the "on-time-in-full" delivery metric.

Supply-chain complexity and customer demand for on-shelf availability creates additional pressure on delivery performance, which in turn can add strain on distribution channels.

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Many of the Company’s wholesale customers are significantly larger than the Company, have greater financial and other resources and also purchase goods directly from vendors in Asia and elsewhere.

Decisions by large customers to increase their purchases

directly from overseas vendors could have a material adverse effect on the Company’s business, results of operations and financial condition.

Decisions by large customers to increase their purchases directly from overseas vendors could have a material adverse effect on the Company’s business, results of operations and financial condition.

Significant changes or financial difficulties, including consolidations of ownership, restructurings, bankruptcies, liquidations or other events that affect retailers, could result in fewer retailers selling the Company’s products, reliance on a smaller group of customers, an increase in the risk of extending credit to these customers or limitations on the Company’s ability to collect amounts due from these customers.

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Changes at the Company’s large customers, or actions taken by them, and consolidation in the retail industry could materially adversely affect the Company’s operating results.

During the years ended December 31, 2024, 2023 and 2022, Wal-Mart Stores, Inc.

(“Walmart”), accounted for 19%, 21% and 19% of consolidated net sales, respectively.

During the years ended December 31, 2024, 2023 and 2022, sales to Costco Wholesale Corporation (“Costco”) accounted for 11%, 11%, and 13% of consolidated net sales.

During the year ended December 31, 2024, 2023 and 2022, Amazon.com Inc., (“Amazon”), accounted for 13%, 11% and 11% of consolidated net sales.

Sales to Costco and Amazon are included in the Company’s U.S.

During the years ended December 31, 2025, 2024 and 2023, Walmart accounted for 17%, 19% and 21% of consolidated net sales, respectively.

During the years ended December 31, 2025, 2024 and 2023, sales to Amazon accounted for 12%, 13% and 11% of consolidated net sales, respectively.

During the years ended December 31, 2025, 2024 and 2023, sales to Costco accounted for 11% of consolidated net sales, respectively.

During the year ended December 31, 2025, sales to TJX accounted for 11% of consolidated net sales.

Sales to Amazon and TJX are included in the Company’s U.S.

and International segments.

Sales to Walmart and Costco are included in the Company’s U.S.

No other customers accounted for 10% or more of the Company’s sales during these periods.

A material reduction in sales to the aforementioned or other top customers in the aggregate, could have a significant adverse effect on the Company’s business and operating results.

In addition, pressures by such customers that would cause the Company to materially reduce the price of its products could result in reduced sales and operating margin.

A material reduction in sales to the aforementioned or other top customers in the aggregate, could adversely affect the Company’s business and operating results.

Large customers may seek price reductions, extended payment terms, promotional support or other concessions, which could reduce margins.

Any significant changes or financial difficulties that affect these customers, such as reduced sales by such customers (whether for reasons that affect a particular customer or the retail industry in general) may also result in reduced demand for the Company’s products.

The Company would also be subject to increased credit risk with respect to such customers.

In particular, the concentration of the Company’s business with Walmart, Costco and Amazon extends to its international business as well as through the Company’s strategic alliance in Canada, due to the market presence of Walmart, Costco and Amazon in these foreign countries.

Any changes in purchasing practices or decline in the financial condition, of Walmart, Costco and Amazon or other large customers, may have a material adverse impact on the business, results of operations and financial condition of the Company.

In particular, the concentration of the Company’s business with Walmart, Costco, Amazon and TJX extends to its international business as well as through the Company’s strategic alliance in Canada, due to the market presence of Walmart, Costco, Amazon and TJX in these foreign countries.

Any changes in purchasing practices or decline in the financial condition, of Walmart, Costco, Amazon and TJX or other large customers, may have a material adverse impact on the business, results of operations and financial condition of the Company.

The Company’s large customers also have significant purchasing leverage.

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This overall trend has negatively affected many brick-and-mortar retailers.

If the Company’s brick-and-mortar retail customers fail to maintain or grow their overall market position through the

integration of physical retail presence and digital retail, these customers may experience financial difficulties including store closures, bankruptcies or liquidations.

If the Company’s brick-and-mortar retail customers fail to maintain or grow their overall market position through the integration of physical retail presence and digital retail, these customers may experience financial difficulties including store closures, bankruptcies or liquidations.

This could, in turn, substantially reduce the Company’s revenues, increase credit risk and have a material adverse effect on the Company’s results of operations, financial condition and cash flows.

