What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-06 compared with 2020-11-05 · 125 added, 244 removed, 231 unchanged (62% of the section changed)

8 unchanged sentences

There are a number of risks and uncertainties that could cause the Company’s actual results to differ materially from the forward-looking statements contained in this Quarterly Report.

Important factors that could cause the Company’s actual results to differ materially from those expressed as forward-looking statements are set forth in this Quarterly Report in Part II, Item 1A.

Risk Factors, and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 Annual Report on Form 10-K”) in Part I, Item 1A under the heading Risk Factors .

Important factors that could cause the Company’s actual results to differ materially from those expressed as forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Annual Report on Form 10-K”) in Part I, Item 1A under the heading Risk Factors .

Such risks, uncertainties and other important factors include, among others, risks related to:

1 unchanged sentence

• Exit of the United Kingdom from the European Union;

• Port disruptions and higher transportation costs;

• Indebtedness and compliance with credit agreements;

1 unchanged sentence

• The credit-worthiness of our customers and the counterparties to our derivatives;

• Restructuring and integration of our European operations;

• Seasonality;

• Interest rates;

• Acquisition integration;

• Competition;

9 unchanged sentences

• Product development;

• Stock keeping unit rationalization (“SKU Rationalization”) initiative;

• Reputation;

• Technology;

• Cyber security;

• Price fluctuations;

3 unchanged sentences

• Governance;

• Acquisition integration;

• Acquisitions and investments;

41 unchanged sentences

The Company accounts for its investment in Vasconia using the equity method of accounting and records its proportionate share of Vasconia’s net income in the Company’s condensed consolidated statements of operations.

Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to the customer relationships acquired) for the three and nine months ended September 30, 2020 and 2019 in the accompanying unaudited condensed consolidated statements of operations.

Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to the customer relationships acquired) for the three months ended March 31, 2021 and 2020 in the accompanying unaudited condensed consolidated statements of operations.

Pursuant to a Shares Subscription Agreement, the Company may designate four persons to be nominated as members of Vasconia’s Board of Directors.

As of September 30, 2020, Vasconia’s Board of Directors is comprised of fourteen members of whom the Company has designated three members.

As of March 31, 2021, Vasconia’s Board of Directors is comprised of fourteen members of whom the Company has designated three members.

The Company’s business and working capital needs are highly seasonal, with a majority of sales occurring in the third and fourth quarters.

1 unchanged sentence

In anticipation of the pre-holiday shipping season, inventory levels increase primarily in the June through October time period.

The Company's inventory levels at March 31, 2021, did not decrease from the previous two quarters.

The higher inventory levels are a result of increased inventory purchases to meet higher expected demand in 2021.

Consistent with the seasonality of the Company’s net sales and inventory levels, the Company also experiences seasonality in its inventory turnover and turnover days from one quarter to the next.

1 unchanged sentence

RESTRUCTURING

During the nine months ended September 30, 2020, the Company's international segment incurred $0.3 million of restructuring expenses related to severance associated with the strategic reorganization of the international segment’s product development and sales workforce.

The strategic reorganization is the result of the Company's efforts for product development efficiencies and a country tailored international sales approach.

As of September 30, 2020, $0.1 million of severance was accrued.

The Company does not expect to incur any additional restructuring charges for these strategic reorganization efforts for the remainder of 2020.

During the nine months ended September 30, 2019, the Company incurred $0.4 million of Filament restructuring charges, primarily related to severance.

During the three and nine months ended September 30, 2019, the Company incurred $0.3 million and $0.7 million of restructuring expenses, primarily related to severance, for the integration of its legal entities operating in Europe.

In 2018, the Company finalized its integration plans for its European operations and took further steps to consolidate its operations.

During the three months ended March 31, 2021 and 2020, the Company did not incur any restructuring expenses.

RECENT DEVELOPMENTS

The COVID-19 pandemic continues to affect the United States and the rest of the world.

The pandemic has resulted in an increase in sales of certain of the Company’s products as well as a decrease in sales in other of its products.

The Company has experienced a reduction in sales at certain retailers that have been closed or have had a limited number of stores that are open during the pandemic.

This reduction in sales has been offset by higher sales at retailers that have remained open.

Many of the retailers that remain open provide products that are deemed essential.

In addition, the Company's e-commerce sales have increased during the pandemic.

The Company’s distribution centers remain operational and continue to support e-commerce and brick-and-mortar retail customers.

The Company has not experienced disruptions in its supply chain related to the COVID-19 pandemic.

However, in limited instances and categories, increased demand has strained the manufacturing capacity of certain of the Company’s suppliers.

Additionally, in the U.S., the Company has experienced some instances of trucking availability shortages, resulting in delays of shipments to certain of its customers.

In response to the COVID-19 pandemic, the Company announced and implemented cost reductions in April 2020.

Also in April 2020, the Company's Board of Directors authorized the postponement of the Company's quarterly cash dividend, which was to be paid on May 15, 2020, to shareholders of record on May 1, 2020.

The Company set November 16, 2020 as the new record date for such dividend payable on December 16, 2020.

The Company cannot estimate the length or severity of this pandemic.

However the Company believes that it could have a material adverse impact on its future sales, results of operations, and cash flows, including the potential impairment of certain intangible and other long-lived assets.

The Company has not experienced significant disruptions in its supply chain related to the COVID-19 pandemic.

In limited instances and categories, increased demand has strained the manufacturing capacity of certain of the Company’s suppliers.

The Company expects, in the short term, higher inbound freight cost to import inventory as a result of expected higher demand of the Company's products and broader macroeconomic demand for ocean freight.

