What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-04 compared with 2021-08-05 · 235 added, 170 removed, 745 unchanged (35% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

2021 December 31,

1 unchanged sentence

Cash and cash equivalents $ 8,682 $ 35,963

Accounts receivable, less allowances of $ 16,901 at June 30, 2021 and $ 17,013 at December 31, 2020

Accounts receivable, less allowances of $ 17,968 at September 30, 2021 and $ 17,013 at December 31, 2020

169,223 170,037

1 unchanged sentence

Prepaid expenses and other current assets 8,991 12,129

Income taxes receivable 1,750 —

TOTAL CURRENT ASSETS 443,818 421,293

24 unchanged sentences

Common stock, $ 0.01 par value, shares authorized:

50,000,000 at June 30, 2021 and December 31, 2020;

50,000,000 at September 30, 2021 and December 31, 2020;

shares issued and outstanding:

22,006,623 at June 30, 2021 and 21,755,195 at December 31, 2020

22,018,193 at September 30, 2021 and 21,755,195 at December 31, 2020

Paid-in capital 270,309 268,666

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

6 unchanged sentences

Goodwill and other impairments — — — 20,100

Income (loss) from operations

Income from operations

21,680 21,506 41,927 557

4 unchanged sentences

17,965 17,477 30,923 ( 14,853 )

Income tax (provision) benefit

Income tax provision

( 5,589 ) ( 3,711 ) ( 9,837 ) ( 3,013 )

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

44 unchanged sentences

Dividends (1)

— — — ( 914 ) — ( 914 )

BALANCE AT JUNE 30, 2021 22,007 $ 220 $ 268,976 $ 7,423 $ ( 34,818 ) $ 241,801

(1) Cash dividends declared per share of common stock were $ 0.0850 and $ 0.0850 in the six months ended June 30, 2021 and 2020, respectively.

Comprehensive income:

— — — 12,571 — 12,571

Translation adjustment — — — — 240 240

Net change in cash flow hedges — — — — 992 992

Effect of retirement benefit obligations — — — — 33 33

Total comprehensive income

Stock compensation expense — — 1,192 — — 1,192

Net exercise of stock options 12 — 142 — — 142

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

Dividends (1)

— — — ( 995 ) — ( 995 )

BALANCE AT SEPTEMBER 30, 2021 22,018 $ 220 $ 270,309 $ 18,999 $ ( 33,553 ) $ 255,975

(1) Cash dividends declared per share of common stock were $ 0.1275 and $ 0.1275 in the nine months ended September 30, 2021 and 2020, respectively.

Common stock Paid-in

27 unchanged sentences

Dividends (1)

— — — ( 913 ) — ( 913 )

BALANCE AT JUNE 30, 2020 21,769 $ 218 $ 265,630 $ ( 26,813 ) $ ( 44,164 ) $ 194,871

(1) Cash dividends declared per share of common stock were $ 0.0850 and $ 0.0850 in the six months ended June 30, 2021 and 2020, respectively.

Comprehensive income

— — — 13,913 — 13,913

Translation adjustment — — — — 2,145 2,145

Derivative fair value adjustment — — — — 216 216

Effect of retirement benefit obligations — — — — 20 20

Total comprehensive income

Stock compensation expense — — 1,570 — — 1,570

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

Dividends (1)

— — — ( 942 ) — ( 942 )

BALANCE AT SEPTEMBER 30, 2020 21,768 $ 218 $ 267,200 $ ( 13,842 ) $ ( 41,783 ) $ 211,793

(1) Cash dividends declared per share of common stock were $ 0.1275 and $ 0.1275 in the nine months ended September 30, 2021 and 2020, respectively.

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

OPERATING ACTIVITIES

8 unchanged sentences

Non-cash lease expense ( 1,089 ) 2,915

Provision for doubtful accounts ( 146 ) 2,987

Provision (recovery) for doubtful accounts

( 166 ) 3,011

Stock compensation expense 3,973 4,321

Undistributed equity in (earnings) losses, net of taxes

Undistributed (earnings) losses from equity investment, net of taxes

Changes in operating assets and liabilities

9 unchanged sentences

Purchases of property and equipment ( 3,361 ) ( 1,645 )

Proceeds from sale of shares of equity method investment 3,061 —

Acquisition ( 178 ) —

19 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

Organization and business

Lifetime Brands, Inc.

(“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.

6 unchanged sentences

generally accepted accounting principles (“U.S.

GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

GAAP”) for interim financial information and with the instructions to Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by U.S.

2 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

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

13 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

Distribution expenses

11 unchanged sentences

The sale of accounts receivable, under the Receivables Purchase Agreement with HSBC, is excluded from the Company’s unaudited condensed consolidated balance sheets at the time of sale and the related sale expense is included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations.

Pursuant to this agreement, the Company sold to HSBC $ 38.9 million and $ 79.5 million of receivables during the three and six months ended June 30, 2021, respectively and $ 36.0 million and $ 73.9 million of receivables during the three and six months ended June 30, 2020, respectively.

Charges of $ 0.1 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 each of the three months ended June 30, 2021 and 2020.

Charges of $ 0.2 million and $ 0.3 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 six months ended June 30, 2021 and 2020, respectively.

At June 30, 2021 and 2020, $ 14.6 million and $ 20.8 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

Pursuant to the Receivable Purchase Agreement, the Company sold to HSBC $ 33.7 million and $ 113.2 million of receivables during the three and nine months ended September 30, 2021, respectively, and $ 43.0 million and $ 116.9 million of receivables during the three and nine months ended September 30, 2020, respectively.

Charges of $ 0.1 million and $ 0.3 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, 2021, 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.

At September 30, 2021 and 2020, $ 15.8 million and $ 26.7 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

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

5 unchanged sentences

The components of inventory were as follows (in thousands):

September 30,

2021 December 31, 2020

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

Fair value of financial instruments

9 unchanged sentences

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 Accounting Standards Update No.

(“ASU”) Topic 350, Intangibles – Goodwill and Other.

14 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

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.

2 unchanged sentences

If the carrying amount of the asset is not recoverable, the impairment to be recognized is measured by the amount by which the carrying amount of each long-lived asset exceeds the fair value of the asset.

See NOTE 6 — INTANGIBLE ASSETS.

See NOTE 6 — INTANGIBLE ASSETS to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

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

19 unchanged sentences

Charges associated with lease terminations, related to restructuring activities, are recognized at the effective date of the lease modification.

During the three and six months ended June 30, 2021, the Company did not incur any restructuring expenses.

During the three and six months ended June 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.

During the three and nine months ended September 30, 2021, the Company did not incur any restructuring expenses.

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 to achieve product development efficiencies and a country tailored international sales approach.

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

New accounting pronouncements

2 unchanged sentences

This guidance introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses.

The ASU also provides updated guidance regarding the impairment of available-for-sale debt securities and includes additional disclosure requirements.

ASU 2016-13 also provides updated guidance regarding the impairment of available-for-sale debt securities and includes additional disclosure requirements.

The new guidance is effective for public business entities that meet the definition of a Smaller Reporting Company, as defined by the Securities and Exchange Commission for interim and annual periods beginning after December 15, 2022.

3 unchanged sentences

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to account for contract modifications, hedging relationships and other transactions that reference LIBOR or another reference rate that is expected to be discontinued as a result of reference rate reform.

The guidance in the ASU may be applied to contract modifications and hedging relationships as of any date from March 12, 2020 but no later than December 31, 2022 and should be applied on a prospective basis.

The Company has not yet applied the guidance in this ASU and is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to account for contract modifications, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate that is expected to be discontinued as a result of reference rate reform.

The guidance in ASU 2020-04 may be applied to contract modifications and hedging relationships as of any date from March 12, 2020 but no later than December 31, 2022 and should be applied on a prospective basis.

The Company has not yet applied the guidance in ASU 2020-04 and is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

NOTE 2 — REVENUE

4 unchanged sentences

Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations.

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 0.7 million and $ 1.4 million for the three and six months ended June 30, 2021, respectively and $ 1.0 million and $ 1.7 million for the three and six months ended June 30, 2020, respectively.

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 1.0 million and $ 2.4 million for the three and nine months ended September 30, 2021, respectively, and $ 0.9 million and $ 2.6 million for the three and nine months ended September 30, 2020, respectively.

Net sales exclude taxes that are collected from customers and remitted to the taxing authorities.

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three and six months ended June 30, 2021 and 2020 (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

September 30, 2021

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

13 unchanged sentences

805, Business Combinations, commencing from the acquisition date.

The purchase price was allocated based on the Company’s preliminary estimate of the fair values of the assets acquired which consistent of inventory of $ 0.3 million and liabilities assumed of $ 0.1 million.

The Year & Day acquisition did not have a material impact on the Company's consolidated statement of operations for the three and six months ended June 30, 2021.

The purchase price was allocated based on the Company’s preliminary estimate of the fair values of the assets acquired which consisted of inventory of $ 0.3 million and liabilities assumed of $ 0.1 million.

The Year & Day acquisition did not have a material impact on the Company's consolidated statement of operations for the three and nine months ended September 30, 2021.

NOTE 4 — LEASES

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

The components of lease expense for the three and six months ended June 30, 2021 and 2020 were as follows (in thousands):

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

The components of lease expense for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2021 2020 2021 2020

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

Supplemental cash flow information for lease related liabilities and assets for the six months ended June 30, 2021 and 2020 were as follows (in thousands):

Six Months Ended

September 30, 2021

Supplemental cash flow information for lease related liabilities and assets for the nine months ended September 30, 2021 and 2020 were as follows (in thousands):

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases $ 14,556 $ 10,839

Six Months Ended

Nine Months Ended

September 30,

Right-of-use assets obtained in exchange for lease obligations:

Operating leases $ 1,307 $ 38

During the three and six months ended June 30, 2020, in response to the COVID-19 pandemic, the Company negotiated COVID-19 related rent concessions for several of its leased properties.

During the three and nine months ended September 30, 2020, in response to the COVID-19 pandemic, the Company negotiated COVID-19 related rent concessions for several of its leased properties.

The majority of these rent concessions were in the form of deferred rent payments for one or more months.

1 unchanged sentence

Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic, and elected to account for these rent concessions as if no changes to the lease were made and continued to recognize the straight-line lease expense.

The COVID-19 related deferred rent payments as of June 30, 2020, totaled $1.0 million and were deferred to the second half of fiscal year 2020 and into fiscal year 2021.

As of June 30, 2021, all deferred payments have been paid.

The aggregate future lease payments for operating leases as of June 30, 2021 were as follows (in thousands):

2021 (excluding the six months ended June 30, 2021)

The COVID-19 related deferred rent payments as of September 30, 2020, totaled $1.4 million and were deferred to the fourth quarter of fiscal year 2020 and into fiscal year 2021.

As of September 30, 2021, all deferred payments have been paid.

The aggregate future lease payments for operating leases as of September 30, 2021 were as follows (in thousands):

2021 (excluding the nine months ended September 30, 2021)

Thereafter 38,522

3 unchanged sentences

Average lease terms and discount rates were as follows:

June 30, 2021

September 30, 2021

Operating leases:

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 5 — INVESTMENTS

As of June 30, 2021, the Company owns approximately 27 % of the outstanding capital stock of Grupo Vasconia S.A.B.

As of September 30, 2021, the Company owned approximately 25 % of the outstanding capital stock of Grupo Vasconia S.A.B.

(“Vasconia”), an integrated manufacturer of aluminum products and one of Mexico’s largest housewares companies.

2 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 six months ended June 30, 2021 and 2020 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 and nine months ended September 30, 2021 and 2020 in the accompanying unaudited condensed consolidated statements of operations.

On June 30, 2021, Vasconia sold shares, which diluted the Company’s investment ownership from approximately 30 % to approximately 27 %.

The dilution in ownership did not change the Company's accounting for its investment in Vasconia and the Company continues to apply the equity method of accounting.

The Company recorded a non-cash gain of $ 1.7 million, increasing the Company’s investment balance.

Additionally, a loss of $ 2.0 million was recognized for the proportionate share of the diluted ownership for amounts previously recognized in accumulated other comprehensive loss.

The net loss of $ 0.3 million was included in equity in earnings (losses), net of taxes, in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021.

On July 29, 2021, the Company sold 2.2 million shares further reducing its ownership of approximately 27 % in Vasconia for net cash proceeds of approximately $ 3.0 million.

The Company estimates the gain on the sale, without consideration for income taxes, is $ 1.0 million.

The Company also estimates a non-cash loss of $ 1.4 million for amounts previously recognized in accumulated other comprehensive loss.

The net loss of $ 0.3 million was included in equity in earnings (losses), net of taxes, in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021.

On July 29, 2021, the Company sold 2.2 million shares further reducing its ownership from approximately 27 % to approximately 25 % in Vasconia for net cash proceeds of approximately $ 3.1 million, as a result the Company recorded a gain of $ 1.0 million, after decreasing the Company’s investment balance.

The gain on the sale resulted in a tax expense of $ 0.1 million.

Additionally, a loss of $ 1.4 million was recognized for the proportionate share of the reduced ownership for amounts previously recognized in accumulated other comprehensive loss.

The net loss, including taxes, of $ 0.5 million was included in equity in earnings (losses), net of taxes, in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2021.

The Company continues to apply the equity method of accounting.

The value of the Company’s investment balance has been translated from Mexican Pesos (“MXN”) to U.S.

Dollars ("USD") using the spot rates of MXN 19.86 and MXN 19.88 at June 30, 2021 and December 31, 2020, respectively.

The Company's proportionate share of Vasconia's net income (loss) has been translated from MXN to USD using the following exchange rates:

Dollars (“USD”) using the spot rates of MXN 20.54 and MXN 19.88 at September 30, 2021 and December 31, 2020, respectively.

The Company’s proportionate share of Vasconia’s net income has been translated from MXN to USD using the following exchange rates:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2021 2020 2021 2020

2 unchanged sentences

19.91 - 23.31

The effect of the translation of the Company’s investment, as well as the translation of Vasconia's balance sheet, resulted in an increase to the investment of $ 1.6 million and a decrease of $ 4.0 million during the six months ended June 30, 2021 and 2020, respectively.

The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in an increase to the investment of $ 1.3 million and a decrease of $ 3.4 million during the nine months ended September 30, 2021 and 2020, respectively.

These translation effects are recorded in accumulated other comprehensive loss.

Summarized income statement information for the three and six months ended June 30, 2021 and 2020 for Vasconia in USD and MXN is as follows (in thousands):

Summarized income statement information for the three and nine months ended September 30, 2021 and 2020 for Vasconia in USD and MXN is as follows (in thousands):

Three Months Ended

September 30,

USD MXN USD MXN

3 unchanged sentences

3,886 77,756 2,957 65,229

Net income (loss)

2,952 59,063 536 11,812

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

Six Months Ended

September 30, 2021

Nine Months Ended

September 30,

USD MXN USD MXN

5 unchanged sentences

4,562 91,063 ( 36 ) ( 6,344 )

The Company recorded equity in earnings of Vasconia, net of taxes, of $ 0.7 million and $ 0.5 million for the three and six months ended June 30, 2021, respectively.

The Company recorded equity in losses of Vasconia, net of taxes, of $ 0.6 million and $ 0.3 million for the three and six ended June 30, 2020, respectively.

The Company recorded equity in earnings of Vasconia, net of taxes, of $ 0.7 million and $ 1.2 million for the three and nine months ended September 30, 2021, respectively.

The Company recorded equity in earnings (losses) of Vasconia, net of taxes, of $ 0.1 million and $( 0.2 ) million for the three and nine months ended September 30, 2020, respectively.

Included within the Company's unaudited condensed consolidated balance sheets were the following amounts due to and due from Vasconia (in thousands):

Vasconia due to and due from balances Balance Sheet

Location June 30, 2021 December 31, 2020

Location September 30, 2021 December 31, 2020

Amounts due from Vasconia Prepaid expenses and other current assets $ 69 $ 55

Amounts due to Vasconia Accrued expenses and Accounts payable ( 58 ) ( 91 )

As of June 30, 2021 and December 31, 2020, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $ 39.2 million and $ 32.8 million, respectively.

The carrying value of the Company’s investment in Vasconia was $ 23.8 million and $ 20.0 million as of June 30, 2021 and December 31, 2020, respectively.

Lifetime Brands Do Brasil Participacoes Ltda., a 100 % owned subsidiary of Lifetime Brands, Inc., was dissolved on May 5, 2020.

As of September 30, 2021 and December 31, 2020, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $ 33.7 million and $ 32.8 million, respectively.

The carrying value of the Company’s investment in Vasconia was $ 22.1 million and $ 20.0 million as of September 30, 2021 and December 31, 2020, respectively.

Lifetime Brands Do Brasil Participacoes Ltda., a 100 % owned subsidiary of the Company, was dissolved on May 5, 2020.

The subsidiary held a note receivable relating to the 2016 sale of its 40 % equity interest in GS International S/A (“GSI”), a wholesale distributor of branded housewares products in Brazil, which was accounted for as an equity method investment.

The final installment due on the note receivable was received prior to dissolution of the subsidiary.

Foreign currency translation losses of $ 0.2 million, which were previously recorded as a component of stockholder’s equity within accumulated other comprehensive loss, were recognized in earnings upon dissolution of this subsidiary for the period ended June 30, 2020.

The Company included this loss within equity in losses, net of taxes.

The Company included this loss within equity in earnings (losses), net of taxes.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 6 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands):

June 30, 2021 December 31, 2020

Intangible assets consisted of the following as of September 30, 2021 and December 31, 2020 (in thousands):

September 30, 2021 December 31, 2020

Gross Accumulated

10 unchanged sentences

Total $ 331,436 $ ( 100,422 ) $ 231,014 $ 352,231 $ ( 20,100 ) $ ( 88,106 ) $ 244,025

In the first quarter of 2020, as a result of the economic downturn caused by the COVID-19 pandemic, the Company concluded that a triggering event had occurred and performed an interim impairment test of goodwill and certain intangible assets as of March 31, 2020.

The Company performed the first quarter 2020 interim impairment test of goodwill by comparing its fair value with its carrying value.

1 unchanged sentence

For goodwill, the outcome of the valuation is largely dependent upon estimates made by the Company with respect to significant assumptions, including projected net sales, projected earnings before interest, tax, depreciation and amortization (“EBITDA”), terminal growth rates, and the cost of capital under the discounted cash flow method.

For the three and nine months ended September 30, 2021, there were no impairment triggering events identified.

NOTE 7 — DEBT

2 unchanged sentences

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).

The percentage applied to the Company’s excess cash flow is based on the Company’s Total Net Leverage Ratio (as defined in the Debt Agreements).

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

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

As of June 30, 2021 and December 31, 2020, the total availability under the ABL Agreement was as follows (in thousands):

June 30, 2021

September 30, 2021

As of September 30, 2021 and December 31, 2020, the total availability under the ABL Agreement was as follows (in thousands):

September 30, 2021

December 31, 2020

8 unchanged sentences

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):

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Current portion of Term Loan facility:

6 unchanged sentences

Total Non-current portion of Term Loan facility $ 238,729 $ 238,977

The estimated Excess Cash Flow principal payment recorded at June 30, 2021 represents the Company's estimate for the 2022 Excess Cash Flow payment.

The estimated Excess Cash Flow principal payment recorded at September 30, 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.

8 unchanged sentences

(i) alternate base rate, defined, for any day, as the greater of the prime rate, a federal funds and overnight bank funding based rate plus 0.5 % or one-month LIBOR plus 1.0 %, plus a margin of 0.25 % to 0.75 %, or (ii) LIBOR plus a margin of 1.25 % to 1.75 %.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

There were no outstanding borrowings under the ABL Agreement at June 30, 2021.

September 30, 2021

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, 2021 was 3.5 %.

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

1 unchanged sentence

(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 1.0 %, plus a margin of 3.5 %.

The interest rate on outstanding borrowings under the Term Loan at June 30, 2021 was 4.5 %.

The interest rate on outstanding borrowings under the Term Loan at September 30, 2021 was 4.5 %.

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

1 unchanged sentence

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 June 30, 2021.

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

1 unchanged sentence

Interest Rate Swap Agreements

The Company's total outstanding notional value of interest rate swaps was $ 75.0 million at June 30, 2021.

The Company's total outstanding notional value of interest rate swaps was $ 75.0 million at September 30, 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.

1 unchanged sentence

The original notional values are reduced over these periods.

The aggregate notional value of designated interest rate swaps was $ 50.0 million at June 30, 2021.

In June 2019, the Company entered into additional interest rate swap agreements, with an aggregate notional value of $ 25.0 million at June 30, 2021.

The aggregate notional value of designated interest rate swaps was $ 50.0 million at September 30, 2021.

In June 2019, the Company entered into additional interest rate swap agreements, with an aggregate notional value of $ 25.0 million at September 30, 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

The Company is a party from time to time to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases denominated in foreign currencies.

Fluctuations in the value of certain foreign currencies as compared to the U.S.

dollar may positively or negatively affect the Company’s revenues, gross margins, operating expenses, and retained earnings, all of which are expressed in USD.

The Company is party from time to time to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases denominated in foreign currencies.

Fluctuations in the value of certain foreign currencies as compared to the USD may positively or negatively affect the Company’s revenues, gross margins, operating expenses, and retained earnings, all of which are expressed in USD.

Where the Company deems it prudent, the Company engages in hedging programs using foreign currency forward contracts aimed at limiting the impact of foreign currency exchange rate fluctuations on earnings.

The Company purchases short-term (i.e., 12 months or less) foreign currency forward contracts to protect against currency exchange risks associated with the payment of merchandise purchases to foreign suppliers.

The Company purchases foreign currency forward contracts with terms less than 18 months to protect against currency exchange risks associated with the payment of merchandise purchases to foreign suppliers.

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 aggregate gross notional values of foreign exchange contracts at June 30, 2021 was $ 10.8 million.

The aggregate gross notional values of foreign exchange contracts at September 30, 2021 was $ 31.3 million.

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

2 unchanged sentences

These hedging activities provide only limited protection against currency exchange and credit risk.

Factors that could influence the effectiveness of the Company’s hedging programs include those impacting currency markets and the availability of hedging instruments and liquidity of the credit markets.

All foreign currency forward contracts that the Company enters into are components of hedging

Factors that could influence the effectiveness of the Company’s hedging programs include those impacting currency markets and the availability of hedging instruments and

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

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 June 30, 2021, the Company does not have any foreign currency forward contract derivatives that are not designated as hedges.

September 30, 2021

liquidity of the credit markets.

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, 2021, the Company did not have any foreign currency forward contract derivatives that are not designated as hedges.

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

Derivatives designated as hedging instruments Balance Sheet

Location June 30,

Location September 30,

December 31, 2020

1 unchanged sentence

Other Long-Term Liabilities 410 1,034

Foreign exchange contracts Accrued expenses 290 —

Foreign exchange contracts Prepaid expenses and other current assets 582 —

Other Assets 86 —

Derivatives not designated as hedging instruments Balance Sheet

Location June 30,

Location September 30,

December 31, 2020

4 unchanged sentences

The Company is exposed to credit risk for the net exchanges under these agreements, but not for the notional amounts.

The Company does not anticipate non-performance by any of its counterparties.

As of September 30, 2021, the Company did not anticipate non-performance by any of its counterparties.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Derivatives designated as hedging instruments 2021 2020 2021 2020

3 unchanged sentences

Realized gains and losses on the interest rate swaps are reclassified into earnings as the interest expense on the debt is recognized.

The Company had no terminated or matured interest rate swaps during the three and six months ended June 30, 2021.

The Company had no terminated or matured interest rate swaps during the three and nine months ended September 30, 2021.

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.

During the three months ended June 30, 2021, the Company reclassified $ 0.5 million of cash flow hedges in other comprehensive losses to earnings.

During the three months ended September 30, 2021, the Company reclassified $ 0.5 million of cash flow hedges in other comprehensive losses to earnings.

This was comprised of $ 0.2 million related to realized interest rate swap losses and a loss of $ 0.3 million related to foreign exchange contracts recognized in cost of sales.

During the six months ended June 30, 2021, the Company reclassified $ 0.8 million of cash flow hedges in other comprehensive losses to earnings.

During the nine months ended September 30, 2021, the Company reclassified $ 1.3 million of cash flow hedges in other comprehensive losses to earnings.

This was comprised of $ 0.7 million related to realized interest rate swap losses and a loss of $ 0.6 million related to foreign exchange contracts recognized in cost of sales.

At June 30, 2021, the estimated amount of existing losses expected to be reclassified into earnings within the next 12 months was $ 1.2 million.

During the three months ended June 30, 2020, the Company reclassified $ 0.2 million of cash flow hedges in other comprehensive losses to earnings.

This was comprised of $ 0.3 million related to realized interest rate swap losses and a gain of $ 0.1 million related to foreign exchange contracts recognized in cost of sales.

During the six months ended June 30, 2020, the Company reclassified $ 0.4 million of cash flow hedges in other comprehensive losses to earnings.

This was comprised of $ 0.6 million related to realized interest rate swap losses and a gain of $ 0.2 million related to foreign exchange contracts recognized in cost of sales.

At September 30, 2021, the estimated amount of existing losses expected to be reclassified into earnings within the next 12 months was $ 0.6 million.

During the three months ended September 30, 2020, the Company reclassified $ 0.3 million of cash flow hedges in other comprehensive losses to earnings related to realized interest rate swap losses.

During the nine months ended September 30, 2020, the Company reclassified $ 0.7 million of cash flow hedges in other comprehensive losses to earnings.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

comprised of $ 0.9 million related to realized interest rate swap losses and a gain of $ 0.2 million related to foreign exchange contracts recognized in cost of sales.

Interest and mark to market gains (losses) related to the Company’s derivative financial instruments not designated as hedging instruments that were recognized in earnings are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Derivatives not designated as hedging instruments Location of gain (loss) 2021 2020 2021 2020

5 unchanged sentences

Option Awards

A summary of the Company’s stock option activity and related information for the six months ended June 30, 2021 is as follows:

A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2021 is as follows:

Options Weighted-

6 unchanged sentences

Exercises (1)

( 235,325 ) 11.70

Expirations ( 4,000 ) 19.10

Options outstanding, June 30, 2021

Options outstanding, September 30, 2021

1,095,575 13.64 5.1 $ 5,153

Options exercisable, June 30, 2021

Options exercisable, September 30, 2021

912,115 $ 14.31 4.5 $ 3,700

1 unchanged sentence

Weighted-average years expected to be recognized over 1.6

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 stock options on June 30, 2021.

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 June 30, 2021 and the exercise price.

(1) Includes the exercise of 1,000 options settled in cash in accordance with the Company’s Amended and Restated 2000 Long-Term Incentive Plan ("the Plan").

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 September 30, 2021 and the exercise price.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

Restricted Stock

A summary of the Company’s restricted stock activity and related information for the six months ended June 30, 2021 is as follows:

A summary of the Company’s restricted stock activity and related information for the nine months ended September 30, 2021 is as follows:

Shares Weighted-

5 unchanged sentences

Cancellations ( 400 ) 11.42

Non-vested restricted shares, June 30, 2021

Non-vested restricted shares, September 30, 2021

462,965 $ 11.31

1 unchanged sentence

Weighted-average years expected to be recognized over 1.7

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

The total fair value of restricted stock that vested during the six months ended June 30, 2021 was $ 8.4 million

The total fair value of restricted stock that vested during the nine months ended September 30, 2021 was $ 8.4 million.

Performance shares

2 unchanged sentences

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

A summary of the Company’s performance-based award activity and related information for the six months ended June 30, 2021 is as follows:

A summary of the Company’s performance-based award activity and related information for the nine months ended September 30, 2021 is as follows:

average grant

4 unchanged sentences

Cancellations ( 21,358 ) 12.76

Non-vested performance-based awards, June 30, 2021

Non-vested performance-based awards, September 30, 2021

436,330 $ 10.54

2 unchanged sentences

(1) Represents the target number of shares to be issued for each performance-based award.

The total fair value of performance-based awards that vested during the six months ended June 30, 2021 was $ 2.1 million.

At June 30, 2021, there were 357,483 shares available for awards that could be granted under the Plan, assuming maximum performance of performance-based awards.

The total fair value of performance-based awards that vested during the nine months ended September 30, 2021 was $ 2.1 million.

At September 30, 2021, there were 357,858 shares available for awards that could be granted under the Plan, assuming maximum performance of performance-based awards.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2021

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Stock Compensation Expense Components 2021 2020 2021 2020

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 10 — INCOME (LOSS) PER COMMON SHARE

2 unchanged sentences

Anti-dilutive securities are not included in the computation of diluted earnings per share under the treasury stock method.

The calculations of basic and diluted income (loss) per common share for the three and six months ended June 30, 2021 and 2020 are as follows:

The calculations of basic and diluted income (loss) per common share for the three and nine months ended September 30, 2021 and 2020 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

Stock options and other stock awards

536 350 621 —

Weighted-average shares outstanding – Diluted 22,085 21,285 21,964 20,835

7 unchanged sentences

NOTE 11— INCOME TAXES

Income tax provision of $ 1.8 million and $ 4.2 million for the three and six months ended June 30, 2021, respectively, represent taxes on both U.S.

Income tax provision of $ 5.6 million and $ 9.8 million for the three and nine months ended September 30, 2021, respectively, represent taxes on both U.S.

and foreign earnings at combined effective income tax provision rates of 31.1 % and 31.8 %, respectively.

The effective tax rate for the three and six months ended June 30, 2021 differs from the federal statutory income tax rate of 21.0% 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, net of a benefit related to share based equity compensation.

For the three and six months ended June 30, 2020, the Company had used a discrete effective tax rate method to calculate taxes.

Income tax provision of $ 3.0 million and benefit of $ 0.7 million for the three and six ended June 30, 2020, respectively, represent taxes on both U.S.

and foreign earnings at combined effective income tax provision rate of 3,092.9 % and benefit rate of 2.2 %, respectively.

The effective tax rate for the three and six months ended June 30, 2020 differs from the federal statutory income tax rate of 21.0% primarily due to non-deductible goodwill impairment and other significant permanent items recorded year-to-date.

The effective tax rate for the three and nine months ended September 30, 2021 differs from the federal statutory income tax rate of 21.0% 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.

For the three and nine months ended September 30, 2020, the Company had used a discrete effective tax rate method to calculate taxes.

Income tax provision of $ 3.7 million and $ 3.0 million for the three and nine months ended September 30, 2020, respectively, represent taxes on both U.S.

and foreign earnings at combined effective income tax provision rates of 21.2 % and ( 20.3 )%, respectively.

The effective tax rate for the three months ended September 30, 2020 is consistent with the federal statutory income tax rate of 21.0% and includes an increase for state and local tax expense offset by other items that are not material.

The negative rate for the nine months ended September 30, 2020 reflects 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 primarily due to state and local tax expense, equity based awards, and the non-deductible portion of the U.S.

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

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

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

The Company's New York State tax returns for years 2015-2016 remain under audit with no material assessments as of June 30, 2021.

The Company's New York State tax returns for years 2015-2016 remain under audit.

The audit has been expanded to include tax years 2017-2019.

As of September 30, 2021, there are no material assessments in any given year.

The Company evaluates its tax positions on a quarterly basis and revises its estimates accordingly.

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended June 30, 2021 and June 30, 2020.

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended September 30, 2021 and September 30, 2020.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 12 – BUSINESS SEGMENTS

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

3 unchanged sentences

Total net sales $ 224,777 $ 224,750 $ 607,066 $ 519,960

Income (loss) from operations

Income from operations

$ 30,958 $ 29,111 $ 66,339 $ 28,383

1 unchanged sentence

Unallocated corporate expenses ( 6,876 ) ( 6,252 ) ( 18,244 ) ( 15,922 )

Income (loss) from operations

Income from operations

$ 21,680 $ 21,506 $ 41,927 $ 557

3 unchanged sentences

Total depreciation and amortization $ 5,837 $ 6,090 $ 17,560 $ 18,385

September 30,

2021 December 31,

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 13 — CONTINGENCIES

2 unchanged sentences

(“WSPR”), a wholly-owned subsidiary of the Company, operates a manufacturing facility in San Germán, Puerto Rico that is leased from the Puerto Rico Industrial Development Company (“PRIDCO”).

In March 2008, the United States Environmental Protection Agency (the “EPA”) announced that the San Germán Ground Water Contamination site in Puerto Rico (the “Site”) had been added to the Superfund National Priorities List due to contamination present in the local drinking water supply.

In March 2008, the U.S.

Environmental Protection Agency (the “EPA”) announced that the San Germán Ground Water Contamination site in Puerto Rico (the “Site”) had been added to the Superfund National Priorities List due to contamination present in the local drinking water supply.

In May 2008, WSPR received from the EPA a Notice of Potential Liability and Request for Information pursuant to 42 U.S.C.

19 unchanged sentences

In November 2020, the tolling agreements were extended to November 2021.

The Department of Justice has asked the parties to extend the tolling agreements to November 2022, and we anticipate that all parties will do so.

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.

3 unchanged sentences

The EPA’s estimated total net present worth cost for its selected remedy is $ 17.3 million.

Accordingly, based on the above uncertainties and variables, it is not possible at this time for the Company to estimate its share of liability, if any, related to this matter.

However, 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.

In August 2021, WSPR received a Notice of Liability from the Department of Justice on behalf of the EPA, and in September 2021, WSPR submitted a good faith offer to conduct additional testing and remedial design, which is under consideration by the EPA.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

The Company has reserved $ 0.5 million to cover probable and estimable liabilities with respect to the above testing and remedial design.

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

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.

Customs and Border Protection matter

9 unchanged sentences

The Company also compiled and submitted to CBP a complete set of supporting documents for three additional protests (for the remaining 29 tableware collections that were imported by the Company under the protested shipments).

One of these three was approved on October 15, 2020;

One of the additional protests was approved on October 15, 2020;

the other two remain pending.

If the CBP approves these additional claims and accepts the evidence presented as it did with the Lead Protest, then no additional duties will be owed for the remaining protested shipments.

If the CBP approves these additional claims and accepts the evidence presented, then no additional duties will be owed for the remaining protested shipments.

Because the period of investigation covers a five-year period, the Company is compiling supporting documentation packages for all tableware collections imported during this period.

9 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

NOTE 14 — OTHER

Cash dividends

Dividends declared in the six months ended June 30, 2021 were as follows:

Dividends declared in the nine months ended September 30, 2021 were as follows:

Dividend per share Date declared Date of record Payment date

1 unchanged sentence

$ 0.0425 6/24/2021 8/2/2021 8/16/2021

During the six months ended June 30, 2021, the Company paid dividends of $ 2.0 million.

This included payments made on February 12, 2021 and May 17, 2021 of $ 0.9 million and $ 0.9 million to shareholders of record on January 29, 2021 and May 3, 2021, respectively, and payments of $ 0.2 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended June 30, 2021, the Company reduced retained earnings for the accrual of $ 0.9 million relating to the dividend payable on August 16, 2021.

For the six months ended June 30, 2021, the Company reduced retained earnings for the accrual of $ 1.9 million relating to the dividend payable on May 17, 2021 and August 16, 2021.

On August 3, 2021, the Board of Directors declared a quarterly dividend of $ 0.0425 per share payable on November 15, 2021 to shareholders of record on November 1, 2021.

$ 0.0425 8/3/2021 11/1/2021 11/15/2021

During the nine months ended September 30, 2021, the Company paid dividends of $ 2.9 million.

This included payments made on February 12, 2021, May 17, 2021 and August 16, 2021 of $ 0.9 million, $ 0.9 million and $ 0.9 million, respectively, to shareholders of record on January 29, 2021, May 3, 2021 and August 2, 2021 respectively, and payments of $ 0.2 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended September 30, 2021, the Company reduced retained earnings for the accrual of $ 1.0 million relating to the dividend payable on November 15, 2021.

For the nine months ended September 30, 2021, the Company reduced retained earnings for the accrual of $ 2.9 million relating to the dividend payable on May 17, 2021, August 16, 2021 and November 15, 2021.

On November 2, 2021, the Board of Directors declared a quarterly dividend of $ 0.0425 per share payable on February 14, 2022 to shareholders of record on January 31, 2022.

Supplemental cash flow information

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

3 unchanged sentences

Non-cash investing activities:

Translation gain (loss) adjustment

Translation income (loss) adjustment

$ 1,059 $ ( 5,062 )

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2021

September 30, 2021

Components of accumulated other comprehensive loss, net

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

2 unchanged sentences

Balance at beginning of period $ ( 31,623 ) $ ( 40,991 ) $ ( 35,846 ) $ ( 34,019 )

Translation income (loss) during period

Translation (loss) income during period

( 1,122 ) 2,145 1,059 ( 5,062 )

5 unchanged sentences

Balance at beginning of period $ ( 1,062 ) $ ( 1,612 ) $ ( 1,125 ) $ 1,164

Change in unrealized losses

Change in unrealized gain (losses)

528 ( 89 ) ( 255 ) ( 3,224 )

16 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-Q

Item 1. Financial Statements