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changes in required technology interfaces, website downtime and other technical failures, costs and technical issues as the Company upgrades its website software, computer viruses, changes in applicable federal and state regulations, security breaches, data breaches, and consumer privacy concerns.

In addition, the Company must keep up to date with competitive technology trends, including the use of improved technology, creative user interfaces and other online marketing tools such as paid search, which may increase its costs and which may not succeed in increasing sales or attracting customers.

In addition, the Company must keep up to date with competitive technology trends, including the use of improved technology, artificial intelligence-driven search or recommendation platforms, creative user interfaces and other online marketing tools such as paid search, which may increase its costs and which may not succeed in increasing sales or attracting customers.

The Company’s failure to successfully respond to these risks and uncertainties might adversely affect the sales in its online business, as well as damage the Company’s reputation and brands.

Demand for new products and the inability to develop and introduce new competitive products at favorable profit margins could adversely affect the Company’s performance and prospects for future growth.

New product introductions and product innovation are significant contributors to the Company’s growth strategy and the Company’s long-term success in the competitive retail environment depends in part on the Company’s ability to develop and market a continuing stream of innovative new products that meet changing consumer preferences.

The uncertainties associated with developing and introducing new products, such as the market demands and the costs of development and production may impede the successful development and introduction of new products.

Acceptance of the new products may not meet sales expectations due to several factors, such as the Company’s failure to accurately predict market demand or its inability to resolve technical issues in a timely and cost-effective manner.

New product introductions and product innovation are significant contributors to the Company’s growth strategy.

The Company’s long-term success in the competitive retail environment depends in part on the Company’s ability to develop and market a continuing stream of innovative new products that meet changing consumer preferences.

The uncertainties associated with developing and introducing new products, such as market demands and the costs of development and production may impede the successful development and introduction of new products.

Acceptance of new products may not meet sales expectations due to several factors, such as the Company’s failure to accurately predict market demand or its inability to resolve technical issues in a timely and cost-effective manner.

Additionally, the inability to develop new products on a timely basis could result in the loss of business to competitors.

Supply chain risks

The Company’s reliance on international suppliers subject the Company to regional regulatory, man-made or natural disasters, health epidemics, political or military conflicts, economic and foreign currency exchange risk that could materially and adversely affect the Company’s operating results.

The Company sources its products from suppliers located principally in Asia, Europe and the United States, which subjects the Company to various risks, including man-made or natural disasters, adverse macroeconomic conditions (including inflation, slower growth, and recession), and foreign currency changes, all of which could create disruptions in our supply chain.

Similarly, geopolitical risks, including instability resulting from civil unrest, political demonstrations, strikes and armed conflict or other crises, such as conflicts in Ukraine, Israel and surrounding areas (and any broadening of the conflict), and resulting sanctions could change the global supply chain dynamics and demand.

The Company’s reliance on international suppliers subjects the Company to regional regulatory, man-made or natural disasters, health epidemics, political or military conflicts, economic and foreign currency exchange risk that could materially affect the Company’s operating results.

Similarly, geopolitical risks, including instability resulting from civil unrest, political demonstrations, strikes and armed conflict or other crises, such as conflicts in Ukraine, the Middle East and surrounding areas (and any broadening of the conflict), and resulting sanctions could change the global supply chain dynamics and demand.

Additionally, the Company’s vendors in Asia, from whom a substantial majority of the Company’s products are sourced, are located primarily in China, which subjects the Company to regional risks including regulatory, social and other risks in addition to the risks resulting from tensions between the United States and China involving trade policies and certain regulatory actions.

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Changes in labor or other laws may be enacted, in China or in other countries in which the Company does business, which could have a material adverse effect on the Company’s operations and/or those of the Company’s suppliers.

In addition, any indirect supply chain disruptions due to the conflict in Ukraine, Israel and surrounding areas (and any broadening of the conflict), may further complicate existing supply chain constraints.

Specifically, in connection with the conflict in Israel and the surrounding areas, the Houthi movement, which controls parts of Yemen, has launched a number of attacks on marine vessels in the Red Sea.

The Red Sea is an important maritime route for international trade.

As a result of such disruptions, the Company may experience in the future extended lead times, delays in supplier deliveries, and increased freight costs.

Disruptions in maritime trade routes or other transportation channels could result in extended lead times, delivery delays and increased freight costs.

The risk of ongoing supply disruptions may further result in delayed deliveries of our products.

Changes in currency exchange rates might negatively affect the Company and its overseas vendors’ profitability and business prospects.

The Company does not have access to its vendors’ financial information and the Company is unable to assess its vendors’ financial condition, including their liquidity.

The Company does

not have access to its vendors’ financial information and the Company is unable to assess its vendors’ financial condition, including their liquidity.

Interruption of supplies from any of the Company’s vendors, or the loss of one or more key vendors, could have a negative effect on the Company’s business and operating results.

A disruption in deliveries to or from suppliers or decreased availability of materials could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs.

A disruption from such third‑party suppliers,

manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and products could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.

A disruption from such third‑party suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and products could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.

The Company’s international trade activity subjects it to transportation risks.

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These risks include, but are not limited to, increases in fuel costs, fuel shortages, the availability of ships, increased security restrictions, transportation reroutes in response to geopolitical conflict, work stoppages, weather disruptions and carriers’ ability to provide delivery services to meet the Company’s shipping needs.

Port congestion or other disruptions affecting major shipping lanes or ports may also delay deliveries.

Transportation disruptions and increased transportation costs could materially adversely affect the Company’s business, results of operations and financial condition.

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The loss of significant licenses or a material increase in the royalty rates the Company pays or other new terms negotiated upon renewal of such licenses could result in a reduction of the Company’s operating margins and cash flow from operations or otherwise adversely affect its business.

The Company holds certain rights to use the Farberware brand for kitchen tools, cutlery, cutting boards, shears and certain other products which together represent a material portion of its sales, through a fully-paid, royalty-free license for a term that expires in 2195, subject to earlier termination under certain circumstances.

2195, subject to earlier termination under certain circumstances.

The licensor is a joint venture of which the Company is a 50% owner.

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The Company cannot guarantee that the operation of its business does not infringe or otherwise violate the intellectual property rights of third parties, and the Company’s intellectual property rights may be challenged by third parties or invalidated through administrative process or litigation.

Third parties may assert infringement or other intellectual property claims against the Company, which could result in costly litigation, settlements, licensing arrangements or restrictions on the manufacture, marketing or sale of certain products.

The costs associated with protecting intellectual property rights, including costs associated with litigation or administrative proceedings, may be material and there can be no assurance that any such litigation or administrative proceedings will be successful.

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If the Company is unable to establish or adequately protect its intellectual property rights, the Company’s business, financial condition and results of operations could be materially and adversely affected.

If the Company is unable to protect the confidentiality of its proprietary information and know-how, the value of the Company’s technology, products and services could be harmed significantly.

If the Company is unable to protect the confidentiality of its proprietary information and know-how, the value of the Company’s technology, products and services could be materially adversely affected.

In addition to registered intellectual property, the Company relies on know-how and other proprietary information in operating its business.

If this information is not adequately protected, then it may be disclosed or used in an unauthorized manner.

To the extent that consultants, vendors, key employees or other third parties apply technology independently developed by them or by others to the Company’s proposed products in the absence of a valid license or suitable non-disclosure or assignment of inventions provisions, disputes may arise as to the ownership of or rights to use such technology, which may not be resolved in the Company’s favor.

To the extent that

consultants, vendors, key employees or other third parties apply technology independently developed by them or by others to the Company’s proposed products in the absence of a valid license or suitable non-disclosure or assignment of inventions provisions, disputes may arise as to the ownership of or rights to use such technology, which may not be resolved in the Company’s favor.

If other parties breach confidentiality or other agreements, or if the Company’s registered intellectual property is not protected in the U.S.

or foreign jurisdictions, this could harm the Company by enabling the Company’s competitors and other entities, who may have greater

experience and financial resources, to copy or use the Company’s proprietary information in the advancement of their products, methods or technologies.

or foreign jurisdictions, this could harm the Company by enabling the Company’s competitors and other entities, who may have greater experience and financial resources, to copy or use the Company’s proprietary information in the development of their products, methods or technologies.

The Company’s brands are subject to reputational risks and damage to the Company’s brands or reputation could adversely affect its business.

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The Company’s ability to attract and retain customers depends, in part, upon external perceptions of the Company, the quality of its products and its corporate and management integrity.

The consumer goods industry is by its nature more prone to reputational risks than other industries.

This has been compounded in recent years by the free flow of unverified information on the Internet and, in particular, on social media.

Damage to the Company’s brands or reputation or negative publicity or perceptions about the Company could adversely affect its business.

Consumer-facing businesses are particularly vulnerable to reputational harm, as negative perceptions can rapidly influence purchasing decisions and retailer relationships.

Reputational harm may arise from a variety of sources, including product quality issues, recalls, litigation, regulatory actions, allegations regarding labor or sourcing practices, data security incidents, public statements by employees or third parties, or changes in consumer sentiment.

The rapid and widespread dissemination of information through social media, digital platforms and online marketplaces may amplify negative publicity, whether accurate or not, and may limit the Company’s ability to effectively respond.

Damage to the Company’s brands or reputation, negative publicity or adverse perceptions about the Company could reduce consumer demand, lead to the loss of retail shelf space or online visibility, increase promotional spending, or otherwise adversely affect the Company’s business, results of operations and financial condition.

Operational and regulatory risks

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The Company conducts business outside of the United States through subsidiaries, affiliates and joint ventures.

These entities have operations and assets in the U.K., Mexico, Netherlands, Canada, China and Hong Kong.

These entities have operations and assets in the U.K., the Netherlands, Canada, China, Hong Kong, Australia, New Zealand and Mexico.

Therefore, the Company is subject to increases and decreases in its investments in these entities resulting from the impact of fluctuations in foreign currency exchange rates.

These entities also bear risks similar to those risks faced by the Company.

However, there are specific additional risks related to these organizations, such as the failure of the Company’s partners or other investors to meet their obligations and higher credit and liquidity risks related to thinly capitalized entities.

These entities also bear risks similar to those faced by the Company.

However, there are additional risks related to these operations, including the failure of the Company’s partners or other investors to meet their obligations, governance or compliance failures, and higher credit and liquidity risks related to thinly capitalized entities.

Failure of these entities or the Company’s vendors to adhere to required regulatory or other standards, including social compliance standards, could materially and adversely impact the Company’s reputation and business.

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Accordingly, the Company is subject to various risks, including:

• U.S.-imposed embargoes of sales to specific countries;

• U.S.-imposed embargoes and sanctions on sales to specific countries;

• foreign import controls (which may be arbitrarily imposed or enforced);

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• expropriation of assets;

• war, civil uprisings and riots;

• war, civil unrest and riots;

• government instability;

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• difficulties in managing a global enterprise;

Any significant violations of regulations or the occurrence of the events listed above could result in civil or criminal sanctions or the loss of export or other licenses, which could have a material adverse effect on the Company’s business, results of operations and financial condition.

• data protection, privacy and anti-corruption compliance requirements that may impose significant costs and penalties for non-compliance.

Any significant violations of regulations or the occurrence of the events listed above could result in civil or criminal sanctions, monetary fines, reputational harm, or the loss of export or other licenses, which could have a material adverse effect on the Company’s business, results of operations and financial condition.

In addition, the Company’s organizational structure may limit its ability to transfer funds between countries, particularly into and out of the United States, without incurring adverse tax consequences.

Regulatory restrictions may also limit the Company’s ability to transfer funds in certain jurisdictions.

Any of these events could result in a loss of business or other unexpected costs that could reduce sales or profits and have a material adverse effect on the Company’s financial condition, results of operations and cash flows.

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These existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services.

These regulations and laws may cover taxation, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services, broadband residential Internet access and the characteristics and quality of products and services.

These regulations and laws may cover taxation, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications,

consumer protection, the provision of online payment services, broadband residential Internet access and the characteristics and quality of products and services.

It is not clear how existing laws governing issues such as property ownership, sales and other taxes, and personal privacy apply to the Internet and e-commerce.

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Wayfair, Inc.

et al reversed longstanding precedent that remote sellers are not required to collect state and local sales taxes and established that a state may enforce or adopt laws requiring online retailers to collect and remit sales tax if there is a substantial nexus between the online retailer’s activity and the state, even if the retailer has no physical presence within the taxing state.

While the Company now collects, remits and reports sales tax in states that it does business, it is possible that Company’s effective income tax rate, the cost of the Company’s e-commerce business, and the growth of its e-commerce business could be materially adversely effected other new laws or regulations governing the Internet and e-commerce.

et al reversed the longstanding precedent that remote sellers are not required to collect state and local sales taxes and established that a state may enforce or adopt laws requiring online retailers to collect and remit sales tax if there is a substantial nexus between the online retailer’s activity and the state, even if the retailer has no physical presence within the taxing state.

While the Company now collects, remits and reports sales tax in states in which it does business, it is possible that Company’s effective income tax rate, the cost of the Company’s e-commerce business, and the growth of its e-commerce business could be materially adversely affected by other new laws or regulations governing the Internet and e-commerce.

This potential negative impact on the Company’s e-commerce business could have a material adverse effect on the Company’s overall business, results of operations and financial condition.

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In January 2025, the Company announced the relocation of its East Coast distribution facility currently located in Robbinsville, NJ (the “Robbinsville Facility”) to a warehouse and distribution space in Hagerstown, Maryland (the “Hagerstown Facility”).

The Hagerstown Facility is a new built to suit distribution center and will require an investment of capital expenditures of approximately $10 million for equipment and certain leasehold improvements.

The Company expects to incur one-time costs to close its Robbinsville Facility of up to $7 million as well as one-time relocation costs of up to $7 million.

The Hagerstown Facility is a new built to suit distribution center and the Company estimates it will require an investment of capital expenditures of approximately $9.3 million for equipment and certain leasehold improvements, of which $2.3 million has been incurred during fiscal 2025.

The Company expects to incur exit costs of approximately $7 million as well as start-up costs of approximately $7 million.

Additionally, the Company’s purchases that are to be delivered this new distribution facility will require the Company to arrange for transportation, primarily by sea, from ports in Asia and Europe to a new port in the United States.

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The Company employs information technology systems and operates websites which allow for the secure storage and transmission of proprietary or confidential information regarding the Company’s customers, employees and others, including credit card information and personal identification information.

The Company has made significant efforts to secure its computer network to mitigate the risk of possible cyber-attacks, including, but not limited to, data breaches, and is continuously working to upgrade its existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches.

Despite our continuous efforts to ensure the security of the Company’s computer networks, any future cyber incidents could compromise our information technology systems, which could impact operations and confidential information could be misappropriated.

The Company has made significant efforts to secure its computer network to mitigate the risk of possible cyber-attacks, including, but not limited to, data breaches, and is continuously working to upgrade its existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks in an effort to protect against cybersecurity threats and security breaches.

Despite these efforts, any future cyber incidents could compromise the Company’s information technology systems, disrupt operations, result in the loss, theft or misuse of confidential or personal information, and adversely affect the Company’s ability to process transactions and fulfill orders.

Additionally, as Artificial Intelligence ("AI") continues to evolve, cyber-attackers could also use AI to develop malicious code and sophisticated phishing attempts.

Although we believe that we have robust information security procedures, controls and other safeguards in place, as cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate information security vulnerabilities.

Cybersecurity incidents may also arise from vulnerabilities in third-party service providers, including cloud service providers, payment processors, logistics providers and other vendors upon which the Company relies.

Any cybersecurity incidents could lead to negative publicity, loss of sales and profits or cause the Company to incur significant costs to reimburse third- parties for damages, which could adversely impact profits.

Additionally, the Company must comply with increasingly complex and rigorous regulatory standards enacted to protect businesses and personal data, including the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act.

GDPR is a comprehensive European Union privacy and data protection reform, effective in 2018, which applies to companies that are organized in the European Union or otherwise provide services to consumers who reside in the European Union, and imposes strict standards regarding the sharing, storage, use, disclosure and protection of end user data and significant penalties (monetary and otherwise) for non-compliance.

The California Consumer Privacy Act, which became effective in January 2020, created new data privacy rights, including a new private right of action for data breaches and requires companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices and allow consumers to opt out of certain data sharing with third parties.

Any failure to comply with GDPR, the California Consumer Privacy Act, or other regulatory standards, could subject the Company to legal and reputational risks.

GDPR and similar international data protection laws impose strict requirements regarding the collection, use, storage, transfer and protection of personal data, and provide for significant penalties for non-compliance.

In the United States, numerous states have enacted comprehensive privacy and data protection laws, and additional states are considering similar legislation, resulting in an increasingly complex and fragmented regulatory landscape that imposes enhanced consumer rights, heightened compliance obligations, and, in

certain cases, private rights of action and statutory damages.

Any failure to comply with GDPR, U.S.

federal or state privacy and data protection laws, or other regulatory standards, could subject the Company to legal and reputational risks.

Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, damage to the Company’s reputation and credibility, and could have a material adverse effect on the Company’s business and results of operations.

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The Company’s increased dependence on third parties for cloud-based systems may also subject the Company to further cyber threats.

In addition, disruptions, outages, service interruptions or security incidents affecting cloud service providers could impair the Company’s ability to access critical systems and data.

Concentration of services with a limited number of cloud providers may increase these risks.

There can be no assurance that the Company will not suffer a material adverse effect resulting from vulnerabilities in widely deployed software used by third parties.

The rapid development and adoption of artificial intelligence technologies, including AI-driven search tools, may adversely affect our product visibility, competitive position and results of operations.

The rapid development and adoption of artificial intelligence (“AI”) technologies are transforming the retail, consumer products and e-commerce industries.

Retailers, online marketplaces and search platforms are increasingly utilizing AI-driven search and recommendation tools that influence how consumers discover and evaluate products.

Changes in these technologies may affect the visibility, ranking and prominence of our products on third-party e-commerce platforms or in online search results.

If AI-driven search or recommendation systems reduce traffic to our product listings or favor competitors’ products, our sales volumes, brand visibility and results of operations could be adversely affected.

We and our third-party service providers may also use AI tools in areas such as marketing content, demand forecasting, inventory management and product development.

AI systems may produce inaccurate, biased or otherwise flawed outputs due to deficiencies in algorithms or training data, which could result in inaccurate forecasts, operational disruptions, excess inventory or stockouts, increased costs, lost sales opportunities or reputational harm.

In addition, the use of AI presents legal, regulatory, intellectual property, cybersecurity and data privacy risks.

AI-generated outputs may infringe third-party rights or incorporate proprietary information in unintended ways, and the legal and regulatory landscape governing AI is rapidly evolving.

Compliance with new or changing requirements may increase our costs or limit our ability to deploy AI technologies effectively.

If our use of AI, or that of retailers, marketplaces or other business partners, results in operational, legal or reputational harm, our business, financial condition and results of operations could be adversely affected.

The Company sells consumer products which involve an inherent risk of product liability claims.

The marketing of certain of the Company’s consumer products involve an inherent risk of product liability claims or recalls or other regulatory or enforcement actions initiated by the U.S.

Consumer Product Safety Commission, by the Office of Fair Trading in the U.K., by other regulatory authorities or through private causes of action.

Consumer Product Safety Commission, by governmental or regulatory authorities in the United Kingdom, the European Union and other jurisdictions in which the Company’s products are sold, by other regulatory authorities or through private causes of action.

The Company has in the past, and may have in the future, recalls (both voluntary and involuntary) of its products.

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Potential product liability claims may exceed the amount of the Company’s insurance coverage (which is subject to self-insured retention amounts) and could materially damage the Company’s business and its financial condition.

In addition, the Company’s insurance policies may contain exclusions, limitations or deductibles that could limit available coverage, and coverage may not be available on commercially reasonable terms in the future.

Additionally, the Company’s product standards could be impacted by new or revised environmental rules and regulations or other social initiatives.

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The Company’s success also depends, in part, on its ability to identify, hire and retain other skilled personnel.

The Company’s industry is characterized by a high level of employee mobility and aggressive recruiting among competitors for personnel with successful track records as well as growing pressure to increase wages for skilled personnel in the industry.

The Company’s industry is characterized by a high level of employee mobility and aggressive recruiting among competitors for personnel with successful track records and increasing competition for talent, including in technology, digital commerce and logistics roles.

In addition, broader labor market conditions, including wage inflation, evolving employee expectations regarding remote or flexible work arrangements, and changing immigration or employment regulations, may further increase the Company’s costs and retention challenges.

The Company may not be able to attract and retain skilled personnel or may incur significant costs in order to do so.

Any failure to effectively manage succession planning, talent development and retention could disrupt operations, delay strategic initiatives and adversely affect the Company’s financial performance.

As a result of the Company’s prior acquisition of Filament, Taylor Parent has significant influence over the Company and its interests may conflict with the Company’s or its stockholders in the future.

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Under the Stockholders Agreement, for so long as Taylor Parent continues to beneficially own at least 50% of the shares it received at the consummation of the acquisition, neither the Company nor any of its subsidiaries may take any of the following actions without the approval of the directors designated by Taylor Parent, such approval not to be unreasonably withheld:

(i) enter into any agreement

for a transaction that would result in a change of control of the Company;

(i) enter into any agreement for a transaction that would result in a change of control of the Company;

(ii) consummate any transaction for the sale of all or substantially all of the Company’s assets;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors