What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-12 compared with 2025-03-13 · 269 added, 345 removed, 1317 unchanged (32% of the section changed)

70 unchanged sentences

33-40154 on Form S-1)(P)

10.2 Fourth Amended and Restated Employment Agreement, dated as of June 27, 2019, between the Company and Jeffrey Siegel (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 28, 2019)

10.3 First Amendment to the Fourth Amended and Restated Employment Agreement, dated as of October 11, 2019, between the Company and Jeffrey Siegel (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed October 15, 2019) *

10.2 Transition Agreement, dated as of November 1, 2022, by and among the Company and Jeffrey Siegel (incorporated by reference to Exhibit 10.3 to the Company's quarter report on Form 10-Q for the quarter ended September 30, 2022).

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10.49 Amendment No.3 to the Receivables Purchase Agreement, dated as of December 21, 2023 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser (incorporated by reference to Exhibit 10.50 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023)

10.52 Amendment No.4 to the Receivables Purchase Agreement, dated as of February 23, 2024 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser ( inc orporated by reference to Exhibit 10.51 to the Company ’ s Annual Report on Form 10-K for the year en ded D ecem ber 31, 2023)

10.53 Amendment to Option Grant Certificates, dated as of March 8, 2023 by and among the Company and Jeffrey Siegel (incorporated by reference to Exhibit 10.46 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022)

10.50 Amendment No.4 to the Receivables Purchase Agreement, dated as of February 23, 2024 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser (incorporated by reference to Exhibit 10.51 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023)

Lease Agreement, dated January 23, 2025, by and between the Company and CRP/TCC Rhoton Owner LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 29, 2025)

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José Ramón Elizondo Anaya and Mr.

Miguel Ángel Huerta Pando

19.1* Insider Trading Policy

Miguel Ángel Huerta Pando (incorporated by reference to Exhibit 10.55 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024)

19.1 Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024)

21.1* Subsidiaries of the Company

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Consolidated Statements of Operations for the Years ended December 31, 2025, 2024, and 2023

Consolidated Statements of Comprehensive Income ( Loss ) for the Years ended December 31, 2024, 2023, and 2022

Consolidated Statements of Comprehensive (Loss) Income for the Years ended December 31, 2025, 2024, and 2023

Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 2025, 2024, and 2023

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We have audited the accompanying consolidated balance sheets of Lifetime Brands, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss) , stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and for 2023 and 2022 the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income , stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and for 2023 the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We did not audit the 2023 or 2022 financial statements of Grupo Vasconia, S.A.B.

and Subsidiaries, a corporation in which the Company has a 24.7% interest.

In the consolidated financial statements, the Company’s investment in Grupo Vasconia, S.A.B.

and Subsidiaries is stated at $1.8 million as of December 31, 2023, and the Company’s equity in losses of Grupo Vasconia, S.A.B.

and Subsidiaries is stated at $ 5.8 million in 2023 and $ 3.3 million in 2022.

Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Grupo Vasconia, S.A.B.

We did not audit the 2023 financial statements of Grupo Vasconia, S.A.B.

and Subsidiaries, a corporation in which the Company had a 24.7% interest.

In the consolidated financial statements, the Company’s equity in losses of Grupo Vasconia, S.A.B.

and Subsidiaries is stated at $5.8 million in 2023.

The financial statements of Grupo Vasconia, S.A.B.

and Subsidiaries were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Grupo Vasconia, S.A.B.

and Subsidiaries, is based solely on the report of the other auditors.

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We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Estimation of Variable Consideration

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How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the estimation of variable consideration.

Among others, we tested management’s review controls over the determination of significant assumptions used in estimating the variable consideration.

We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the estimation of variable consideration related to non-contractual sales incentives and promotions.

Among others, we tested management’s review controls over the determination of significant assumptions used in estimating the variable consideration related to non-contractual sales incentives and promotions.

We also tested controls over management’s review of the completeness and accuracy of the underlying data used in the analysis.

To test the Company’s measurement of variable consideration related to the non-contractual sales incentives and promotions, our audit procedures included, among others, evaluating the Company’s methodologies, evaluating the significant assumptions described above and testing the completeness and accuracy of the underlying data used in management's analyses.

We inspected a selection of communications between the sales and finance departments that were used to support the estimation of the variable consideration.

For a sample of transactions, we performed detailed transactional testing of customer deductions to validate the timing and amount of the sales allowances recorded.

We performed corroborative inquiries of sales division executives to evaluate the ongoing sales promotions and spending needs at year end.

Additionally, we performed retrospective analyses over management’s historical estimates in order to assess the reasonableness of how the Company measures certain variable consideration discounts.

Goodwill – Quantitative Impairment Assessment

Description of the Matter

As of December 31, 2024, the Company’s intangible asset balance includes goodwill of $33.2 million.

As discussed in Note 6, the Company’s goodwill is assessed annually for impairment using either a qualitative or quantitative approach as of October 1, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.

Auditing management’s quantitative impairment test for goodwill was complex and judgmental due to the measurement uncertainty in estimating the fair value of the reporting unit.

Specifically, the fair value estimate of the Company’s U.S.

reporting unit was sensitive to assumptions including projected net sales, projected earnings before interest, tax, depreciation and amortization (“EBITDA”), and the cost of capital.

These assumptions are forward-looking and are affected by such factors as future market or economic conditions.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s valuation of the reporting unit.

This included testing management’s review controls relating to the Company’s valuation models and significant assumptions, described above.

As part of our audit, we assessed the methodologies and significant assumptions used for the purposes of performing the impairment tests, among other procedures.

We evaluated our historical experience with management’s effort in producing accurate projections of revenue growth and profitability by comparing its historical projections to the Company’s actual performance.

We tested the significant assumptions discussed above, as well as the completeness and accuracy of the underlying data used in the valuations.

We assessed the appropriateness of the Company’s projections by comparing them to market expectations.

We engaged our valuation specialists to assess the reasonableness of the cost of capital, the valuation models and significant assumptions used in the valuation of the U.S.

reporting unit.

In order to reflect the uncertainty inherent in the projections, we inspected the sensitivity analyses performed by the Company and performed our own sensitivity analyses by adjusting the significant assumptions and evaluated the potential outcome for the U.S.

reporting unit.

In addition, we tested the reconciliation of the fair value of the reporting units developed by management to the stock market capitalization of the Company as of the valuation date and evaluated the implied control premium for reasonableness.

To test the Company’s measurement of variable consideration related to the non-contractual sales incentives and promotions, our audit procedures included, among others, evaluating the Company’s methodologies, testing the completeness and accuracy of the underlying data used in management's analyses, and assessing the reasonableness of significant assumptions.

Specifically, we compared historical estimates to actual results to evaluate management’s ability to accurately estimate variable consideration discounts.

We inspected a selection of communications between the sales and finance departments used to support the estimation of non-contractual sales incentives and promotions, and for a sample of transactions, we performed detailed testing of non-contractual sales incentives and promotions to validate the timing and amount recorded We performed inquiries of sales and divisional executives to support our evaluation of the recorded non-contractual sales incentives and promotions.

/s/ Ernst & Young LLP

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Prepaid expenses and other current assets 12,147 11,488

Income taxes receivable 1,572 —

TOTAL CURRENT ASSETS 373,893 373,568

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OPERATING LEASE RIGHT-OF-USE ASSETS 48,506 59,571

INVESTMENTS — 1,826

INTANGIBLE ASSETS, net 132,922 183,527

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Selling, general and administrative expenses 142,442 159,809 152,648

Goodwill impairment 33,237 — —

Restructuring expenses 328 — 856

Wallace facility remediation expense — — 5,140

Income from operations

(Loss) income from operations

( 9,436 ) 27,084 31,941

Interest expense ( 20,030 ) ( 22,208 ) ( 21,728 )

Mark to market (loss) gain on interest rate derivatives

Mark to market loss on interest rate derivatives

( 754 ) ( 466 ) ( 499 )

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( 30,220 ) ( 9,742 ) 10,475

Income tax provision

Income tax benefit (provision)

3,283 ( 3,331 ) ( 6,222 )

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LIFETIME BRANDS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

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$ ( 26,937 ) $ ( 15,165 ) $ ( 8,412 )

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Net change in translation adjustment

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Effect of retirement benefit obligations ( 125 ) 573 ( 46 )

Other comprehensive income (loss), net of taxes

Other comprehensive income, net of taxes

270 15,184 2,355

Comprehensive income (loss)

Comprehensive (loss) income

$ ( 26,667 ) $ 19 $ ( 6,057 )

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— — — ( 8,412 ) — ( 8,412 )

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

— — — — 2,355 2,355

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Stock compensation expense — — 3,690 — — 3,690

Net exercise of stock options 25 — 233 — — 233

Shares effectively repurchased for required employee withholding taxes ( 92 ) ( 1 ) ( 537 ) — — ( 538 )

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Shares effectively repurchased for required employee withholding taxes ( 111 ) ( 1 ) ( 1,081 ) — — ( 1,082 )

Stock repurchase ( 320 ) ( 3 ) — ( 2,536 ) — ( 2,539 )

Dividends (1)

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— — — — 270 270

Performance shares issued to employees 152 2 ( 2 ) — — —

Net issuance of restricted shares granted to employees and directors 579 6 ( 6 ) — — —

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Depreciation and amortization 21,848 22,314 19,571

Goodwill impairment 33,237 — —

Amortization of financing costs 2,754 2,859 1,968

Mark to market loss (gain) on interest rate derivatives

466 499 ( 1,971 )

Gain on disposition of fixed assets ( 94 ) — —

Mark to market loss on interest rate derivatives

Operating leases, net ( 2,313 ) ( 2,010 ) ( 1,889 )

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Loss on equity securities — 14,152 —

Wallace facility remediation expense — — 5,140

Changes in operating assets and liabilities (excluding the effects of business acquisitions)

Changes in operating assets and liabilities

Accounts receivable ( 4,934 ) ( 3,206 ) ( 14,972 )

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Accounts payable, accrued expenses and other liabilities ( 25,128 ) 4,185 10,846

Income taxes receivable ( 1,572 ) — —

Income taxes payable ( 879 ) ( 592 ) 298

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Purchases of property and equipment ( 4,354 ) ( 2,227 ) ( 2,801 )

Acquisition — — ( 17,956 )

Net proceeds from sale of property 94 — —

NET CASH USED IN INVESTING ACTIVITIES

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Payments of tax withholding for stock based compensation ( 416 ) ( 1,081 ) ( 537 )

Proceeds from the exercise of stock options — — 233

Payments for stock repurchase — — ( 2,539 )

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Effect of foreign exchange on cash 203 ( 112 ) 23

DECREASE IN CASH AND CASH EQUIVALENTS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

1,338 ( 13,260 ) ( 7,409 )

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Organization and business

The Company designs, sources and sells branded kitchenware, tableware and other products used in the home and markets its products under a number of widely-recognized brand names and trademarks, which are either owned or licensed by the Company or through retailers’ private labels and their licensed brands.

The Company designs, sources and sells branded kitchenware, tableware and other home solution products used in the home and markets its products under a number of widely-recognized brand names and trademarks, which are either owned or licensed by the Company or through retailers’ private labels and their licensed brands.

The Company’s products, which are targeted primarily towards consumers purchasing moderately priced kitchenware, tableware and housewares, are sold through virtually every major level of trade.

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The accompanying consolidated financial statements include estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with U.S.

The most significant of these estimates and assumptions relate to revenue recognition, allowances for doubtful accounts, reserves for sales returns and allowances and customer chargebacks, inventory mark-down provisions, impairment of goodwill, intangible assets and long-lived assets, stock-based compensation expense, derivative valuations, accruals related to the Company’s tax positions and tax valuation allowances.

The most significant of these estimates and assumptions relate to revenue recognition (including estimates for variable consideration), allowances for doubtful accounts, reserves for sales returns and allowances and customer chargebacks, inventory mark-down provisions, impairment of goodwill, intangible assets and long-lived assets, stock-based compensation expense, derivative valuations, accruals related to the Company’s tax positions and tax valuation allowances.

Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

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Foreign currency gains and losses relating to the differences between these recorded amounts and the functional currency equivalent actually received or paid are included within selling, general and administrative expenses.

The foreign currency losses were $ 0.6 million $ 0.1 million, and $ 1.5 million for the years ended 2024, 2023, and 2022, respectively.

The foreign currency gain (loss) were $ 0.7 million, $( 0.6 ) million, and $( 0.1 ) million for the years ended 2025, 2024, and 2023, respectively.

Revenue recognition

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Wholesale sales and retail sales are primarily recognized at the point in time the customer obtains control of the products, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products.

The Company offers various sales incentives and promotional programs to its customers in the normal course of business.

These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts.

LIFETIME BRANDS, INC.

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December 31, 2025

The Company offers various sales incentives and promotional programs to its customers in the normal course of business.

These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts.

These arrangements and an estimate for products expected to be returned are reflected as reductions of revenue at the time of sale.

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Cost of sales

Cost of sales consist primarily of costs associated with the production and procurement of product, inbound freight costs, purchasing costs, duties and tariffs, royalties and other product procurement related charges.

Handling costs of products sold are also included in cost of sales.

Cost of sales consist primarily of costs associated with the production and procurement of product, inbound freight costs, purchasing costs, handling costs, duties and tariffs, royalties and other product procurement related charges.

Distribution expenses

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These deductions are primarily fixed amounts, however, in certain cases, these deductions are not fixed and, therefore, the allowance is estimated based on currently available information and historical trends of deductions.

The sales of accounts receivable, under the Company’s Receivable Purchase Agreement with HSBC, are reflected as a reduction of accounts receivable in the Company’s consolidated balance sheet at the time of sale and any related expense is included in selling, general and administrative expenses in the Company’s consolidated statements of operations.

The sales of accounts receivable, under the Company’s Receivables Purchase Agreement with HSBC, are reflected as a reduction of accounts receivable in the Company’s consolidated balance sheet at the time of sale and any related expense is included in selling, general and administrative expenses in the Company’s consolidated statements of operations.

Inventory consists principally of finished goods sourced from third-party suppliers.

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Property and equipment, other than leasehold improvements and equipment under finance leases, are depreciated using the straight-line method over the estimated useful lives of the assets.

Buildings are depreciated over 30 years, machinery and equipment and computer hardware and software are depreciated over periods ranging from 3 years to 10 years.

Buildings are depreciated over 30 years, machinery, furniture and equipment and computer hardware and software are depreciated over periods ranging from 3 years to 10 years.

Leasehold improvements are amortized over the term of the lease or the estimated useful lives of the improvements, whichever is shorter.

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Company’s customer base, however the Company’s largest customers may account for a higher percentage of the outstanding balance.

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.

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GAAP and expands disclosure requirements about fair value measurements.

Fair value measurements included in the Company’s consolidated financial statements relate to the fair value of the Vasconia investment that use Level 3 unobservable inputs as described in NOTE 5 — EQUITY INVESTMENTS, the Company’s annual goodwill and other intangible asset impairment tests that use Level 3 unobservable inputs as described in NOTE 6 — GOODWILL AND INTANGIBLE ASSETS and derivatives that use Level 2 observable inputs as described in NOTE 8 — DERIVATIVES.

Fair value measurements included in the Company’s consolidated financial statements relate to the fair value of the Vasconia investment that use Level 3 unobservable inputs as described in NOTE 5 — EQUITY INVESTMENTS, the Company’s goodwill impairment tests that use Level 3 unobservable inputs as described in NOTE 6 — GOODWILL AND INTANGIBLE ASSETS and derivatives that use Level 2 observable inputs as described in NOTE 8 — DERIVATIVES.

Fair value of financial instruments

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ASC 815 requires that all derivative instruments be recognized on the balance sheet at fair value as either an asset or liability.

Changes in the fair value of derivatives that qualify as hedges and have been designated as part of a hedging relationship for accounting purposes are included in accumulated other comprehensive loss and are subsequently recognized in the Company’s consolidated statements of operations in the same period that the hedged items are recognized in earnings.

Changes in the fair value of derivatives that qualify as cash flow hedges and have been designated as part of a hedging relationship for accounting purposes are included in accumulated other comprehensive loss and are subsequently recognized in the Company’s consolidated statements of operations in the same period that the hedged items are recognized in earnings.

Changes in fair value of derivatives that do not qualify as hedging instruments for accounting purposes are recorded in the consolidated statements of operations.

Goodwill, intangible assets and long-lived assets

Goodwill and intangible assets deemed to have indefinite lives are not amortized but, instead, are subject to an annual impairment assessment on October 1.

Goodwill is not amortized but, instead, is subject to an annual impairment assessment on October 1.

Additionally, if events or conditions were to indicate the carrying value of a reporting unit may not be recoverable, the Company would evaluate goodwill and other intangible assets for impairment at that time.

As it relates to the goodwill assessment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment testing described in the FASB’s ASC Topic 350, Intangibles – Goodwill and Other.

If, after assessing qualitative factors, the Company determines that it is more likely than not that the fair value of a reporting unit exceed its carrying amount, then no further testing is performed for that reporting unit.

If, after assessing qualitative factors, the Company determines that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then no further testing is performed for that reporting unit.

However, if based on the Company’s qualitative assessment it concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company elects to bypass the qualitative assessment, the Company will proceed with performing the quantitative impairment test.

See NOTE 6 — GOODWILL AND INTANGIBLE ASSETS for further discussion regarding goodwill impairment.

Long-lived assets, including intangible assets deemed to have finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Impairment indicators include, among other

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2025

The Company has the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test.

If the qualitative assessment determines that it is more likely than not that the fair value of the intangible asset is more than its carrying amount, then the Company concludes that the intangible asset is not impaired.

If the Company does not choose to perform the qualitative assessment, or if the qualitative assessment determines that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, then the Company calculates the fair value of the intangible asset and compares it to the corresponding carrying value.

If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized for the excess carrying value over the fair value.

See NOTE 6 — GOODWILL AND INTANGIBLE ASSETS for further discussion regarding indefinite-lived intangible asset impairment testing.

Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit or material adverse changes in the business climate that indicate that the carrying amount of an asset may be impaired.

conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit or material adverse changes in the business climate that indicate that the carrying amount of an asset may be impaired.

When impairment indicators are present, the recoverability of the asset is measured by comparing the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset.

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The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options.

The Black-Scholes option valuation model requires the input of subjective assumptions including the expected stock price volatility of the Company’s common stock and the risk-free interest rate.

The Black-Scholes option valuation model requires the input of subjective assumptions including the expected stock price volatility of the Company’s common stock and the expected dividend yield.

Changes in these subjective input assumptions can materially affect the fair value estimate of the Company’s stock options on the date of the option grant.

10 unchanged sentences

Cash-settled performance-based awards represent the right to receive up to 150 % of the target number of deferred stock units with payment in cash equivalent to the value of one share of the Company’s common stock.

The number of deferred stock units earned will

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

be determined based on the attainment of specified performance goals at the end of the performance period, as determined by the Compensation Committee of the Board of Directors.

The number of deferred stock units earned will be determined based on the attainment of specified performance goals at the end of the performance period, as determined by the Compensation Committee of the Board of Directors.

The cash-settled performance-based awards are subject to the terms and conditions of the Company’s Plan.

5 unchanged sentences

The cash-settled performance-based awards vest at the end of a three year period, as determined by the Compensation Committee.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

The Company determines if an arrangement is a lease at the inception of a contract.

10 unchanged sentences

For certain equipment leases, the Company applies a portfolio approach to effectively account for any ROU assets and lease liabilities.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet.

Variable lease payment amounts that cannot be determined at the commencement of the lease, such as increases in lease payments that do not depend on changes in index rates or payments based on usage, are not included in the ROU assets or liabilities.

These are expensed as incurred and recorded as variable lease expense.

The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized.

Employee healthcare

The Company self-insures certain portions of its health insurance plan.

The Company maintains an accrual for estimated unpaid claims and claims incurred but not yet reported (“IBNR”).

Although management believes that it uses the best information available to estimate IBNR claims, actual claims may vary significantly from estimated claims.

Restructuring expenses

Costs associated with restructuring activities are recorded at fair value when a liability has been incurred.

Generally, a liability has been incurred at the communication date for severance.

During the year ended December 31, 2023, the Company incurred $ 0.8 million of restructuring expense in connection with the termination of the Company’s Executive Chairman as described below.

In 2022, the Company’s international segment incurred $ 0.4 million of restructuring expenses related to severance associated with the reorganization of the International segment’s workforce.

The reorganization was the result of the Company’s efforts to realign the management and operating structure of the European business in response to changing market conditions.

In 2022, the Company’s U.S.

segment incurred $ 0.4 million of restructuring expense in connection with the reorganization of the U.S.

segment’s sales management structure.

The payment was made in 2023.

In 2022, the Company incurred $ 0.6 million of unallocated expense related to the termination payment with its Executive Chairman, Jeffrey Siegel.

On November 1, 2022, the Company entered into a transition agreement with Jeffrey Siegel, which terminated his employment with the Company, effective March 31, 2023.

The transition agreement amended Mr.

Siegel’s employment agreement which was to expire on December 31, 2022.

Restructuring costs are recognized at fair value when the related liability is incurred.

For severance and other employee-related costs, a liability is generally incurred on the date the restructuring plan is communicated to affected employees.

During 2025, the Company’s International segment incurred $ 0.3 million of restructuring expense related to severance associated with the reorganization of the International segment's workforce.

The reorganization was undertaken in connection with Project Concord and primarily affected the structure of the International segment's merchandising and sales workforce.

The Company expects to record approximately $ 0.7 million, of restructuring charges in connection with the Project Concord, for severance and related costs in 2026.

In 2023, the Company incurred $ 0.8 million of unallocated expense related to the termination payment with its former Executive Chairman, Jeffrey Siegel (the “Executive Chairman”).

On November 1, 2022, the Company entered into a transition agreement with its Executive chairman which terminated his employment with the Company, effective March 31, 2023.

The employment agreement provided for a one-time payment, which was paid on April 7, 2023.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The one-time payment of $ 1.4 million, was recognized over the remaining employment period with $ 0.6 million recognized in the fourth quarter of 2022 and the remaining $ 0.8 million recognized in 2023.

Hagerstown Facility

In January 2025, the Company announced the relocation of the Company’s East Coast distribution operations currently located in Robbinsville, NJ (the “Robbinsville Facility”) to Hagerstown, Maryland (the “Hagerstown Facility”).

In connection with the relocation, the Company expects to incur exit costs of approximately $ 7.0 million for employee severance, certain employee relocation costs, and remaining lease costs for the Robbinsville Facility, which costs are expected to be incurred in 2026.

Commitments and Contingencies

1 unchanged sentence

The Company recognizes liabilities for contingencies and commitments when a loss is probable and estimable.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

Adopted accounting pronouncements

In December 2024, the Company adopted Accounting Standards Update No.

(“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures:

which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements.

The Company adopted this guidance on a retrospective basis and the adoption did not have a material impact on the Company’s consolidated financial statements.

Refer to NOTE 12 — BUSINESS SEGMENTS.

New accounting pronouncements

Updates not listed below were assessed and either determined to not be applicable or are expected to have a minimal effect on the Company’s financial position, results of operations, and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated No.

(“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This guidance is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

Early adoption is permitted.

The new guidance is effective for public business entities for annual periods beginning after December 15, 2024 on a prospective basis.

Retrospective application is permitted.

Management is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

The Company adopted this ASU on a retrospective basis effective January 1, 2025.

Refer to NOTE 11 — INCOME TAXES for the inclusion of new disclosures required.

New accounting pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

17 unchanged sentences

While many of the sales incentives and promotions are contractually agreed upon with the Company’s customers, certain of the sales incentives and promotions are non-contractual and require the Company to estimate the amount of variable consideration based on historical experience and other known factors or as the most likely amount in a range of possible outcomes.

On a quarterly basis, variable consideration is assessed on a portfolio approach in

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

estimating the extent to which the components of variable consideration are constrained.

On a quarterly basis, variable consideration is assessed on a portfolio approach in estimating the extent to which the components of variable consideration are constrained.

Payment terms vary by customer, but generally range from 30 to 90 days or at the point of sale for the Company’s retail direct sales.

2 unchanged sentences

Incidental items that are immaterial in the context of the contract are expensed as incurred.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the years ended December 31, 2025, 2024 and 2023 (in thousands).

17 unchanged sentences

The Company has operating leases for corporate offices, distribution facilities, manufacturing plants, and certain vehicles.

Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets.

These are expensed as incurred and recorded as variable lease expense.

ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

3 unchanged sentences

As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The components of lease costs for the year ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

6 unchanged sentences

(1) Expenses are recorded within distribution expenses and selling, general and administrative expenses.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

Supplemental cash flow information for the year ended December 31, 2025, 2024 and 2023 were as follows (in thousands):

9 unchanged sentences

Total $ 787 $ 2,177 $ 5,718

Included in machinery, furniture and equipment as of December 31, 2024 and 2023 is $ 0.3 million and $ 0.2 million, respectively, related to assets recorded under finance leases.

Included in machinery, furniture and equipment as of December 31, 2025 and 2024 is $ 0.3 million, related to assets recorded under finance leases.

Included in accumulated depreciation and amortization at December 31, 2025 and December 31, 2024 were less than $ 0.1 million, related to assets recorded under finance leases.

12 unchanged sentences

Operating leases 6.6 % 6.6 %

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

On January 23, 2025, the Company entered into a lease agreement for a new distribution center in Hagerstown, Maryland (“Hagerstown Facility”).

The term of the lease is 180 months following the rent commencement date, which will occur in the first quarter of 2026.

The term of the lease is 180 months following the rent commencement date, which is expected to occur in the second quarter of 2026.

Base rent for the first year of the lease is $ 7.3 million, escalating by 3 % annually.

1 unchanged sentence

The lease agreement also includes a total tenant improvement allowance of $ 5.1 million.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

NOTE 4 — SALE OF ACCOUNTS RECEIVABLE

13 unchanged sentences

The Quotation Key is VASCONI.

During the second quarter of 2024, Vasconia’s shareholders’ approved a resolution to a reorganization process in terms of the Law of Commercial Bankruptcy in Mexico and subsequently a bankruptcy suit was filed against Vasconia by one of its largest suppliers.

The Company concluded that the recent events constituted a loss of significant influence and resulted in the discontinuation of the equity method of accounting.

The Company accounts for its Vasconia investment at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 321:

Investments — Equity Securities, with any changes in fair value recorded within income (loss) on equity securities on the consolidated statements of operations.

As a result of the loss of significant influence, the accumulated other comprehensive losses previously recognized under the equity method of accounting were reclassified to the carrying value of the Vasconia investment and subsequently resulted in a non-cash loss of $ 14.2 million to reduce the investment to its fair value during the three months ended June 30, 2024.

The fair value of the Vasconia investment was not material as of December 31, 2025.

Given Vasconia’s limited trading activity, recent operating results of Vasconia and impact of the bankruptcy related activity, the fair value of the Vasconia investment was measured using the income approach based on Level 3 unobservable inputs.

Given Vasconia’s limited trading activity, recent operating results of Vasconia and impacts of bankruptcy related activity, the fair value of the Vasconia investment was measured using the income approach based on Level 3 unobservable inputs.

In the second quarter of 2024, Vasconia’s shareholders’ approved a resolution to a reorganization process in terms of the Law of Commercial Bankruptcy in Mexico and subsequently a bankruptcy suit was filed against Vasconia by one of its largest suppliers.

The Company concluded that the recent events constituted a loss of significant influence and resulted in the discontinuation of the equity method of accounting.

Prior to accounting for the investment in Vasconia at fair value, equity in losses, net of taxes recognized for the years ended December 31, 2024 and 2023 in the accompanying consolidated statements of operations are as follows:

Year Ended December 31,

2024 2023 2022

(in thousands)

13 unchanged sentences

Year Ended December 31,

Gross Accumulated

Gross Impairment Accumulated

Amortization Net Gross Accumulated

1 unchanged sentence

$ 33,237 $ ( 33,237 ) $ — $ — $ 33,237 $ — $ 33,237

Indefinite - lived intangible assets:

Trade name (2)

— — — 42,000 — 42,000

Finite -lived intangible assets:

Licenses 15,847 — ( 13,021 ) 2,826 15,847 ( 12,566 ) 3,281

Trade names (2)

104,617 — ( 35,376 ) 69,241 104,459 ( 28,619 ) 75,840

3 unchanged sentences

Total $ 302,754 $ ( 33,237 ) $ ( 136,595 ) $ 132,922 $ 302,568 $ ( 119,041 ) $ 183,527

(1) The gross and net value at December 31, 2024 and 2023 reflect a reduction of $ 79.8 million impairment charges within U.S.

(1) The net value at December 31, 2025 reflect a reduction of $ 113.0 million impairment charges within U.S.

segment and $ 11.9 million impairment charges within International segment.

(2) During 2024, in connection with the annual impairment test completed as of October 1, 2024, the Company determined that one trade name, that was previously estimated to contribute to cash flows indefinitely, has a definite life.

Accordingly, the trade name, with a carrying value of $ 42.0 million, was reclassified from indefinite-lived intangible asset to a finite-lived intangible asset as of October 1, 2024.

The trade name is being amortized over an estimated useful life of 15 years.

The gross and net value at December 31, 2024 reflect a reduction of $ 79.8 million impairment charges within U.S.

segment and $ 11.9 million impairment charges within International segment.

A summary of the activities related to the Company’s intangible assets for the years ended December 31, 2025, 2024 and 2023 consists of the following (in thousands):

1 unchanged sentence

Goodwill and Intangible Assets, December 31, 2022 $ 180,650 $ 33,237 $ 213,887

Acquisition of goodwill

— 2,966 2,966

Acquisition of trade name

13,000 — 13,000

Foreign currency translation adjustment 81 — 81

6 unchanged sentences

Amortization ( 17,448 ) — ( 17,448 )

Impairment of goodwill — ( 33,237 ) ( 33,237 )

Goodwill and Intangible Assets, December 31, 2025 $ 132,922 $ — $ 132,922

9 unchanged sentences

Goodwill impairment test

The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of October 1st or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values.

The Company reviews goodwill impairment annually as of October 1st or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values.

For goodwill, impairment testing is based upon the best information available using a combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.

7 unchanged sentences

Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, an impairment charge will be recorded to reduce the reporting unit to fair value.

The Company also evaluates qualitative factors to determine whether or not its indefinite-lived intangible have been impaired and then performs quantitative tests if required.

These tests can include the relief from royalty model or other valuation models.

The significant assumptions used in the relief from royalty model are future net sales for the related brand, royalty rate and the cost of capital to determine the fair value of the indefinite lived intangible.

Projected net sales for the related brand and royalty rate were determined to be significant assumptions because they are the primary drivers of the projected cash flows in the relief from royalty model.

Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows.

International Reporting Unit

1 unchanged sentence

Reporting Unit

The Company performed its annual impairment assessment of its U.S.

reporting unit as of October 1, 2024 by comparing the fair value of the reporting unit with its carrying value.

The Company performed the analysis using a discounted cash flow and market multiple method.

As of October 1, 2024, the fair value of the U.S.

reporting unit exceeded the carrying value of goodwill by 5.4 %.

Management’s projections used to estimate the cash flows included organic net sales growth and net sales growth through new customer channels as well as continued operating efficiencies in future periods.

Changes in any of the significant assumptions used in the valuation of the reporting unit, including projected net sales, projected EBITDA and cost of capital could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

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.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2025

As of December 31, 2024, the Company assessed the carrying value of goodwill and determined, based on qualitative factors, that no impairment indicators existed for goodwill.

Annual indefinite-lived trade name impairment test

The Company values its indefinite-lived trade name using a relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company.

The Company bypassed the optional qualitative impairment analysis for its indefinite-lived trade name asset annual October 1, 2024 impairment test.

The Company completed the quantitative impairment analysis by comparing the fair value of the indefinite-lived trade name to its carrying value using a relief from royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company.

The Company determined that the fair value exceeded its carrying value as of October 1, 2024, and therefore the indefinite-lived intangible asset was not impaired.

As of October 1, 2024, the fair value of the Company’s indefinite-lived trade name exceeded its carrying value by 2.4 %.

In connection with the annual impairment analysis, the Company determined that the trade name, previously estimated to contribute to cash flows indefinitely, has a definite life.

Accordingly, the trade name was reclassified from indefinite-lived to finite-lived or amortizable intangible asset as of October 1, 2024.

The trade name will be amortized over an estimated useful life of 15 years.

NOTE 7 — DEBT

13 unchanged sentences

The Incremental Facilities may not exceed the sum of (i) $ 50.0 million plus (ii) an unlimited amount so long as, in the case of (ii) only, the Company’s secured net leverage ratio, as defined in and computed on a pro forma basis pursuant to the Term Loan, after giving effect to such increase, is no greater than 3.25 to 1.00, subject to certain limitations and for the period defined pursuant to the Term Loan but not to mature earlier than the maturity date of the then existing term loans.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

As of December 31, 2025 and 2024, the total availability under the ABL Agreement were as follows (in thousands):

5 unchanged sentences

Total availability under the ABL Agreement $ 119,919 $ 124,808

Availability under the ABL Agreement is limited to the lesser of the $ 200.0 million commitment thereunder and the borrowing base and therefore depends on the valuation of certain current assets comprising the borrowing base.

Availability under the ABL Agreement is limited to the lesser of the $ 200.0 million commitment and the borrowing base and therefore depends on the valuation of certain current assets comprising the borrowing base.

The borrowing capacity under the ABL Agreement will depend, in part, on eligible levels of accounts receivable and inventory that fluctuate regularly.

Due to the seasonality of the Company’s business, the Company may have greater borrowing availability during the third and fourth quarters of each year.

Consequently, the $ 200.0 million commitment thereunder may not represent actual borrowing capacity.

Consequently, the $ 200.0 million commitment may not represent actual borrowing capacity.

The Company’s borrowing capacity may be further limited by the Term Loan financial covenant of 5.00 to 1.00 maximum Total Net Leverage Ratio.

1 unchanged sentence

The current and non-current portions of the Company’s Term Loan included in the consolidated balance sheets were as follows (in thousands):

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

December 31, 2025 December 31, 2024

7 unchanged sentences

Total Non-current portion of Term Loan $ 125,927 $ 130,949

The estimated 2024 excess cash flow payment of $ 1.3 million will be applied to the 2025 scheduled quarterly payments of the Term Loan, per the terms of the debt agreement.

As of December 31, 2025, the Company estimates no excess cash flow payment will be due for 2025.

The 2024 excess cash flow payment of $ 1.2 million was paid on April 4, 2025 and reduced the scheduled quarterly payment due on June 30, 2025.

As of December 31, 2025, the future principal payments of the Term Loan are as follows (in thousands):

5 unchanged sentences

subsidiary guarantors, subject to certain exceptions.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

the Term Loan and (2) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “Term Loan Collateral”) pledged as collateral in favor of lenders under the Term Loan and a second-priority lien in the Term Loan Collateral in favor of the lenders under the ABL Agreement.

Such security interests consist of (1) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “ABL Collateral”) pledged as collateral in favor of lenders under the ABL Agreement and a second-priority lien in the ABL Collateral in favor of the lenders under the Term Loan and (2) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “Term Loan Collateral”) pledged as collateral in favor of lenders under the Term Loan and a second-priority lien in the Term Loan Collateral in favor of the lenders under the ABL Agreement.

Borrowings under the revolving credit facility bear interest, at the Company’s option, at one of the following rates:

8 unchanged sentences

The interest rate on outstanding borrowings under the Term Loan at December 31, 2025 was 9.35 %.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

The Debt Agreements provide for customary restrictions and events of default.

3 unchanged sentences

The Company was in compliance with the covenants of the Debt Agreements at December 31, 2025.

On June 8, 2023, the Company completed the repurchase of $ 47.2 million in principal amount of the Term Loan, for $ 95 per $ 100 of principal.

The repurchase was executed by way of a reverse Dutch auction, pursuant to and in accordance with the terms and conditions provided for in the Term Loan.

In connection therewith, debt issuance costs of $ 0.5 million were written off and fees of $ 0.4 million were incurred.

The gain on the early retirement of the Term Loan was $ 1.5 million, net of fees and expenses.

In connection with the Term Loan Amendment, the Company reduced its outstanding principal by a net amount of $ 48.7 million through a voluntary prepayment of principal (in accordance with the terms of the original Term Loan Agreement), net of the issuance of new proceeds and an extension of a portion of existing Term Loan.

In connection with the Term Loan Amendment that Company incurred fees of $ 9.1 million, which will be amortized over the life of the debt using the effective interest method.

The Company recognized a loss of $ 0.7 million of unamortized debt issuance costs on the partial extinguishment for the portion of the Term Loan that was repaid.

Other Credit Agreements

A subsidiary of the Company holds a credit facility (“HSBC Facility”) with HSBC Bank (China) Company Limited, Shanghai Branch (“HSBC”) for up to $ 10.0 million Chinese renminbi ($ 1.4 million).

The HSBC Facility is subject to annual renewal and may be used to fund general working capital needs of the Company’s subsidiary, which is a trading company in China.

A subsidiary of the Company holds a credit facility with HSBC Bank (China) Company Limited, Shanghai Branch (“HSBC China Facility”) for up to $ 10.0 million Chinese renminbi ($ 1.4 million).

In addition, another subsidiary holds a credit facility with Hongkong and Shanghai Banking Corporation Limited (“HSBC Hong Kong Facility” and together with the HSBC China Facility, the “HSBC Facilities”) for up to $ 5.0 million.

The HSBC Facilities are subject to annual renewal and may be used to fund general working capital needs of the Company’s subsidiaries, which operate as trading companies in China and Hong Kong.

Borrowings under the HSBC Facility were guaranteed by the Company and were granted at the sole discretion of HSBC.

No borrowings were outstanding under the HSBC Facility at December 31, 2024 and 2023.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

No borrowings were outstanding under the HSBC Facilities at December 31, 2025 and 2024.

NOTE 8 — DERIVATIVES

The Company’s risk management strategy includes the use derivative financial instruments to manage its exposure to interest rate movements and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates primarily to offset the earnings impact related to inventory purchases.

The Company’s risk management strategy includes the use of derivative financial instruments to manage its exposure to interest rate movements and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates primarily to offset the earnings impact related to inventory purchases.

The Company does not enter into derivative transactions for trading purposes.

9 unchanged sentences

These interest rate swaps involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

In June 2019 the Company entered into interest rate swap agreements, with an aggregate notional value of $ 25.0 million and expire in February 2025.

In March 2024 and October 2024, the Company entered into new interest rate swap agreements, each with an aggregate notion value of $ 25.0 million and expire in August 2027.

These non-designated interest rate swaps serve as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings.

These interest rate swaps have not been designated as accounting hedges and are intended to serve as cash flow hedges to economically hedge the Company’s exposure to the variability in interest payments on a portion of its Term Loan borrowings.

Accordingly, changes in fair value are recognized in earnings in the period incurred.

The Company’s total outstanding notional value of interest rate swaps was $ 50.0 million at December 31, 2025.

The Company’s interest rate swaps that were designated as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings expired in March 2023.

The Company has no designated interest rate swaps at December 31, 2024.

Foreign Exchange Contracts

2 unchanged sentences

The Company purchases foreign currency forward contracts with terms less than 18 months.

The aggregate gross notional values of foreign exchange contracts at December 31, 2024 and 2023 was $ 8.0 million and $ 9.8 million, respectively.

The aggregate gross notional value of foreign exchange contracts at December 31, 2025 and 2024 were zero and $ 8.0 million, respectively.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

The fair values of the Company’s derivative financial instruments included in the consolidated balance sheets are presented as follows (in thousands):

1 unchanged sentence

Foreign exchange contracts Prepaid expenses and other current assets $ — $ 256

Accrued expenses — 144

Derivatives not designated as hedging instruments Balance Sheet Location 2025 2024

2 unchanged sentences

Other long-term liabilities 428 154

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The fair value of the interest rate swaps have been obtained from the counterparties to the agreements and were based on Level 2 observable inputs using proprietary models and estimates about relevant future market conditions.

The fair value of the foreign exchange contracts were based on Level 2 observable inputs using quoted market prices for similar assets in an active market.

The amounts of the gains and (losses), realized and unrealized, net of taxes, related to the Company’s derivative financial instruments designated as hedging instruments are recognized in other comprehensive income (loss) as follows (in thousands):

Year ended December 31,

3 unchanged sentences

Total $ ( 291 ) $ 381 $ ( 1,057 )

Realized gains and losses on the interest rate swaps that are reported in other comprehensive income (loss) are reclassified into earnings as the interest expense on the debt is recognized.

Realized gains and losses on foreign exchange contracts that are reported in other comprehensive income (loss) are reclassified into cost of sales as the underlying inventory purchased is sold.

Realized gains and losses on the interest rate swaps that are reported in other comprehensive income are reclassified into earnings as the interest expense on the debt is recognized.

Realized gains and losses on foreign exchange contracts that are reported in other comprehensive income are reclassified into cost of sales as the underlying inventory purchased is sold.

During the year ended December 31, 2025, the Company reclassified $ 0.2 million of cash flow hedges in accumulated other comprehensive losses to earnings, related to foreign exchange contracts recognized in cost of sales.

At December 31, 2024, the estimated amount of existing net gains expected to be reclassified into earnings within the next 12 months was $ 0.2 million.

During the year ended December 31, 2023, the Company reclassified $ 0.5 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This comprised of a charge of $ 0.1 million related to interest rate swaps recognized in interest expense and a gain of $ 0.4 million related to foreign exchange contracts recognized in cost of sales.

At December 31, 2025, the estimated amount of existing net losses expected to be reclassified into earnings within the next 12 months was less than $ 0.1 million.

During the year ended December 31, 2024, the Company reclassified $ 0.2 million of cash flow hedges in accumulated other comprehensive losses to earnings, related to foreign exchange contracts recognized in cost of sales.

The amounts of the gains and losses related to the Company’s derivative financial instruments not designated as hedging instruments are recognized in earnings as follows (in thousands):

Year Ended December 31,

Derivatives not designated as hedging instruments Location of gain (loss) 2024 2023 2022

Derivatives not designated as hedging instruments Location of (loss) gain 2025 2024 2023

Interest rate swaps Mark to market (loss) gain on interest rate derivatives $ ( 754 ) $ ( 466 ) $ ( 499 )

11 unchanged sentences

$ 0.0425 August 6, 2024 November 1, 2024 November 15, 2024

$ 0.0425 November 7, 2023 February 1, 2024 February 15, 2024

$ 0.0425 November 5, 2024 January 31, 2025 February 14, 2025

$ 0.0425 March 11, 2025 May 1, 2025 May 15, 2025

$ 0.0425 June 18, 2025 August 1, 2025 August 15, 2025

$ 0.0425 August 6, 2024 November 1, 2024 November 15, 2024

$ 0.0425 August 5, 2025 October 31, 2025 November 14, 2025

$ 0.0425 November 4, 2025 January 30, 2026 February 13, 2026

3 unchanged sentences

The repurchase authorization permits the Company to effect repurchases from time to time through open market purchases and privately negotiated transactions.

No shares were repurchased during the year ended December 31, 2024.

No shares were repurchased during the year ended December 31, 2025 and 2024.

During the year ended December 31, 2023, the Company repurchased 320,204 shares for a total costs of $ 2.5 million, and thereafter retired the shares.

During the year ended December 31, 2022, the Company repurchased 597,195 shares for a total costs of $ 6.3 million.

As of December 31, 2025, the remaining dollar amount available for repurchases under the Board authorized plan was $ 11.1 million.

3 unchanged sentences

The Company’s Amended and Restated 2000 Long-Term Incentive Plan (the “Plan”) provides for the granting of awards of up to 9,717,500 shares of common stock.

On June 20, 2024, the stockholders of the Company approved an amendment and restatement of the Plan.

The amendment and restatement of the Plan revised the terms and conditions of the Plan to, among other things, increase the shares available for grant under the Plan by 1,500,000 shares to 9,717,500 shares.

These shares of the Company’s common stock are available for grants to directors, officers, employees, consultants and service providers and affiliates in the form of stock options or other equity-based awards.

The Plan authorizes the Board of Directors of the Company, or a duly appointed committee thereof, to issue incentive stock options, non-qualified options, restricted stock, performance-based awards and other stock-based awards.

13 unchanged sentences

Options outstanding at December 31, 2024 782,500 $ 11.41

Grants 56,000 11.45

Exercises ( 60,000 ) 11.64

Cancellations ( 11,375 ) 11.16

Expirations ( 13,450 ) 13.99

Options outstanding at December 31, 2025 (1)

Grants 50,000 5.92

Cancellations ( 4,375 ) 11.27

Expirations ( 111,875 ) 13.38

Options outstanding at December 31, 2023 999,500 13.31

Cancellations ( 12,500 ) 9.39

Expirations ( 269,500 ) 18.09

Options outstanding at December 31, 2024 (1)

827,000 11.07 4.0 $ —

Options exercisable at December 31, 2025 700,000 $ 11.73 3.2 $ —

(1) Includes a non-plan stock option award of 15,000 stock options .

(1) Includes a non-plan stock option award of 15,000 stock options granted in 2024.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their exercisable in-the-money stock options on December 31, 2025.

The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on December 31, 2025 and the exercise price.

No stock options were exercised in the year ended December 31, 2024 and December 31, 2023.

The total intrinsic values of those stock options that were exercised in the year ended December 31, 2022 was $ 0.1 million.

No stock options were exercised in the year ended December 31, 2025, 2024 and 2023.

The intrinsic value of a stock option that is exercised is calculated at the date of exercise.

20 unchanged sentences

Vested ( 286,320 ) 9.96

Cancellations ( 6,881 ) 10.92

Non-vested restricted shares, December 31, 2022 484,143 11.79

Grants 333,300 5.37

Vested ( 212,162 ) 11.20

Cancellations ( 7,753 ) 10.86

Non-vested restricted shares, December 31, 2023 597,528 8.44

Grants 313,199 9.54

Vested ( 306,425 ) 7.53

Cancellations ( 10,776 ) 9.96

Forfeitures ( 9,979 ) 7.86

Non-vested restricted shares, December 31, 2025 885,925 $ 6.06

1 unchanged sentence

Weighted-average years expected to be recognized over 1.5

The total fair value of restricted stock that vested during the year ended December 31, 2024 was $ 2.8 million.

The total fair value of restricted stock that vested during the year ended December 31, 2025, 2024, and 2023 was $ 1.3 million, $ 2.8 million, and $ 1.2 million.

Performance shares

2 unchanged sentences

The shares are subject to the terms and conditions of the Plan.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

A summary of the Company’s performance-based award activity and related information for the three years ended December 31, 2025 is as follows:

2 unchanged sentences

Grants 331,561 5.13

Achieved performance over target (2)

Vested ( 166,935 ) 9.20

Cancellations ( 4,128 ) 10.64

Non-vested performance-based awards, December 31, 2022 400,302 11.56

Grants 191,075 5.92

Achieved performance over target (3)

Vested ( 119,739 ) 6.36

Cancellations ( 1,608 ) 12.25

Non-vested performance-based awards, December 31, 2023 486,972 10.44

Grants 219,975 9.76

Vested ( 152,188 ) 14.18

Cancellations ( 25,352 ) 13.08

Forfeitures (3)

( 130,171 ) 11.91

Non-vested performance-based awards, December 31, 2025 (4)

5 unchanged sentences

These awards vested in the three months ended March 31, 2023.

(3) Represents the number of shares earned over target for performance-based awards granted in 2020 based on performance goals attained.

These awards vested in the three months ended March 31, 2023.

(3) Includes the forfeiture of performance-based awards granted in 2022 as the performance metric was not attained.

(4) The performance metric for the performance-based awards granted in 2023 was not attained at the end of the performance period.

Therefore, no compensation expense has been recorded on these awards and these awards will not vest.

The total fair value of performance-based awards that vested during the year ended December 31, 2024 was $ 1.5 million.

There were no performance-based awards that vested during the year ended December 31, 2025, the total fair value of performance-based awards that vested during the year ended December 31, 2024, and 2023 was $ 1.5 million and $ 0.7 million.

On March 9, 2026, the Compensation Committee of the Board of Directors determined the performance goals set forth in the performance-based awards granted in 2023 were not attained.

1 unchanged sentence

Each cash-settled performance-based award represents the right to receive up to 150 % of the target number of deferred stock units with payment in cash equivalent to the value of one share of the Company’s common stock.

The cash-settled performance-based awards are subject to the terms and conditions of the Company’s Plan.

The number of deferred stock units earned

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2025

will be determined based on the attainment of specified performance goals at the end of the performance period, as determined by the Compensation Committee of the Board of Directors.

The cash-settled performance-based awards are subject to the terms and conditions of the Company’s Plan.

A summary of the Company’s cash-settled performance-based awards activity and related information for the year ended December 31, 2025 is as follows:

Cash-settled performance-based awards (1)

Non-vested cash stock unit awards, December 31, 2021

Grants 87,825 7.66

Cancellations ( 2,049 ) 10.61

Non-vested cash-settled performance-based awards, December 31, 2024

Cancellations ( 2,165 ) 6.52

Non-vested cash-settled performance-based awards, December 31, 2023

82,176 $ 5.91

Cancellations ( 82,176 ) 5.91

Non-vested cash-settled performance-based awards, December 31, 2025 (2)

82,176 $ 5.91

Total unrecognized compensation expense remaining (in thousands)

2 unchanged sentences

(2) The performance metric for the cash-settled performance-based awards granted in 2023 was not attained at the end of the performance period.

Therefore, no compensation expense has been recorded on these awards and these awards will not vest.

On March 11, 2025, the Compensation Committee of the Board of Directors determined the performance goals set forth in the cash-settled performance-based awards granted in 2022 were not attained.

Therefore, no compensation expense has been recorded on these awards.

The Company recorded stock compensation expense as follows (in thousands):

38 unchanged sentences

— ( 14,152 ) —

Total (loss) income before income taxes and equity in earnings

Total (loss) income before income taxes and equity in losses

$ ( 30,220 ) $ ( 9,742 ) $ 10,475

The provision for income taxes (before equity in losses) consists of:

The (benefit) provision for income taxes (before equity in losses) consists of:

Year Ended December 31,

5 unchanged sentences

Deferred ( 4,005 ) ( 2,039 ) ( 2,130 )

Income tax provision

Income tax (benefit) provision

$ ( 3,283 ) $ 3,331 $ 6,222

16 unchanged sentences

Section 163j interest carryforward

U.S Federal Tax Credits

Other 2,068 1,396

10 unchanged sentences

$ ( 1,554 ) $ ( 5,601 )

The Company has capital loss carryforwards of $ 7.1 million in foreign jurisdictions at December 31, 2024 that are offset entirely by a valuation allowance.

At December 31, 2024, the Company has net operating losses in foreign jurisdictions of $ 81.1 million and $ 11.6 million in state jurisdictions that are fully offset by valuation allowance, and $ 5.4 million of net operating losses in foreign jurisdictions that are not offset by valuation allowance.

Approximately $ 85.8 million of foreign net operating losses can be carried forward indefinitely.

The remaining definite-lived foreign net operating losses, if not utilized, will expire beginning in 2026 through 2034.

The state net operating losses begin to expire in 2026.

As of December 31, 2025, the Company has $ 7.6 million of capital loss carryforwards in foreign jurisdictions.

These losses can be carried forward indefinitely and are fully offset by a valuation allowance.

At December 31, 2025, the Company has net operating losses in foreign jurisdictions of $ 102.5 million and $ 11.6 million in state jurisdictions that are fully offset by valuation allowance, and $ 5.9 million in the U.S.

federal jurisdiction, $ 2.4 million in foreign jurisdictions, and $ 1.1 million in state jurisdictions that are not offset by valuation allowance.

Approximately $ 104.5 million of foreign net operating losses, $ 0.1 million of state net operating losses, and $ 5.9 million of U.S.

federal net operating losses can be carried forward indefinitely.

The remaining foreign net operating losses, if not utilized, will expire beginning in 2028.

The remaining state net operating losses will begin to expire in 2026.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2025

The provision for income taxes (before equity in losses) differs from the amounts computed by applying the applicable federal statutory rates as follows:

The (benefit) provision for income taxes (before equity in losses) differs from the amounts computed by applying the applicable federal statutory rates as follows:

Year Ended December 31,

2025 2024 2023

Federal income taxes at the statutory rate 21.0 % 21.0 % 21.0 %

Increases (decreases):

State and local income taxes, net of Federal income tax benefit ( 3.5 ) 5.7 13.9

Foreign rate differences 14.2 ( 19.7 ) 6.9

Foreign withholding tax ( 1.7 ) 5.0 6.1

Non-deductible expenses ( 5.7 ) 3.4 2.9

Non-deductible compensation

(in thousands, except percentages) Tax effect Rate impact Tax effect Rate impact Tax effect Rate impact

United States Statutory Tax Rate $ ( 6,346 ) 21.00 % $ ( 2,046 ) 21.00 % $ 2,200 21.00 %

State and Local Income Taxes, Net of Federal Income Tax Effect (1)

( 561 ) 1.86 340 ( 3.49 ) 598 5.71

Loss on equity securities

Uncertain tax positions 7.7 ( 0.9 ) 1.2

Research and development credit 3.0 ( 2.5 ) ( 5.4 )

Federal return to provision 1.0 0.7 ( 3.4 )

Equity-based compensation ( 4.7 ) 5.0 0.1

Valuation Allowance ( 15.2 ) 37.2 15.9

Provision for income taxes ( 34.2 ) % 59.4 % 63.4 %

Foreign Tax Effects

Adjustment of deferred tax liabilities 5 ( 0.02 ) 1 ( 0.01 ) 150 1.43

Other ( 5 ) 0.02 13 ( 0.14 ) ( 10 ) ( 0.10 )

Foreign rate Differential ( 17 ) 0.06 151 ( 1.55 ) 87 0.83

Other 141 ( 0.47 ) ( 5 ) 0.05 39 0.37

Foreign rate Differential — — ( 336 ) 3.44 ( 326 ) ( 3.12 )

Other — — — — — —

Book Loss on GV Investment — — 2,973 ( 30.51 ) — —

Other 31 ( 0.10 ) 27 ( 0.28 ) 10 0.10

Adjustment of deferred tax liabilities ( 32 ) 0.11 256 ( 2.63 ) 16 0.16

Change in Valuation Allowance — — ( 778 ) 7.98 ( 42 ) ( 0.40 )

Reverse 2022 TP Adjustment — — — — 111 1.06

Other ( 6 ) 0.02 ( 4 ) 0.04 4 0.04

United Kingdom

Adjustment of deferred tax liabilities ( 901 ) 2.98 ( 195 ) 2.00 ( 186 ) ( 1.77 )

Change in Valuation Allowance 3,526 ( 11.67 ) 2,821 ( 28.96 ) 3,064 29.25

Foreign rate Differential ( 420 ) 1.39 ( 420 ) 4.31 ( 461 ) ( 4.40 )

Other Disallowed Interest — — 336 ( 3.44 ) 326 3.12

Other 17 ( 0.06 ) 101 ( 1.03 ) ( 90 ) ( 0.86 )

Other foreign jurisdictions 264 ( 0.87 ) ( 62 ) 0.64 ( 55 ) ( 0.52 )

Effect of Changes in Tax Laws or Rates Enacted in the Current Period — — — — — —

Effect of Cross-Border Tax Laws

Foreign Tax Withholding 346 ( 1.15 ) 170 ( 1.75 ) 527 5.03

Other 13 ( 0.04 ) 31 ( 0.32 ) 37 0.35

R&D CREDIT ( 317 ) 1.05 ( 290 ) 2.98 ( 266 ) ( 2.54 )

Foreign Tax Credit ( 245 ) 0.81 ( 161 ) 1.66 ( 522 ) ( 4.98 )

Changes in Valuation Allowances 978 ( 3.24 ) ( 151 ) 1.55 ( 16 ) ( 0.16 )

Nontaxable or Nondeductible items

— — ( 56 ) 0.58 ( 132 ) ( 1.26 )

Non-deductible Officer's Compensation

104 ( 0.34 ) 653 ( 6.70 ) 476 4.55

Other 76 ( 0.25 ) 83 ( 0.85 ) 77 0.74

Changes in Unrecognized Tax Benefits ( 22 ) 0.07 ( 747 ) 7.67 ( 97 ) ( 0.93 )

Other Adjustments

Adjustment of deferred tax liabilities 111 ( 0.37 ) 911 ( 9.35 ) 839 8.01

Return to Provision 56 ( 0.19 ) ( 285 ) 2.91 ( 136 ) ( 1.31 )

( 79 ) 0.30 — — — —

Effective Tax Rate $ ( 3,283 ) 10.90 % $ 3,331 ( 34.20 ) % $ 6,222 59.40 %

(1) State taxes in CA and NJ made up the majority (greater than 50 percent) of the tax effect in this category.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

The estimated values of the Company’s gross uncertain tax positions at December 31, 2025, 2024 and 2023 consist of the following:

10 unchanged sentences

On a quarterly basis, the Company evaluates its tax positions and revises its estimates accordingly.

The Company believes that it is reasonably possible that an immaterial amount of its tax positions will be resolved within the next 12 months.

The Company is no longer subject to U.S.

1 unchanged sentence

The Company has identified the following jurisdictions as “major” tax jurisdictions:

Federal, California, Massachusetts, New Jersey, New York, and the United Kingdom.

Federal, California, New Jersey, New York, and the United Kingdom.

At December 31, 2025, the periods subject to examination by the Company’s major state jurisdictions are generally for the years ended 2021 through 2024.

1 unchanged sentence

As of December 31, 2025, there are no material assessments in any given year.

The following table presents cash paid for taxes (net of refunds) by jurisdiction for the year ended December 31, 2025:

Year Ended December 31,

(in thousands)

Federal taxes

United States $ 2,185

Other state jurisdictions 600

Other foreign jurisdictions 114

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

The OBBBA includes significant changes to U.S.

corporate tax provisions of the Tax Cuts and Jobs Act.

Notably, it allows an immediate deduction for domestic research and development expenditures, reinstates 100% bonus depreciation, decreases the limitation on deductible interest expense, and modifies the international tax framework.

The legislation has multiple effective dates, with certain provisions effective starting in 2025 and others in the subsequent years.

The Company was able to reduce their cash tax expense in the year ended December 31, 2025 from the changes implemented in OBBBA by utilizing the allowable acceleration of deductions for depreciation and domestic capitalized R&D expenses, as well as the increased deduction for interest expense, which reduced federal taxable income in the year.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

NOTE 12 — BUSINESS SEGMENTS

4 unchanged sentences

The International segment is the Company’s international business that sells and distributes products to consumers primarily in the U.K., the European Union and the Asia Pacific region.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

The Company’s chief operation decision maker (“CODM”) is the Company’s Chief Executive Officer.

The Company has segmented its operations to reflect the manner in which the CODM reviews and evaluates the results of its operations.

The CODM allocates operating and capital resources and evaluates the performance of the Company’s segments based on segment net sales, segment gross margin, and segment income from operations.

The CODM allocates operating and capital resources and evaluates the performance of the Company’s segments based on segment net sales, segment gross margin, and segment (loss) income from operations.

Such measures give recognition to specifically identifiable operating costs.

Significant segment expenses that are included in segment operating income consist of cost of sales, distribution expenses and selling, general and administrative expenses.

Significant segment expenses that are included in segment operating income consist of cost of sales, distribution expenses (which include freight-out expenses and warehouse expenses) and selling, general and administrative expenses.

Certain general and administrative expenses are not allocated to the Company’s segments as these represent corporate level activities and are reflected below as unallocated corporate expenses.

12 unchanged sentences

$ 240,695 $ 260,703 $ 254,639

Income from operations:

(Loss) income from operations:

$ 10,851 $ 57,215 $ 63,341

3 unchanged sentences

( 11,031 ) ( 19,608 ) ( 20,336 )

Total income from operations

Total (loss) income from operations

$ ( 9,436 ) $ 27,084 $ 31,941

22 unchanged sentences

Unallocated corporate expenses (1)

11,031 19,608 19,480

Total selling, general and administrative expenses $ 142,442 $ 159,809 $ 152,648

Other expenses:

Goodwill impairment:

$ 33,237 $ — $ —

Restructuring expenses:

International $ 328 $ — $ —

1 unchanged sentence

Total other expenses $ 328 $ — $ 856

(1) In 2022, other expenses and income from operations includes restructuring expenses of $ 0.4 million for the U.S.

segment and $ 0.4 million for the International segment, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES.

(2) The Company recognized expenses of $ 5.1 million in 2022 for estimated remediation costs related to the Wallace EPA Matter, as described in NOTE 13 — COMMITMENTS AND CONTINGENCIES.

In 2023 and 2022, the Company recognized $ 0.8 million and $ 0.6 million, respectively, of restructuring expenses within unallocated corporate expenses, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES.

(1) Unallocated corporate expenses for the year ended 2025 included a net legal settlement gain of $ 6.4 million.

Details see NOTE 13 — COMMITMENTS AND CONTINGENCIES

2025 2024 2023

16 unchanged sentences

Total assets $ 572,555 $ 634,310

Year Ended December 31,

(in thousands)

$ 33,237 $ 33,237

Total goodwill $ 33,237 $ 33,237

Geographical information

13 unchanged sentences

Year ending December 31,

Total $ 8,223

Legal proceedings

23 unchanged sentences

The tolling agreements have been extended multiple times and currently expire in November 2025.

In October 2025, the U.S.

government requested that the parties extend the tolling agreement until November 10, 2026.

WSPR agreed to the extension.

The tolling agreements do not constitute in any way an admission or acknowledgment of any fact, conclusion of law, or liability by the parties to the agreements.

6 unchanged sentences

In August 2021, WSPR received a Notice of Liability for the Site from the Department of Justice on behalf of the EPA, and in September 2021, WSPR responded with a good faith offer to conduct additional testing and remedial design work for OU-1.

WSPR has actively participated in negotiations among the U.S.

WSPR actively participated in negotiations among the U.S.

Government (the Department of Justice and the EPA) and other potentially responsible parties with respect to the remedial work at OU-1, which negotiations culminated in the finalization of a Consent Decree for Remedial Design and Remedial Action at Operable Unit One of the San German Groundwater Contamination Site (“Decree”).

5 unchanged sentences

On September 6, 2023, at the conclusion of the public comment period, the U.S.

Government filed a Motion to Enter the Decree, and the court entered the Decree into order on December 14, 2023, thereby effectuating the Decree.

Government filed a Motion to Enter the Decree, and the court entered the Decree on December 14, 2023, thereby effectuating the Decree.

On January 10, 2024, EPA issued a notice to proceed with the OU-1 remedial work.

The Company thereafter commenced remedial work on OU-1 in accordance with the Decree.

The Company reserved $ 5.6 million to cover probable and estimable liabilities with respect to the above remedial design and remedial action for the initial operable unit.

WSPR submitted the final draft Remedial Design Work Plan, Supplemental Pre-Design Investigation Work Plan, and Pilot Study Work Plan to EPA on May 30, 2025, and awaits EPA approval on those documents to move forward with the remediation.

The Company reserved $ 5.6 million to cover probable and estimable liabilities with respect to the above remedial design and remedial action for OU-1.

However, it is not possible at this time for the Company to estimate its share of its ultimate liability for the Site.

In the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

As of December 31, 2024, the remaining liability is $ 5.4 million.

As of December 31, 2025, the remaining probable and reasonably estimable liability related to the above remedial design and remedial action for OU-1 is $ 5.3 million.

Gain Contingency Settlement

1 unchanged sentence

(“Taylor” and/or the “Plaintiff”), acquired by the Company on March 2, 2018, commenced a legal action related to a 2013 acquisition, alleging that the seller failed to sufficiently disclose certain adverse information as part of the acquisition.

In February 2025, the Company received a net settlement of $ 6.4 million related to this case.

The Company will recognize this settlement in the statement of operations for the quarter ended March 31, 2025.

In February 2025, the Company received a net settlement of $ 6.4 million, which consisted of a $ 7.0 million settlement less $ 0.6 million in legal fees related to this case.

The Company recognized the gain in selling, general and administrative expenses in the consolidated statement of operations for the quarter ended March 31, 2025.

The Company is, from time to time, involved in other legal proceedings.

46 unchanged sentences

Freight 8,636 5,912

Wallace facility remediation 980 5,640

Royalties 5,598 5,104

Professional fees 4,660 2,628

Royalties 1,632 5,598

Accrued asset retirement obligations 1,419 —

Wallace facility remediation 831 980

Interest 717 1,026

12 unchanged sentences

Total $ 14,261 $ 15,955

(1) The Wallace facility remediation liability was classified within accrued expenses in the Company’s Consolidated Balance Sheet at December 31, 2023.

Based on current estimates of the project timeline a portion of the liability is classified within other long-term liabilities in the Company’s Consolidated Balance Sheet at December 31, 2024.

Supplemental disclosure of cash flow information

17 unchanged sentences

Balance at end of year $ ( 17,698 ) $ ( 18,384 ) $ ( 32,614 )

Accumulated deferred gains (losses) on cash flow hedges:

Accumulated deferred (losses) gains on cash flow hedges:

Balance at beginning of year $ 247 $ ( 134 ) $ 923

Change in unrealized gains (losses)

Change in unrealized (losses) gains

( 534 ) 199 ( 527 )

47 unchanged sentences

Year ended December 31, 2025

$ 21,692 $ 7,251 $ ( 294 ) $ 28,649

Year ended December 31, 2024

20,159 2,516 ( 983 ) 21,692

Year ended December 31, 2023

16,323 3,895 ( 59 ) 20,159

(a) The allowance for doubtful accounts represents allowances for estimated credit losses that could result from the inability of its customers to make required payments, taking into consideration customer credit history and financial condition, industry and market segment information, credit reports, and expectations of current and future economic conditions.

4 unchanged sentences

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 9A. Controls and Procedures