Additionally, in the U.S., the Company has experienced instances of trucking availability shortages, resulting in delays of shipments to certain of its customers.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

3 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Net sales 100.0 % 100.0 %

3 unchanged sentences

Selling, general and administrative expenses 19.5 28.6

Restructuring expenses — 0.2 0.0 0.3

Goodwill and other impairments

— 4.6 3.9 2.0

Income (loss) from operations

9.6 3.0 0.1 (1.8)

Interest expense (2.1) (3.2)

Mark to market gain (loss) on interest rate derivatives

0.0 0.2 (0.4) 0.1

Income (loss) before income taxes and equity in earnings (losses)

7.8 0.6 (2.9) (4.8)

Income tax provision

(1.7) (7.0) (0.6) (1.4)

Equity in earnings (losses), net of taxes

0.1 (0.1) (0.1) (0.1)

Income (loss) before income taxes and equity in (losses) earnings

Income tax (provision) benefit

Equity in (losses) earnings, net of taxes

Net income (loss)

1 unchanged sentence

MANAGEMENT’S DISCUSSION AND ANALYSIS

THREE MONTHS ENDED SEPTEMBER 30, 2020 COMPARED TO THE THREE MONTHS ENDED

SEPTEMBER 30, 2019

Consolidated net sales for the three months ended September 30, 2020 were $224.8 million, representing an increase of $9.3 million, or 4.3%, as compared to net sales of $215.5 million for the corresponding period in 2019.

THREE MONTHS ENDED MARCH 31, 2021 COMPARED TO THE THREE MONTHS ENDED

MARCH 31, 2020

Consolidated net sales for the three months ended March 31, 2021 were $195.7 million, representing an increase of $50.6 million, or 34.9%, as compared to net sales of $145.1 million for the corresponding period in 2020.

In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2021 average rates to 2020 local currency amounts, consolidated net sales increased by $49.6 million, or 34.0%, as compared to consolidated net sales in the corresponding period in 2020.

Net sales for the U.S.

segment for the three months ended September 30, 2020 were $201.5 million, an increase of $6.3 million, or 3.2%, as compared to net sales of $195.2 million for the corresponding period in 2019.

segment for the three months ended March 31, 2021 were $176.2 million, an increase of $47.0 million, or 36.4%, as compared to net sales of $129.2 million for the corresponding period in 2020.

Net sales for the U.S.

segment’s Kitchenware product category were $119.6 million for the three months ended September 30, 2020, an increase of $20.3 million, or 20.4%, as compared to $99.3 million for the corresponding period in 2019.

The increase was mainly driven by higher consumer demand for essential kitchen tools and gadgets, and cutlery and board products during the pandemic.

segment’s Kitchenware product category were $120.0 million for the three months ended March 31, 2021, an increase of $40.7 million, or 51.3%, as compared to $79.3 million for the corresponding period in 2020.

The increase was mainly driven by higher consumer demand, in both e-commerce and wholesale channels, for essential kitchen tools and gadgets, cutlery and board and bakeware products.

The strong demand for these products have been a result of shifts in consumer purchasing patterns.

Net sales for the U.S.

segment’s Tableware product category were $51.3 million for the three months ended September 30, 2020, a decrease of $6.0 million, or 10.5%, as compared to $57.3 million for the corresponding period in 2019.

The decrease was primarily driven by lower sales of dinnerware products in the wholesale channel, partially offset by an increase in sales of flatware product in the wholesale channel.

segment’s Tableware product category were $30.2 million for the three months ended March 31, 2021, an increase of $6.6 million , or 28.0%, as compared to $23.6 million for the corresponding period in 2020.

The increase came from all product lines most notably on flatware sales from warehouse club programs and dinnerware sales from higher e-commerce sales.

Net sales for the U.S.

segment’s Home Solutions product category were $30.7 million for the three months ended September 30, 2020, a decrease of $7.9 million, or 20.5%, as compared to $38.6 million for the corresponding period in 2019.

The decrease was primarily driven by lower home décor sales due to certain retailer program initiatives not repeating in 2020 and lower sales in the private label hydration and back-to-school lunch box category.

Net sales for the International segment were $23.2 million for the three months ended September 30, 2020, an increase of $2.9 million, or 14.3%, as compared to net sales of $20.3 million for the corresponding period in 2019.

segment’s Home Solutions product category were $26.0 million for the three months ended March 31, 2021, a decrease of $0.3 million, or 1.1%, as compared to $26.3 million for the corresponding period in 2020.

The decrease was primarily driven by lower sales in the hydration product category due to a warehouse club program not repeating in 2021, partially offset by an increase in home décor and measurement product sales.

Net sales for the International segment were $19.5 million for the three months ended March 31, 2021, an increase of $3.6 million, or 22.6%, as compared to net sales of $15.9 million for the corresponding period in 2020.

In constant currency, which excludes the impact of foreign exchange fluctuations, net sales increased $2.7 million, or 15.8%, as compared to consolidated net sales in the corresponding period in 2020.

The increase in sales, and sales in constant currency, was primarily driven by an increase in e-commerce sales as well as improved order fulfillment processes in 2020 compared to the corresponding 2019 period.

Gross margin for the three months ended September 30, 2020 was $78.8 million, or 35.1%, as compared to $72.9 million, or 33.8%, for the corresponding period in 2019.

Gross margin for the U.S.

segment was $71.7 million, or 35.6%, for the three months ended September 30, 2020, as compared to $67.0 million, or 34.3%, for the corresponding period in 2019.

The gross margin increase was primarily due to changes in product and customer mix.

Gross margin for the International segment was $7.0 million, or 30.2%, for the three months ended September 30, 2020, as compared to $5.9 million, or 29.1%, for the corresponding period in 2019.

The improvement in gross margin was attributable to a change in product and customer mix, partially offset by a provision against slower moving inventory recorded in the current period.

Distribution expenses

Distribution expenses for the three months ended September 30, 2020 were $19.0 million, as compared to $18.5 million for the corresponding period in 2019.

Distribution expenses as a percentage of net sales were 8.4% for the three months ended September 30, 2020, as compared to 8.6% for the three months ended September 30, 2019.

Distribution expenses as a percentage of net sales for the U.S.

segment were approximately 7.6% and 7.2% for the three months ended September 30, 2020 and 2019, respectively.

As a percentage of sales shipped from the Company’s U.S.

warehouses distribution expenses were 8.4% and 8.8% for the three months ended September 30, 2020 and 2019, respectively.

The improvement reflects the continued realization of labor management efficiency, and the leverage benefit of fixed costs on higher sales volume.

Distribution expenses as a percentage of net sales for the International segment were 15.5% for the three months ended September 30, 2020, compared to 22.2% for the corresponding period in 2019.

Distribution expenses during the three months ended September 30, 2019 include $0.9 million for the Company’s facility relocation costs.

As a percentage of sales shipped from the Company’s U.K.

warehouses, excluding the moving and relocation costs for U.K.

operations, distribution expenses were 13.6% and 19.1% for the three months ended September 30, 2020 and 2019, respectively.

The decrease was primarily attributed to the improvement in the fulfillment of orders and labor efficiencies compared to the prior period.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended September 30, 2020 were $38.3 million, an increase of $0.9 million, or 2.4%, as compared to $37.4 million for the corresponding period in 2019.

Selling, general and administrative expenses for the U.S.

segment were $27.3 million for the three months ended September 30, 2020, as compared to $28.7 million for the corresponding period in 2019.

As a percentage of net sales, selling, general and administrative expenses were 13.5% and 14.7% for the three months ended September 30, 2020 and 2019, respectively.

The decrease was primarily attributable to lower marketing and selling expenses resulting from the Company's cost reduction strategy in response to the COVID-19 pandemic.

This was partially offset by higher employee incentive compensation.

Selling, general and administrative expenses for the International segment were $4.8 million for the three months ended September 30, 2020, as compared to $4.2 million for the corresponding period in 2019.

The increase was primarily attributable to higher sales commissions and leasehold amortization expenses related to the new facility, offset by lower expenses from COVID-19 actions.

In addition, certain expenses previously classified in distribution expenses are included in selling, general and administrative expenses in the current quarter.

Unallocated corporate expenses for the three months ended September 30, 2020 were $6.3 million, as compared to $4.5 million for the corresponding period in 2019.

The increase was primarily attributable to higher employee incentive compensation and legal expenses, partially offset by lower professional fees.

Goodwill and infinite-lived intangible asset impairment

For the three months ended September 30, 2019, the Company’s qualitative assessment of goodwill indicated triggering events in its European kitchenware reporting unit, resulting in the Company performing a quantitative assessment that resulted in a $9.7 million non-cash goodwill impairment charge.

Interest expense

Interest expense was $4.1 million for the three months ended September 30, 2020 and $5.5 million for the three months ended September 30, 2019 as a result of lower debt outstanding and a lower interest rate environment.

Mark to market gain (loss) on interest rate derivatives

Mark to market gain on interest rate derivatives was $0.1 million for the three months ended September 30, 2020 as compared to a mark to market gain on interest rate derivatives of $0.4 million for the three months ended September 30, 2019.

The mark to market amount represents the change in fair value on the Company's interest rate derivatives.

These derivatives were entered

into for purposes of locking-in a fixed interest rate on the Company's variable interest rate debt.

The intent of the Company is to hold these derivative contracts until their maturity.

Therefore, the Company expects that this loss will reverse over time.

Income tax provision

The provision for income taxes includes federal, foreign, state and local income taxes.

The Company used a discrete tax methodology to calculate taxes for the three months ended September 30, 2020.

Management determined that since minimal changes in projected pre-tax income or loss would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the three months ended September 30, 2020.

Income tax provision for the three months ended September 30, 2020 was $3.7 million as compared to an income tax provision of $15.1 million for the corresponding period in 2019.

The Company’s effective income tax provision rate for the three months ended September 30, 2020 was 21.2% as compared to a provision rate of 857.5% for the corresponding 2019 period.

The effective tax rate for the three months ended September 30, 2020 is consistent with the federal statutory income tax rate of 21% and includes an increase for state and local taxes offset by other items that are not material.

The effective tax rate for the three months ended September 30, 2019 differs from the federal statutory income tax rate primarily due to state and local taxes and the impact of non-deductible expenses, offset by a benefit for federal credits.

Included within the non-deductible expenses is the European goodwill impairment recorded in the three months ended September 30, 2019, which is not deductible for income tax purposes in the foreign jurisdiction.

Equity in earnings (losses)

Equity in earnings of Vasconia, net of taxes, was $0.1 million for the three months ended September 30, 2020, as compared to equity in losses of Vasconia, net of taxes, of $0.2 million for the three months ended September 30, 2019.

Vasconia reported income from operations of $3.0 million for the three months ended September 30, 2020, as compared to loss from operations of $0.6 million for the three months ended September 30, 2019.

The increase is primarily from improved operating results in the current period in both Vasconia's kitchenware and aluminum divisions.

MANAGEMENT’S DISCUSSION AND ANALYSIS

NINE MONTHS ENDED SEPTEMBER 30, 2020 COMPARED TO THE NINE MONTHS ENDED

SEPTEMBER 30, 2019

Consolidated net sales for the nine months ended September 30, 2020 were $520.0 million, representing an increase of $12.0 million, or 2.4%, as compared to net sales of $508.0 million for the corresponding period in 2019.

In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2020 average rates to 2019 local currency amounts, net sales also increased by $12.0 million, or 2.4%, as compared to consolidated net sales in the corresponding period in 2019.

Net sales for the U.S.

segment for the nine months ended September 30, 2020 were $463.3 million, an increase of $18.0 million, or 4.0%, as compared to net sales of $445.3 million for the corresponding period in 2019.

Net sales for the U.S.

segment’s Kitchenware product category were $283.3 million for the nine months ended September 30, 2020, an increase of $49.1 million, or 21.0%, as compared to $234.1 million for the corresponding period in 2019.

The increase was mainly attributable to higher consumer demand in the e-commerce and wholesale channels for essential kitchen tools and gadgets, cutlery and boards, and cookware and bakeware products.

Net sales for the U.S.

segment’s Tableware product category were $98.5 million for the nine months ended September 30, 2020, a decrease of $14.0 million, or 12.4%, as compared to $112.5 million for the corresponding period in 2019.

The decrease was primarily driven by lower sales of dinnerware products to brick-and-mortar retailers due to the COVID-19 pandemic;

this decrease was partially offset by increased e-commerce sales.

Net sales for the U.S.

segment’s Home Solutions product category were $81.5 million for the nine months ended September 30, 2020, a decrease of $17.1 million, or 17.3%, as compared to $98.6 million for the corresponding period in 2019.

The decrease was driven by lower sales in the private label hydration category, and lower home décor sales due to certain retailer program initiatives not repeating in 2020.

This decrease was offset by higher sales resulting from new programs of branded hydration products in the wholesale channel.

Net sales for the International segment were $56.6 million for the nine months ended September 30, 2020, a decrease of $6.1 million, or 9.7%, as compared to net sales of $62.7 million for the corresponding period in 2019.

In constant currency, which excludes the impact of foreign exchange fluctuations, net sales decreased $6.0 million, or 9.5%, as compared to consolidated net sales in the corresponding period in 2019.

The decrease in sales was driven by several factors, including lower sales to national and independent retailers resulting from lower demand and store closures due to COVID-19, offset by increased e-commerce sales due to higher customer demand in online channels and order fulfillment operational improvements compared to the corresponding period in 2019.

Gross margin for the nine months ended September 30, 2020 was $185.9 million, or 35.8%, as compared to $171.3 million, or 33.7%, for the corresponding period in 2019.

The increase in sales was primarily attributable to the continued recovery of sales to brick-and-mortar retailers to pre-pandemic levels, and an increase in e-commerce sales.

Gross margin for the three months ended March 31, 2021 was $66.0 million, or 33.7%, as compared to $52.9 million, or 36.5%, for the corresponding period in 2020.

Gross margin for the U.S.

segment was $170.9 million, or 36.9%, for the nine months ended September 30, 2020, as compared to $149.9 million, or 33.7%, for the corresponding period in 2019.

Gross margin in the 2019 period reflects an $8.5 million charge for the SKU Rationalization initiative.

Excluding the SKU Rationalization initiative, the gross margin would have been 35.6%.

The increase in gross margin, excluding the SKU Rationalization change, was primarily due to changes in product mix.

Gross margin for the International segment was $15.0 million, or 26.5%, for the nine months ended September 30, 2020, as compared to $21.4 million, or 34.1%, for the corresponding period in 2019.

The decrease in gross margin percentage was primarily due to additional allowances to brick-and-mortar customers and higher inventory reserves.

segment was $59.8 million, or 33.9%, for the three months ended March 31, 2021, as compared to $49.3 million, or 38.2%, for the corresponding period in 2020.

The decrease in gross margin was primarily due to higher inbound freight costs, product mix and the 2020 quarter reflected a benefit from a duty exclusion on certain products.

Gross margin for the International segment was $6.2 million, or 31.8%, for the three months ended March 31, 2021, as compared to $3.6 million, or 22.9%, for the corresponding period in 2020.

The increase in gross margin was driven by the comparable period being negatively impacted by higher sales allowances and allowances for excess inventory.

Distribution expenses

Distribution expenses for the nine months ended September 30, 2020 were $50.7 million, as compared to $49.9 million for the corresponding period in 2019.

Distribution expenses as a percentage of net sales were 9.8% for the nine months ended September 30, 2020 and September 30, 2019.

Distribution expenses for the three months ended March 31, 2021 were $18.6 million, as compared to $16.6 million for the corresponding period in 2020.

Distribution expenses as a percentage of net sales were 9.5% for the three months ended March 31, 2021, as compared to 11.4% for the three months ended March 31, 2020.

Distribution expenses as a percentage of net sales for the U.S.

segment were approximately 8.6% and 9.0% for the nine months ended September 30, 2020 and 2019, respectively.

Distribution expenses during the nine months ended September 30, 2019 include $0.2 million for the Company’s facility relocation efforts of its west coast distribution facility.

segment were approximately 8.7% and 9.8% for the three months ended March 31, 2021 and 2020, respectively.

As a percentage of sales shipped from the Company’s U.S.

warehouses, excluding relocation expenses, distribution expenses were 9.0% and 10.3% for the nine months ended September 30, 2020 and 2019, respectively.

The improvement reflects the continued realization of labor management efficiency and synergy savings as well as the leverage benefit of fixed costs on higher sales volume.

Distribution expenses as a percentage of net sales for the International segment were 19.5% for the nine months ended September 30, 2020, compared to 15.9% for the corresponding period in 2019.

Distribution expenses for the nine months ended September 30, 2020 and 2019 include $1.1 million and $0.9 million, respectively, of cost related to the Company’s facility relocation.

warehouses distribution expenses were 8.9% and 9.8% for the three months ended March 31, 2021 and 2020, respectively.

The improvement was a result of the leverage benefit of fixed costs on higher sales volume, partially offset by higher hourly labor rates.

Distribution expenses as a percentage of net sales for the International segment were 17.2% for the three months ended March 31, 2021, compared to 24.7% for the corresponding period in 2020.

Distribution expenses during the three months ended March 31, 2020 include $0.8 million for the Company’s facility relocation costs.

As a percentage of sales shipped from the Company’s U.K.

warehouses, excluding the moving and relocation costs for U.K.

operations, distribution expenses were 14.7% for the nine months ended September 30, 2020 and 2019.

operations, distribution expenses were 14.4% and 15.9% for the three months ended March 31, 2021 and 2020, respectively.

The decrease was primarily attributed to an improvement in labor efficiencies as the prior period experienced inefficiencies associated with the setting up of the new U.K.

Selling, general and administrative expenses

Selling, general and administrative expenses for the nine months ended September 30, 2020 were $114.3 million, a decrease of $4.1 million, or 3.5%, as compared to $118.4 million for the corresponding period in 2019.

Selling, general and administrative expenses for the three months ended March 31, 2021 were $38.1 million, a decrease of $3.4 million, or 8.2%, as compared to $41.5 million for the corresponding period in 2020.

Selling, general and administrative expenses for the U.S.

segment were $82.7 million for the nine months ended September 30, 2020, as compared to $85.7 million for the corresponding period in 2019.

As a percentage of net sales, selling, general and administrative expenses were 17.8% and 19.2% for the nine months ended September 30, 2020 and 2019, respectively.

The decrease was primarily attributable to lower labor costs resulting from the Company's cost reduction strategy in response to the COVID-19 pandemic, as well as lower selling and marketing expenses, offset by higher estimates for bad debt expense related to the economic uncertainties caused by the COVID-19 pandemic.

Selling, general and administrative expenses for the International segment were $15.7 million for the nine months ended September 30, 2020, as compared to $17.6 million for the corresponding period in 2019.

The decrease was primarily attributable to the realization of cost savings resulting from the Company's integration efforts, and lower employee and selling expenses resulting from the Company's cost reduction strategy in response to the COVID-19 pandemic, offset by higher estimates for bad debt expense related to the economic uncertainties caused by the COVID-19 pandemic.

Unallocated corporate expenses for the nine months ended September 30, 2020 were $15.9 million, as compared to $15.1 million for the corresponding period in 2019.

The increase was primarily attributable to employee related expenses, offset by a decrease in executive salary costs and lower professional fees.

Restructuring expenses

The strategic reorganization is the result of the Company's efforts for product development efficiencies and a country tailored international sales approach.

During the nine months ended September 30, 2019, the Company incurred $0.4 million of Filament restructuring charges and $0.7 million of restructuring expenses, primarily related to severance, for the integration of its legal entities operating in Europe.

segment were $27.4 million for the three months ended March 31, 2021, as compared to $30.4 million for the corresponding period in 2020.

As a percentage of net sales, selling, general and administrative expenses were 15.6% and 23.5% for the three months ended March 31, 2021 and 2020, respectively.

The decrease was primarily attributable to lower estimates for bad debt expense and selling and facility expenses which was partially offset by an increase in incentive compensation.

Selling, general and administrative expenses for the International segment were $5.0 million for the three months ended March 31, 2021, as compared to $6.5 million for the corresponding period in 2020.

The decrease was primarily attributable to lower estimates for bad debt expense, and lower employee expenses due to a reduction in headcount.

Unallocated corporate expenses for the three months ended March 31, 2021 were $5.7 million, as compared to $4.6 million for the corresponding period in 2020.

The increase was driven by higher incentive compensation expense.

Goodwill and infinite-lived intangible asset impairment

During the nine months ended September 30, 2020, the Company recorded a $20.1 million non-cash goodwill and intangible asset impairment charge related to the U.S.

During the three months ended March 31, 2020, the Company recorded a $20.1 million non-cash goodwill and intangible asset impairment charge related to the U.S.

reporting unit.

The impairment charge resulted from, among other factors, more conservative estimated future cash flows in light of the uncertain market conditions arising from the COVID-19 pandemic.

During the nine months ended September 30, 2019, the Company’s qualitative assessment of goodwill indicated triggering events in its European kitchenware reporting unit, resulting in the Company performing a quantitative assessment, that resulted in a $9.7 million non-cash goodwill impairment charge.

Interest expense

Interest expense was $13.1 million for the nine months ended September 30, 2020 and $15.5 million for the nine months ended September 30, 2019, primarily as a result of lower debt outstanding and a lower interest rate environment.

Interest expense was $4.0 million for the three months ended March 31, 2021 and $4.7 million for the three months ended March 31, 2020.

The decrease in expense was a result of less debt outstanding.

Mark to market gain (loss) on interest rate derivatives

Mark to market loss on interest rate derivatives was $2.3 million for the nine months ended September 30, 2020 as compared to a mark to market gain on interest rate derivatives of $0.7 million for the nine months ended September 30, 2019.

The mark to market amount represents the change in the fair value on the Company's interest rate derivatives.

These derivatives were entered into for purposes of locking-in a fixed interest rate on the Company's variable interest rate debt.

The current period loss was caused by lower interest rates as compared to the nine months ended September 30, 2019.

Mark to market gain on interest rate derivatives was $0.5 million for the three months ended March 31, 2021 as compared to a mark to market loss on interest rate derivatives of $2.3 million for the three months ended March 31, 2020.

The mark to market amount represents the change in fair value on the Company's interest rate derivatives that have not been designated as hedging instruments.

These derivatives were entered into for purposes of locking-in a fixed interest rate on a portion of the Company's variable interest rate debt.

The prior period loss was a result of significant declines in interest rates during that period.

The intent of the Company is to hold these derivative contracts until their maturity.

Therefore, the Company expects that this loss will reverse over time.

Income tax provision

The provision for income taxes includes federal, foreign, state and local income taxes.

The Company used a discrete tax methodology to calculate taxes for the nine months ended September 30, 2020.

Income tax provision for the nine months ended September 30, 2020 was $3.0 million as compared to an income tax provision of $6.8 million for the corresponding period in 2019.

The Company’s effective income tax provision rate for the nine months ended September 30, 2020 was (20.3)% as compared to a provision rate of (30.0)% for the corresponding 2019 period.

The negative rates for the nine months ended September 30, 2020 and September 30, 2019 reflect tax expense on a pretax financial reporting loss.

The effective rate for the nine months ended September 30, 2020 differs from the federal statutory income tax rate of 21% primarily due to state and local taxes, equity based awards, and the non-deductible portion of the U.S.

goodwill impairment recorded in the three months ended March 31, 2020.

The effective tax rate for the nine months ended September 30, 2019 differs from the federal statutory income tax rate primarily due to state and local taxes and the impact of non-deductible expenses, offset by a benefit for federal credits.

Equity in earnings (losses)

Equity in losses of Vasconia, net of taxes, was $0.2 million for the nine months ended September 30, 2020, as compared to equity in losses of Vasconia, net of taxes, of $0.4 million for the nine months ended September 30, 2019.

Vasconia reported income from operations of $3.8 million for the nine months ended September 30, 2020, as compared to income from operations of $4.1 million for the nine months ended September 30, 2019.

The decrease in income from operations was attributable to the effect of foreign exchange rates in the translation of income from operations from MXP to USD.

During the nine months ended September 30, 2020, the Company recognized a loss of $0.2 million, relating to cumulative translation foreign currency losses that were recognized to earnings upon the dissolution of Lifetime Brands Do Brasil Participacoes Ltda., a 100% owned foreign subsidiary.

The foreign currency translation losses related to the notes receivable due to the Company from the 2016 sale of its equity interest in GS International S/A.

Income tax provision of $2.4 million and an income tax benefit of $3.7 million for the three months ended March 31, 2021 and 2020, respectively, represent taxes on both U.S.

and foreign earnings at combined effective income tax provision rate of 42.2% and an income tax benefit rate of 11.6%, respectively.

The effective tax rate for the three months ended March 31, 2021 differs from the federal statutory income tax rate of 21% primarily due to state and local tax expense, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

The effective tax rate fo r the three months ended March 31, 2020 differs from the federal statutory income tax rate primarily due to the impact of the non-deductible portion of the goodwill impairment charge recorded in the three months ended March 31, 2020.

Equity in (losses) earnings

Equity in losses of Vasconia, net of taxes, was $0.2 million for the three months ended March 31, 2021, as compared to equity in earnings of Vasconia, net of taxes, of $0.3 million for the three months ended March 31, 2020.

Vasconia reported income from operations of $3.8 million for the three months ended March 31, 2021, as compared to loss from operations of $0.5 million for the three months ended March 31, 2020.

The increase in income from operations was primarily attributable to improved operating results in the current period in both Vasconia's kitchenware and aluminum divisions.

LIQUIDITY AND CAPITAL RESOURCES

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The Company’s primary uses of funds consist of working capital requirements, capital expenditures, acquisitions and investments, and payments of principal and interest on its debt.

At September 30, 2020, the Company had cash and cash equivalents of $42.7 million, compared to $11.4 million at December 31, 2019.

Working capital was $220.4 million at September 30, 2020, compared to $221.8 million at December 31, 2019.

Liquidity, which includes cash and cash equivalents and availability under the ABL Agreement, was approximately $164.3 million at September 30, 2020.

At March 31, 2021, the Company had cash and cash equivalents of $30.6 million, compared to $36.0 million at December 31, 2020.

Working capital was $216.4 million at March 31, 2021, compared to $241.2 million at December 31, 2020.

Liquidity, which includes cash and cash equivalents and availability under the ABL Agreement, was approximately $177.2 million at March 31, 2021.

Inventory, a large component of the Company’s working capital, is expected to fluctuate from period to period, with inventory levels higher primarily in the June through October time period.

The Company's inventory levels at March 31, 2021, did not decrease from the previous two quarters.

The higher inventory levels are a result of increased inventory purchases to meet higher expected demand in 2021.

The Company also expects inventory turnover to fluctuate from period to period based on product and customer mix.

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Certain other product categories experience higher inventory turns due to lower minimum order quantities or trending sale demands.

For the three months ended September 30, 2020, inventory turnover was 3.1 times, or 119 days, as compared to 2.6 times, or 142 days, for the three months ended September 30, 2019.

The improvement was a result of programs implemented by the Company to improve the productivity of its inventory, including the SKU Rationalization initiative implemented in the second quarter of 2019, along with an increase in consumer demand for certain products beginning in the second quarter of 2020.

For the three months ended March 31, 2021, inventory turnover was 2.6 times, or 143 days, as compared to 2.2 times, or 167 days, for the three months ended March 31, 2020.

The improvement was a result of an increase in consumer demand for certain products.

The Company believes that availability under the revolving credit facility under its ABL Agreement, cash on hand and cash flows from operations are sufficient to fund the Company’s operations for the next twelve months.

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Some of the Company’s customers may be adversely and materially affected by the COVID-19 pandemic.

Historically, due to the seasonality of our business our debt balances decline in the fourth quarter of the calendar year.

In the fourth quarter of 2020, we may shorten payment terms to certain vendors and increase inventory levels to meet expected 2021 demand.

These measures would cause our debt level to be higher than it would otherwise be if we don't take the aforementioned actions.

Credit Facilities

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(“JPMorgan”), includes a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $150.0 million, which facility will mature on March 2, 2023, and a loan agreement (the “Term Loan” and together with the ABL Agreement, the “Debt Agreements”) that provides for a senior secured term loan credit facility in the original principal amount of $275.0 million, which matures on February 28, 2025.

The Term Loan requires the Company to make an annual prepayment of principal based upon excess cash flow (“Excess Cash Flow”), if any.

The Term Loan requires the Company to make an annual prepayment of principal based upon a percentage of the Company's excess cash flow, (“Excess Cash Flow”), if any.

The percentage applied to the Company's excess cash flow is based on the Company's Total Net Leverage Ratio (as defined in our debt agreements).

When an Excess Cash Flow payment is required, lenders have the option to decline a portion or all of the prepayment amount.

This estimated amount is recorded in current maturity of term loan on the unaudited condensed consolidated balance sheets.

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Per the Debt Agreements, when the Company makes an Excess Cash Flow payment, the payment is first applied to satisfy the future quarterly required payments in order of maturity.

The quarterly principal payments have been satisfied through maturity of the Term Loan by the annual Excess Cash Flow payments.

The maximum borrowing amount under the ABL Agreement may be increased to up to $200.0 million if certain conditions are met.

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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 pursuant to the Term Loan, is no greater than 3.75 to 1.00, subject to certain limitations and for the period defined pursuant to the Term Loan.

As of September 30, 2020 and December 31, 2019, the total availability under the ABL Agreement was as follows (in thousands):

September 30, 2020

As of March 31, 2021 and December 31, 2020, the total availability under the ABL Agreement was as follows (in thousands):

March 31, 2021

December 31, 2020

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

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Current portion of Term Loan facility:

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Total Non-current portion of Term Loan facility $ 234,968 $ 238,977

The estimated Excess Cash Flow principal payment recorded at March 31, 2021 represents the Company's estimate for the 2022 Excess Cash Flow payment.

The 2021 Excess Cash Flow payment, paid on March 30, 2021, totaled $10.5 million.

The Excess Cash Flow payment differs from the estimated amount at December 31, 2020 of $19.1 million as certain lenders opted to not require payment per the terms of the debt agreements.

The Company’s payment obligations under its Debt Agreements are unconditionally guaranteed by its existing and future U.S.

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The respective margins are based upon the Company’s total leverage ratio, as defined in and computed pursuant to the ABL Agreement.

The interest rate on outstanding borrowings under the ABL Agreement at September 30, 2020 was 1.8%.

There were no outstanding borrowings under the ABL Agreement at March 31, 2021.

In addition, the Company pays a commitment fee of 0.375% on the unused portion of the ABL Agreement.

The Term Loan facility bears interest, at the Company’s option, at one of the following rates:

(i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.5% or (z) one-

month LIBOR, but not less than 1.0%, plus 1.0%, which alternate base rate shall not be less than 2%, plus a margin of 2.5% or (ii) LIBOR, but not less than 1%, plus a margin of 3.5%.

The interest rate on outstanding borrowings under the Term Loan at September 30, 2020 was 4.5%.

(i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.5% or (z) one-month LIBOR, but not less than 1.0%, plus 1.0%, which alternate base rate shall not be less than 2%, plus a margin of 2.5% or (ii) LIBOR, but not less than 1%, plus a margin of 3.5%.

The interest rate on outstanding borrowings under the Term Loan at March 31, 2021 was 4.5%.

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

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Further, the ABL Agreement provides that during any period (a) commencing on the last day of the most recently ended four consecutive fiscal quarters on or prior to the date availability under the ABL Agreement is less than the greater of $15.0 million and 10% of the aggregate commitment under the ABL Agreement at any time and (b) ending on the day after such availability has exceeded the greater of $15.0 million and 10% of the aggregate commitment under the ABL Agreement for 45 consecutive days, the Company is required to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 as of the last day of any period of four consecutive fiscal quarters.

The Company was in compliance with the covenants of the Debt Agreements at September 30, 2020.

The Company was in compliance with the covenants of the Debt Agreements at March 31, 2021.

The Company expects that it will continue to borrow, subject to availability, and repay funds under the ABL Agreement based on working capital and other corporate needs.

Covenant Calculations

Consolidated adjusted EBITDA (a non-GAAP financial measure), which is defined in the Company’s Debt Agreements, is used in the calculation of the Fixed Charge Coverage Ratio, Secured Net Leverage Ratio, Total Leverage Ratio and Total Net Leverage Ratio, which are required to be provided to the Company’s lenders pursuant to its Debt Agreements.

The following is the Company’s consolidated adjusted EBITDA, for the last four fiscal quarters:

Consolidated adjusted EBITDA for the Four Quarters Ended September 30, 2020

Adjusted EBITDA (a non-GAAP financial measure), which is defined in the Company’s Debt Agreements, is used in the calculation of the Fixed Charge Coverage Ratio, Secured Net Leverage Ratio, Total Leverage Ratio and Total Net Leverage Ratio, which are required to be provided to the Company’s lenders pursuant to its Debt Agreements.

The following is the Company’s adjusted EBITDA, for the last four fiscal quarters:

Adjusted EBITDA for the Four Quarters Ended March 31, 2021

(in thousands)

Three months ended September 30, 2020 $ 29,228

Three months ended June 30, 2020 12,388

Three months ended March 31, 2021 $ 16,830

Three months ended December 31, 2020 32,458

Consolidated adjusted EBITDA $ 72,741

Capital expenditures for the nine months ended September 30, 2020 were $1.6 million.

Three months ended September 30, 2020 29,228

Three months ended June 30, 2020 12,388

Adjusted EBITDA $ 90,904

Capital expenditures for the three months ended March 31, 2021 were $0.7 million.

Non-GAAP financial measure

Consolidated adjusted EBITDA is a non-GAAP financial measure within the meaning of Regulation G and Item 10(e) of Regulation S-K, each promulgated by the SEC.

Adjusted EBITDA is a non-GAAP financial measure within the meaning of Regulation G and Item 10(e) of Regulation S-K, each promulgated by the SEC.

This measure is provided because management of the Company uses this financial measure in evaluating the Company’s on-going financial results and trends, and management believes that exclusion of certain items allows for more accurate period-to-period comparison of the Company’s operating performance by investors and analysts.

Management also uses this non-GAAP information as an indicator of business performance.

Consolidated adjusted EBITDA, as discussed above, is also one of the measures used to calculate financial covenants required to be provided to the Company’s lenders pursuant to its Debt Agreements.

Adjusted EBITDA, as discussed above, is also one of the measures used to calculate financial covenants required to be provided to the Company’s lenders pursuant to its Debt Agreements.

Investors should consider this non-GAAP financial measure in addition to, and not as a substitute for, the Company’s financial performance measures prepared in accordance with U.S.

Further, the Company’s non-GAAP information may be different from the non-GAAP information provided by other companies including other companies within the home retail industry.

The following is a reconciliation of the net income (loss), as reported, to consolidated adjusted EBITDA, for each of the last four quarters and the 12 months ended September 30, 2020:

Three Months Ended Twelve Months Ended September 30, 2020

December 31, 2019 March 31,

2020 June 30,

2020 September 30,

The following is a reconciliation of the net (loss) income, as reported, to adjusted EBITDA, for each of the last four quarters and the 12 months ended March 31, 2021:

Three Months Ended Twelve Months Ended March 31, 2021

June 30, 2020 September 30,

2020 December 31,

2020 March 31,

(in thousands)

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848 (147) (1,620) 247 (672)

Income tax (benefit) provision

Income tax provision

3,031 3,711 6,853 2,416 16,011

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Depreciation and amortization 6,061 6,090 6,279 5,958 24,388

Goodwill and other impairments 33,242 20,100 — — 53,342

Stock compensation expense 1,420 1,575 1,630 1,444 6,069

Acquisition and divestment related expenses 55 47 55 57 214

Restructuring expenses

316 — 253 — 569

Integration charges

Acquisition related expenses 55 57 126 182 420

Restructuring expenses (benefit)

253 — (42) — 211

Warehouse relocation

Warehouse relocation expenses

303 — — — 303

Consolidated adjusted EBITDA $ 27,873 $ 3,252 $ 12,388 $ 29,228 $ 72,741

Consolidated adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements.

Consolidated adjusted EBITDA is defined as net income (loss), adjusted to exclude undistributed equity in (earnings) losses, income tax (benefit) provision, interest expense, mark to market loss (gain) on interest rate derivatives, depreciation and amortization, goodwill and other impairments, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.

Adjusted EBITDA $ 12,388 $ 29,228 $ 32,458 $ 16,830 $ 90,904

Adjusted EBITDA is a non-GAAP financial measure which is defined in the Company’s debt agreements.

Adjusted EBITDA is defined as net (loss) income, adjusted to exclude undistributed equity in losses (earnings), income tax provision, interest expense, mark to market loss (gain) on interest rate derivatives, depreciation and amortization, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.

Accounts Receivable Purchase Agreement

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Either party may terminate the agreement at any time upon sixty days’ prior written notice to the other party.

Pursuant to this agreement, the Company sold to HSBC $43.0 million and $116.9 million of receivables during the three and nine months ended September 30, 2020, respectively, and $32.5 million and $81.7 million of receivables during the three and nine months ended September 30, 2019, respectively.

Charges of $0.1 million and $0.4 million related to the sale of the receivables are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2020, respectively.

Charges of $0.2 million and $0.4 million related to the sale of the receivables are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2019, respectively.

At September 30, 2020 and 2019, $26.7 million and $17.8 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

Pursuant to this agreement, the Company sold to HSBC $40.6 million and $37.9 million of receivables during the three months ended March 31, 2021 and 2020, respectively.

Charges of $0.1 million and $0.2 million related to the sale of the receivables are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020, respectively.

At March 31, 2021 and 2020, $25.6 million and $23.2 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

Interest Rate Swaps

The Company is a party to interest rate swap agreements, with an aggregate notional value of $75.0 million at September 30, 2020, 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.

The Company's total outstanding notional value of interest rate swaps was $94.0 million at March 31, 2021.

The Company designated a portion of these interest rate swaps 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.

The hedge periods of these agreements commenced in April 2018 and expire in March 2023.

The notional amounts are reduced over these periods.

The Company entered into additional interest rate swap agreements, with an aggregate notional value of $25.0 million at September 30, 2020 that do not meet the criteria for hedge accounting treatment.

As a result, these interest rate swap agreements are considered non-designated interest rate swaps that serve as economic hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings and expire in February 2025.

The Company's total outstanding notional value of interest rate swaps was $100.0 million at September 30, 2020.

The original notional values are reduced over these periods.

The aggregate notional value of designated interest rate swaps were $69.0 million at March 31, 2021.

In June 2019, the Company entered into additional interest rate swap agreements, with an aggregate notional value of $25.0 million at March 31, 2021.

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 and expire in February 2025.

Foreign Exchange Contracts

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The Company does not hedge the translation of foreign currency profits into USD, as the Company regards this as an accounting exposure rather than an economic exposure.

The Company's foreign exchange contracts, that had been designed as hedges in order to apply hedge accounting, matured in April 2020.

At September 30, 2020 the Company did not have any outstanding foreign exchange contracts.

The aggregate gross notional values of foreign exchange contracts at March 31, 2021 was $18.7 million.

These foreign exchange contracts have been designated as hedges in order to apply hedge accounting.

The Company is exposed to market risks as well as changes in foreign currency exchange rates as measured against the USD and each other, and to changes to the credit risk of derivative counterparties.

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All foreign currency forward contracts that the Company enters into are components of hedging programs and are entered into for the sole purpose of hedging an existing or anticipated currency exposure.

The Company does not enter into such contracts for speculative purposes and as of September 30, 2020, the Company does not have any foreign currency forward contract derivatives that are not designated as hedges.

The Company does not enter into such contracts for speculative purposes and as of March 31, 2021, the Company does not have any foreign currency forward contract derivatives that are not designated as hedges.

Operating activities

Net cash provided by operating activities was $49.2 million for the nine months ended September 30, 2020, as compared to net cash used in operating activities of $40.0 million for the nine months ended September 30, 2019.

The change in 2020 as compared to the corresponding 2019 period was primarily attributable to inventory reduction initiatives commencing in the second quarter of 2019, including the SKU Rationalization initiative, which impacted 2020 more favorably than 2019, and payment deferral strategies utilized in response to the COVID-19 pandemic.

Net cash provided by operating activities was $36.3 million for the three months ended March 31, 2021, as compared to net cash provided by operating activities of $33.7 million for the three months ended March 31, 2020.

The increase from 2021 compared to 2020 was attributable to an increase in net income, most significantly before goodwill impairment, partially offset by a higher investment in inventory and timing of collections related to accounts receivables.

Investing activities

Net cash used in investing activities was $1.6 million and $7.6 million for the nine months ended September 30, 2020 and 2019, respectively.

The change in 2020 as compared to the corresponding 2019 period was primarily attributable to higher capital expenditures in the 2019 period resulting from the Company's U.K.

reorganization and warehouse consolidation efforts.

Net cash used in investing activities was $0.9 million and $1.2 million for the three months ended March 31, 2021 and 2020, respectively.

Financing activities

Net cash used in financing activities was $16.2 million for the nine months ended September 30, 2020, as compared to net cash provided by of $44.9 million for the nine months ended September 30, 2019.

The change was mainly attributable to repayments on the Company's revolving credit facility under its ABL Agreement and the Company's term loan in 2020.

Net cash used in financing activities was $40.8 million for the three months ended March 31, 2021, as compared to net cash provided by of $41.7 million for the three months ended March 31, 2020.

The change was mainly attributable to repayments on the Company's revolving credit facility under its ABL Agreement in the 2021 period compared to proceeds received in the 2020 period, and the timing of the Company's term loan excess cash flow payment.

Quantitative and Qualitative Disclosures About Market Risk

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis