What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-05 · 252 added, 151 removed, 726 unchanged (36% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 7,197 $ 27,982

Accounts receivable, less allowances of $ 15,599 at March 31, 2022 and $ 16,544 at December 31, 2021

Accounts receivable, less allowances of $ 13,876 at June 30, 2022 and $ 16,544 at December 31, 2021

106,164 175,076

1 unchanged sentence

Prepaid expenses and other current assets 14,934 11,499

Income taxes receivable 3,729 —

TOTAL CURRENT ASSETS 427,163 485,073

8 unchanged sentences

Current maturity of term loan $ 4,581 $ 5,771

Current maturity of revolving credit facility 20,347 —

Short-term loan 30 —

Accounts payable 61,848 82,573

13 unchanged sentences

Common stock, $ 0.01 par value, shares authorized:

50,000,000 at March 31, 2022 and December 31, 2021;

50,000,000 at June 30, 2022 and December 31, 2021;

shares issued and outstanding:

22,318,096 at March 31, 2022 and 22,018,016 at December 31, 2021

22,058,883 at June 30, 2022 and 22,018,016 at December 31, 2021

Paid-in capital 273,279 271,556

Retained earnings

16,839 17,419

Accumulated other comprehensive loss

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net sales $ 151,314 $ 186,636 $ 334,031 $ 382,289

3 unchanged sentences

Selling, general and administrative expenses 38,258 36,229 77,746 74,337

Income from operations

(Loss) income from operations

( 464 ) 11,001 3,891 20,247

Interest expense ( 3,732 ) ( 3,819 ) ( 7,499 ) ( 7,833 )

Mark to market gain on interest rate derivatives

Income before income taxes and equity in earnings (losses)

Income tax provision

304 46 1,353 544

Equity in earnings (losses), net of taxes

(Loss) income before income taxes and equity in earnings

( 3,892 ) 7,228 ( 2,255 ) 12,958

BASIC INCOME PER COMMON SHARE

Income tax benefit (provision)

98 ( 1,832 ) ( 1,575 ) ( 4,248 )

DILUTED INCOME PER COMMON SHARE

Equity in earnings, net of taxes

334 393 750 146

NET (LOSS) INCOME

$ ( 3,460 ) $ 5,789 $ ( 3,080 ) $ 8,856

BASIC (LOSS) INCOME PER COMMON SHARE

$ ( 0.16 ) $ 0.27 $ ( 0.14 ) $ 0.42

DILUTED (LOSS) INCOME PER COMMON SHARE

$ ( 0.16 ) $ 0.26 $ ( 0.14 ) $ 0.40

See accompanying notes to unaudited condensed consolidated financial statements.

LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Other comprehensive income, net of taxes:

Net (loss) income

$ ( 3,460 ) $ 5,789 $ ( 3,080 ) $ 8,856

Other comprehensive (loss) income, net of taxes:

Translation adjustment ( 4,307 ) 2,394 ( 4,423 ) 4,223

1 unchanged sentence

Effect of retirement benefit obligations 29 41 58 68

Other comprehensive income, net of taxes

Comprehensive income

Other comprehensive (loss) income, net of taxes

( 3,328 ) 2,671 ( 2,807 ) 4,354

Comprehensive (loss) income

$ ( 6,788 ) $ 8,460 $ ( 5,887 ) $ 13,210

See accompanying notes to unaudited condensed consolidated financial statements.

17 unchanged sentences

Shares effectively repurchased for required employee withholding taxes ( 45 ) — ( 568 ) — — ( 568 )

Repurchased stock ( 51 ) ( 1 ) ( 670 ) — — ( 671 )

Stock repurchase ( 51 ) ( 1 ) ( 670 ) — — ( 671 )

Dividends (1)

2 unchanged sentences

22,318 $ 223 $ 271,698 $ 16,839 $ ( 33,028 ) $ 255,732

— — — ( 3,460 ) — ( 3,460 )

Other comprehensive loss, net of taxes

— — — — ( 3,328 ) ( 3,328 )

Net issuance of restricted shares granted to employees and directors 54 1 ( 1 ) — — —

Stock compensation expense — — 1,280 — — 1,280

Net exercise of stock options 3 — — — — —

Shares effectively repurchased for required employee withholding taxes ( 30 ) ( 1 ) ( 369 ) — — ( 370 )

Stock repurchase ( 286 ) ( 2 ) 671 ( 4,197 ) — ( 3,528 )

Dividends (1)

— — — ( 958 ) — ( 958 )

BALANCE AT JUNE 30, 2022

22,059 $ 221 $ 273,279 $ 8,224 $ ( 36,356 ) $ 245,368

Common stock Paid-in

17 unchanged sentences

21,980 $ 220 $ 268,127 $ 2,548 $ ( 37,489 ) $ 233,406

(1) Cash dividends declared per share of common stock were $ 0.0425 and $ 0.0425 in the three months ended March 31, 2022 and 2021, respectively.

— — — 5,789 — 5,789

Total comprehensive income

Net issuance of restricted shares granted to employees and directors 44 0 0 — — —

Stock compensation expense — — 1,323 — — 1,323

Net exercise of stock options 50 1 550 — — 551

Shares effectively repurchased for required employee withholding taxes ( 67 ) ( 1 ) ( 1,024 ) — — ( 1,025 )

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 $ 0.085 and $ 0.085 in the six months ended June 30, 2022 and 2021, respectively.

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

OPERATING ACTIVITIES

Net (loss) income

$ ( 3,080 ) $ 8,856

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Depreciation and amortization 9,937 11,723

3 unchanged sentences

Non-cash lease expense ( 690 ) ( 768 )

(Recovery) provision for doubtful accounts

Recovery for doubtful accounts

( 258 ) ( 146 )

Stock compensation expense 2,539 2,772

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

Undistributed (earnings) from equity investment, net of taxes

( 750 ) ( 146 )

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

3 unchanged sentences

Accounts payable, accrued expenses and other liabilities ( 55,117 ) ( 12,516 )

Income taxes receivable ( 3,729 ) ( 1,750 )

Income taxes payable ( 558 ) ( 4,795 )

NET CASH PROVIDED BY OPERATING ACTIVITIES

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

( 8,857 ) 42,131

8 unchanged sentences

Repayments of term loan ( 6,216 ) ( 10,478 )

Proceeds from short-term loan 30 31

Repayments of short-term loan — ( 31 )

Payments for finance lease obligations ( 17 ) ( 43 )

3 unchanged sentences

Cash dividends paid ( 1,929 ) ( 1,957 )

NET CASH USED IN FINANCING ACTIVITIES

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

7,745 ( 42,214 )

7 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

14 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, 2021.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

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

In 2021 and 2020, net sales for the third and fourth quarters accounted for 56 % and 62 % of total annual net sales, respectively.

The increase in the Company's net sales in the first half of the year in 2021 compared to historical trend was a result of increased demand for the Company's products due shifts in consumer purchasing patterns.

The increase in the Company's net sales in the first half of the year in 2021 compared to historical trend was a result of increased demand for the Company's products due to shifts in consumer purchasing patterns.

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, 2022, did not decrease from the previous two quarters, as a result of increased inventory purchases, to maintain inventory availability and meet expected demand, and higher inventory cost.

The Company’s current estimates contemplate current and expected future conditions, as applicable, however it is reasonably possible that actual conditions could differ from expectations, which could materially affect the Company’s results of operations and financial position.

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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 the Receivable Purchase Agreement, the Company sold to HSBC $ 46.3 million and $ 40.6 million of receivables during the three months ended March 31, 2022 and 2021, 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 both the three months ended March 31, 2022 and 2021.

At March 31, 2022 and 2021, $ 28.1 million and $ 25.6 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

Pursuant to the Receivable Purchase Agreement, the Company sold to HSBC $ 33.5 million and $ 79.8 million of receivables during the three and six months ended June 30, 2022, respectively and $ 38.9 million and $ 79.5 million of receivables during three and six months ended June 30, 2021, respectively.

Charges of $ 0.2 million and $ 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 the three months ended June 30, 2022 and 2021, respectively.

Charges of $ 0.3 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 six months ended June 30, 2022 and 2021, respectively.

At June 30, 2022 and 2021, $ 25.6 million and $ 14.6 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

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

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Fair value of financial instruments

24 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

The Company also evaluates qualitative factors to determine whether impairment indicators exist for its indefinite lived intangibles and performs quantitative tests if required.

24 unchanged sentences

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

A liability has been incurred at the communication date for severance.

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

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

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

New accounting pronouncements

17 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 $ 1.0 million and $ 0.7 million for the three months ended March 31, 2022 and 2021, 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 $ 2.0 million for the three and six months ended June 30, 2022, respectively, and $ 0.7 million and $ 1.4 million for the three and six months ended June 30, 2021, 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

March 31, 2022

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended

June 30, 2022

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, 2022 and 2021 (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

2022 2021 2022 2021

Kitchenware $ 84,345 $ 103,627 $ 198,475 $ 223,622

11 unchanged sentences

(dba S'well Bottle and which the Company refers to as “S'well”).

The Company paid consideration of $ 18.0 million in cash upon closing of the transaction, subject to working capital adjustments.

The Company paid cash consideration of $ 18.0 million.

The transaction also includes up to $ 5.0 million in contingent consideration, subject to the acquired brand reaching certain milestones.

5 unchanged sentences

The maximum undiscounted contingent consideration to be paid under the agreement is $ 5.0 million.

Acquisition related costs of $ 0.9 million were recorded within selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

The purchase price was allocated based on the Company’s preliminary estimate of the fair values of the assets acquired and liabilities assumed, as follows (in thousands):

2 unchanged sentences

Inventory 4,005

Fixed assets 40

Intangible assets 13,000

10 unchanged sentences

The trade name intangible asset is amortized on a straight-line basis over its estimated useful life of 12 years (see Note 6).

The condensed consolidated statement of operations for the three months ended March 31, 2022 includes $ 0.9 million of net sales attributable to the S'well brand.

The condensed consolidated statement of operations includes $ 3.5 million and $ 4.4 million of net sales attributable to the S'well brand for the three and six months ended June 30, 2022, respectively.

On February 26, 2021, the Company acquired the business and certain assets of Year & Day, a designer and distributor of ceramic dinnerware, stainless steel flatware and Italian glassware for cash in the amount of $ 0.2 million.

4 unchanged sentences

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

The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

The components of lease expense for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):

Three Months Ended

Six Months Ended

2022 2021 2022 2021

Operating lease expenses (1) :

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

Supplemental cash flow information for lease related liabilities and assets for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

Three Months Ended

June 30, 2022

Supplemental cash flow information for lease related liabilities and assets for the six months ended June 30, 2022 and 2021 were as follows (in thousands):

Six Months Ended

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

Operating cash flows for operating leases $ 9,618 $ 9,764

Three Months Ended

Six Months Ended

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

Operating leases $ 2,452 $ 1,248

The aggregate future lease payments for operating leases as of March 31, 2022 were as follows (in thousands):

2022 (excluding the three months ended March 31, 2022)

The aggregate future lease payments for operating leases as of June 30, 2022 were as follows (in thousands):

2022 (excluding the six months ended June 30, 2022)

Thereafter 23,703

3 unchanged sentences

Average lease terms and discount rates were as follows:

March 31, 2022

June 30, 2022

Operating leases:

2 unchanged sentences

NOTE 5 — INVESTMENTS

As of March 31, 2022, the Company owned 24.7 % of the outstanding capital stock of Grupo Vasconia S.A.B.

As of June 30, 2022, the Company owned 24.7 % 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.

1 unchanged sentence

The Quotation Key is VASCONI.

For the period ended March 31, 2021, the Company's investment ownership was 30.0 %.

For the period ended June 30, 2021, the Company's investment ownership was 30.0 %.

The Company's investment ownership decreased to approximately 27.0 % on June 30, 2021 and was further reduced to 24.7 % on July 29, 2021 as a result of transactions that occurred in those periods.

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 months ended March 31, 2022 and 2021 in the accompanying unaudited condensed consolidated statements of operations.

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 19.88 and MXN 20.46 at March 31, 2022 and December 31, 2021, respectively.

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, 2022 and 2021 in the accompanying unaudited condensed consolidated statements of operations.

On June 30, 2021, Vasconia issued additional shares of its stock, which diluted the Company’s investment ownership from approximately 30 % to approximately 27 %.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

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

June 30, 2022

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, net of taxes, in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021.

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 20.15 and MXN 20.46 at June 30, 2022 and December 31, 2021, 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

2022 2021 2022 2021

Average exchange rate (USD to MXN) 20.02

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 $ 0.1 million and $ 1.3 million during the three months ended March 31, 2022 and 2021, respectively.

20.02 20.02 - 20.50

20.02 - 20.33

The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in a decrease to the investment of $ 0.9 million and an increase of $ 1.6 million during the six months ended June 30, 2022 and 2021, respectively.

These translation effects are recorded in accumulated other comprehensive loss.

Summarized income statement information for the three months ended March 31, 2022 and 2021 for Vasconia in USD and MXN is as follows (in thousands):

Summarized income statement information for the three and six months ended June 30, 2022 and 2021 for Vasconia in USD and MXN is as follows (in thousands):

Three Months Ended

4 unchanged sentences

518 10,366 6,499 130,110

Net income (loss)

1,403 28,091 2,380 47,661

The Company recorded equity in earnings (losses) of Vasconia, net of taxes, of $ 0.4 million and $( 0.2 ) million for the three months ended March 31, 2022 and 2021, respectively.

Six Months Ended

USD MXN USD MXN

Net Sales $ 130,513 $ 2,643,750 $ 112,685 $ 2,272,569

25,224 511,915 27,879 561,840

Income from operations

5,203 106,406 10,283 207,043

3,134 63,570 1,610 32,000

The Company recorded equity in earnings of Vasconia, net of taxes, of $ 0.3 million and $ 0.8 million for the three and six months ended June 30, 2022, respectively.

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.

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 March 31, 2022 December 31, 2021

Vasconia due to and due from balances Balance Sheet Location June 30, 2022 December 31, 2021

Amounts due from Vasconia Prepaid expenses and other current assets $ 168 $ 80

Amounts due to Vasconia Accrued expenses and Accounts payable ( 13 ) ( 146 )

As of March 31, 2022 and December 31, 2021, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $ 28.7 million and $ 31.5 million, respectively.

The carrying value of the Company’s investment in Vasconia was $ 22.8 million and $ 22.3 million as of March 31, 2022 and December 31, 2021, respectively.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

As of June 30, 2022 and December 31, 2021, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $ 21.3 million and $ 31.5 million, respectively.

The carrying value of the Company’s investment in Vasconia was $ 22.1 million and $ 22.3 million as of June 30, 2022 and December 31, 2021, respectively The Company evaluated the decline in fair value of the investment and concluded that the decline is temporary.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

NOTE 6 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022 December 31, 2021

Intangible assets consisted of the following as of June 30, 2022 and December 31, 2021 (in thousands):

June 30, 2022 December 31, 2021

Gross Accumulated

12 unchanged sentences

Total $ 302,489 $ ( 81,183 ) $ 221,306 $ 331,385 $ ( 14,760 ) $ ( 103,947 ) $ 212,678

(1) The gross value and accumulated amortization at March 31, 2022 reflect a reduction of $ 44.1 million and $( 29.4 ) million, respectively, for the net $ 14.8 million impairment charge on finite-lived intangible assets within the international segment during the period ended December 31, 2021.

A summary of the activities related to the Company’s intangible assets for the three months ended March 31, 2022 consists of the following (in thousands):

(1) The gross value and accumulated amortization at June 30, 2022 reflect a reduction of $ 44.1 million and $( 29.3 ) million, respectively, for the net $ 14.8 million impairment charge on finite-lived intangible assets within the international segment during the period ended December 31, 2021.

A summary of the activities related to the Company’s intangible assets for the six months ended June 30, 2022 consists of the following (in thousands):

Assets Goodwill Total Intangible

5 unchanged sentences

Amortization ( 7,121 ) — ( 7,121 )

Goodwill and Intangible Assets, March 31, 2022

Goodwill and Intangible Assets, June 30, 2022

$ 188,069 $ 33,237 $ 221,306

9 unchanged sentences

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.

One or more tranches of additional term loans (the “Incremental Facilities”) may be added under the Term Loan if certain

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

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

One or more tranches of additional term loans (the “Incremental Facilities”) may be added under the Term Loan if certain conditions are met.

June 30, 2022

conditions are met.

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 March 31, 2022 and December 31, 2021, the total availability under the ABL Agreement was as follows (in thousands):

March 31, 2022

As of June 30, 2022 and December 31, 2021, the total availability under the ABL Agreement was as follows (in thousands):

June 30, 2022

December 31, 2021

Maximum aggregate principal allowed $ 150,000 $ 150,000

Outstanding borrowings under the ABL Agreement ( 20,347 ) —

Standby letters of credit ( 2,765 ) ( 3,659 )

2 unchanged sentences

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

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

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

Consequently, the $ 150.0 million commitment thereunder may not represent actual borrowing capacity.

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):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current portion of Term Loan facility:

6 unchanged sentences

Total Non-current portion of Term Loan facility $ 237,564 $ 241,873

The estimated Excess Cash Flow principal payment recorded at March 31, 2022 represents the Company’s estimate for the 2023 Excess Cash Flow payment.

The estimated Excess Cash Flow principal payment recorded at June 30, 2022 represents the Company’s estimate for the 2023 Excess Cash Flow payment.

The 2022 Excess Cash Flow payment, paid on March 30, 2022, totaled $ 6.2 million.

5 unchanged sentences

subsidiary guarantors, subject to certain exceptions.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

pledged as collateral in favor of lenders under the Term Loan and a second-priority lien in the Term Loan Collateral in favor of the lenders under the ABL Agreement.

June 30, 2022

Borrowings under the ABL Agreement bear interest, at the Company’s option, at one of the following rates:

2 unchanged sentences

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

There were no outstanding borrowings under the ABL Agreement at March 31, 2022.

The interest rate on outstanding borrowings under the ABL Agreement at June 30, 2022 was between 2.44 % and 5.00 %.

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 2.0 %, 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 March 31, 2022 was 4.5 %.

The interest rate on outstanding borrowings under the Term Loan at June 30, 2022 was 4.6 %.

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 March 31, 2022.

The Company was in compliance with the covenants of the Debt Agreements at June 30, 2022.

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 $ 69.0 million at March 31, 2022.

The Company's total outstanding notional value of interest rate swaps was $ 50.0 million at June 30, 2022.

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 $ 44.0 million at March 31, 2022.

In June 2019, the Company entered into additional interest rate swap agreements, with an aggregate notional value of $ 25.0 million at March 31, 2022.

The aggregate notional value of designated interest rate swaps was $ 25.0 million at June 30, 2022.

In June 2019, the Company entered into additional interest rate swap agreements, with an aggregate notional value of $ 25.0 million at June 30, 2022.

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.

3 unchanged sentences

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 foreign currency forward contracts with terms less than 18 months to protect against currency exchange risks associated with the payment of

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.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

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 March 31, 2022 was $ 18.0 million.

June 30, 2022

The aggregate gross notional values of foreign exchange contracts at June 30, 2022 was $ 13.5 million.

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

4 unchanged sentences

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 March 31, 2022, the Company did 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 June 30, 2022, the Company did not have any foreign currency forward contract derivatives that are not designated as hedges.

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

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 March 31, 2022 December 31, 2021

Interest rate swaps Accrued expenses $ 203 $ 288

Derivatives designated as hedging instruments Balance Sheet Location June 30, 2022 December 31, 2021

Interest rate swaps Prepaid expenses and other current assets $ 64 $ —

Accrued expenses — 288

Other long-term liabilities — 292

Foreign exchange contracts Prepaid expenses and other current assets 1,563 461

Derivatives not designated as hedging instruments Balance Sheet Location March 31, 2022 December 31, 2021

Derivatives not designated as hedging instruments Balance Sheet Location June 30, 2022 December 31, 2021

Interest rate swaps Other assets $ 674 $ —

4 unchanged sentences

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

As of March 31, 2022, 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, net of taxes, as follows (in thousands):

As of June 30, 2022, the Company did not anticipate non-performance by any of its counterparties.

Three Months Ended

June 30, Six Months Ended

Derivatives designated as hedging instruments 2022 2021 2022 2021

2 unchanged sentences

$ 950 $ 236 $ 1,558 $ 63

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 months ended March 31, 2022.

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

Realized gains and losses on the interest rate swaps that are reported in other comprehensive (loss) income 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, 2022.

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

During the three months ended June 30, 2022, the Company reclassified $ 0.1 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This was comprised of $ 0.1 million related to realized interest rate swap losses and a gain of

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

During the three months ended March 31, 2022, the Company reclassified $ 0.1 million of cash flow hedges in accumulated other comprehensive losses to earnings.

June 30, 2022

$ 0.2 million related to foreign exchange contracts recognized in cost of sales.

During the six months ended June 30, 2022, the Company reclassified $ 0.02 million of cash flow hedges in accumulated other comprehensive losses to earnings.

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

At March 31, 2022, the estimated amount of existing net gains expected to be reclassified into earnings within the next 12 months was $ 0.5 million.

During the three months ended March 31, 2021, the Company reclassified $ 0.4 million of cash flow hedges in accumulated other comprehensive losses to earnings related to realized interest rate swap losses.

At June 30, 2022, the estimated amount of existing net gains expected to be reclassified into earnings within the next 12 months was $ 1.4 million.

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

This was comprised of $ 0.5 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.

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

Derivatives not designated as hedging instruments Location of gain (loss) 2022 2021 2022 2021

2 unchanged sentences

Interest expense ( 72 ) ( 115 ) ( 183 ) ( 226 )

$ 232 $ ( 69 ) $ 1,170 $ 318

NOTE 9 — STOCK COMPENSATION

On June 23, 2022, the stockholders of the Company approved an amendment and restatement of the Company's Amended and Restated 2000 Long Term Incentive Plan (the "Plan").

The amendment and restatement of the Plan revised the terms and conditions of the Plan to, among other things, increase the shares available for grant under the Plan by 1,180,000 shares.

As of June 30, 2022, there were 1,123,954 shares available for the grant of awards under the Plan, assuming maximum performance of performance-based awards.

Option Awards

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2022 is as follows:

A summary of the Company’s stock option activity and related information for the six months ended June 30, 2022 is as follows:

Options Weighted-

4 unchanged sentences

1,094,575 $ 13.64

Grants 56,000 11.45

Exercises ( 60,000 ) 11.64

Cancellations ( 5,125 ) 10.60

Options outstanding, March 31, 2022

Expirations ( 11,850 ) 13.30

Options outstanding, June 30, 2022

1,073,600 13.66 4.9 $ 668

Options exercisable, March 31, 2022

Options exercisable, June 30, 2022

958,725 $ 13.93 4.4 $ 579

1 unchanged sentence

Weighted-average years expected to be recognized over 2.1

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 March 31, 2022.

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 March 31, 2022 and the exercise price.

The intrinsic value is calculated for each

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

in-the-money stock option as the difference between the closing price of the Company’s common stock on June 30, 2022 and the exercise price.

Restricted Stock

A summary of the Company’s restricted stock activity and related information for the three months ended March 31, 2022 is as follows:

A summary of the Company’s restricted stock activity and related information for the six months ended June 30, 2022 is as follows:

Shares Weighted-

5 unchanged sentences

Cancellations ( 5,256 ) 10.73

Non-vested restricted shares, March 31, 2022

Non-vested restricted shares, June 30, 2022

519,259 $ 11.63

1 unchanged sentence

Weighted-average years expected to be recognized over 1.8

The total fair value of restricted stock that vested during the three months ended March 31, 2022 was $ 0.6 million.

The total fair value of restricted stock that vested during the six months ended June 30, 2022 was $ 2.1 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 three months ended March 31, 2022 is as follows:

A summary of the Company’s performance-based award activity and related information for the six months ended June 30, 2022 is as follows:

average grant

5 unchanged sentences

Cancellations ( 3,776 ) 10.50

Non-vested performance-based awards, March 31, 2022

Non-vested performance-based awards, June 30, 2022

400,654 $ 11.56

4 unchanged sentences

These awards vested in the three months ended March 31, 2022.

The total fair value of performance-based awards that vested during the three months ended March 31, 2022 was $ 2.0 million.

At March 31, 2022, there were 40,288 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

March 31, 2022

The total fair value of performance-based awards that vested during the six months ended June 30, 2022 was $ 2.0 million.

Cash-settled performance-based awards

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

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

The number of deferred stock units earned will be determined based on the attainment of specified performance goals at the end of the performance period, as

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

determined by the Compensation Committee of the Board of Directors.

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

A summary of the Company’s cash-settled performance-based awards activity and related information for the three months ended March 31, 2022 is as follows:

A summary of the Company’s cash-settled performance-based awards activity and related information for the six months ended June 30, 2022 is as follows:

Cash-settled performance-based awards (1)

2 unchanged sentences

Cancellations ( 1,237 ) 11.85

Non-vested cash-settled performance-based awards, March 31, 2022

Non-vested cash-settled performance-based awards, June 30, 2022

86,588 $ 11.04

10 unchanged sentences

Three Months Ended

Six Months Ended

Stock Compensation Expense Components 2022 2021 2022 2021

3 unchanged sentences

Liability based stock option expense ( 1 ) 5 ( 6 ) 10

Cash-settled performance-based awards 28 —

Cash-settled performance-based awards expense 86 — 114 —

Total Stock Compensation Expense $ 1,365 $ 1,328 $ 2,539 $ 2,772

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

NOTE 10 — INCOME PER COMMON SHARE

Basic income per common share has been computed by dividing net income by the weighted-average number of shares of the Company’s common stock outstanding during the relevant period.

Diluted income per common share adjusts net income and basic income per common share for the effect of all potentially dilutive shares of the Company’s common stock.

June 30, 2022

NOTE 10 — (LOSS) INCOME PER COMMON SHARE

Basic (loss) income per common share has been computed by dividing net (loss) income by the weighted-average number of shares of the Company’s common stock outstanding during the relevant period.

Diluted (loss) income per common share adjusts net (loss) income and basic (loss) income per common share for the effect of all potentially dilutive shares of the Company’s common stock.

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 per common share for the three months ended March 31, 2022 and 2021 are as follows:

The calculations of basic and diluted (loss) income per common share for the three and six months ended June 30, 2022 and 2021 are as follows:

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands, except per share amounts)

Net income – Basic and Diluted

Net (loss) income – Basic and Diluted

$ ( 3,460 ) $ 5,789 $ ( 3,080 ) $ 8,856

3 unchanged sentences

Weighted-average shares outstanding – Diluted 21,531 21,965 21,642 21,903

Basic income per common share

Basic (loss) income per common share

$ ( 0.16 ) $ 0.27 $ ( 0.14 ) $ 0.42

Diluted income per common share

Diluted (loss) income per common share

$ ( 0.16 ) $ 0.26 $ ( 0.14 ) $ 0.40

Antidilutive Securities (1)

1,704 423 1,671 422

(1) Stock options and other stock awards that have been excluded from the denominator as their inclusion would have been anti-dilutive.

NOTE 11— INCOME TAXES

Income tax provision of $ 1.7 million and $ 2.4 million for the three months ended March 31, 2022 and 2021, respectively, represent taxes on both U.S.

Income tax benefit of $ 0.1 million and income tax provision of $ 1.6 million for the three and six months ended June 30, 2022, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax benefit rate of 2.5 % and an income tax provision rate of ( 69.8 )%, respectively.

The negative rate for the six months ended June 30, 2022 reflects tax expense on a pretax financial reporting loss.

The effective tax rate for the three and six months ended June 30, 2022 differs from the federal statutory income tax rate of 21.0 % primarily due to foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

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.

and foreign earnings at combined effective income tax provision rates of 25.3 % and 32.8 %, respectively.

The effective tax rate for both the three months ended March 31, 2022 and 2021 differs from the federal statutory income tax rate of 21.0 % primarily due to state and local tax expenses, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

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.

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

2 unchanged sentences

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 March 31, 2022 and March 31, 2021.

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended June 30, 2022 and June 30, 2021.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 12 – BUSINESS SEGMENTS

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

2 unchanged sentences

Total net sales $ 151,314 $ 186,636 $ 334,031 $ 382,289

Income from operations

(Loss) income from operations

$ 7,530 $ 18,274 $ 21,856 $ 35,381

1 unchanged sentence

Unallocated corporate expenses ( 4,922 ) ( 5,657 ) ( 10,775 ) ( 11,368 )

Income from operations

(Loss) income from operations

$ ( 464 ) $ 11,001 $ 3,891 $ 20,247

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 13 — CONTINGENCIES

33 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

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.

27 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 14 — OTHER

Cash dividends

Dividends declared in the three months ended March 31, 2022 were as follows:

Dividends declared in the six months ended June 30, 2022 were as follows:

Dividend per share Date declared Date of record Payment date

$ 0.0425 3/8/2022 5/2/2022 5/16/2022

During the three months ended March 31, 2022, the Company paid dividends of $ 1.0 million.

This included payments made on February 14, 2022 of $ 0.9 million to shareholders of record on January 31, 2022 and payments of $ 0.1 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended March 31, 2022, the Company reduced retained earnings for the accrual of $ 1.0 million relating to the dividend payable on May 16, 2022.

$ 0.0425 6/23/2022 8/1/2022 8/15/2022

During the six months ended June 30, 2022, the Company paid dividends of $ 1.9 million.

This included payments made on February 14, 2022 and May 16, 2022 of $ 0.9 million and $ 0.9 million to stockholders of record on January 31, 2022 and May 2, 2022, respectively, and payments of $ 0.1 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended June 30, 2022, the Company reduced retained earnings for the accrual of $ 1.0 million relating to the dividend payable on August 15, 2022.

On August 2, 2022, the Board of Directors declared a quarterly dividend of $ 0.0425 per share of common stock payable on November 15, 2022 to stockholders of record on November 1, 2022.

Stock repurchase program

1 unchanged sentence

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

During the three months ended March 31, 2022, the Company repurchased 51,145 shares for a total cost of $ 0.7 million and thereafter retired the shares.

During the three and six months ended June 30, 2022, the Company repurchased 285,646 and 336,791 shares, respectively, for a total cost of $ 3.5 million and $ 4.2 million respectively, and thereafter retired the shares.

Please see Part II, Item 2—Unregistered Sales of Equity Securities and Use of Proceeds included in this Quarterly Report on Form 10-Q.

Supplemental cash flow information

Three Months Ended

Six Months Ended

(in thousands)

3 unchanged sentences

Non-cash investing activities:

Translation (loss) income adjustment

$ ( 116 ) $ 1,829

Net (loss) on dilution of Vasconia ownership $ — $ ( 310 )

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

Components of accumulated other comprehensive loss, net

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

(in thousands)

2 unchanged sentences

Translation adjustment during period ( 4,307 ) 352 ( 4,423 ) 2,181

Amounts reclassified from accumulated other comprehensive loss (1)

— 2,042 — 2,042

Translation Adjustment ( 4,307 ) 2,394 ( 4,423 ) 4,223

Balance at end of period $ ( 36,175 ) $ ( 31,623 ) $ ( 36,175 ) $ ( 31,623 )

2 unchanged sentences

Change in unrealized gains (losses)

1,079 ( 229 ) 1,577 ( 783 )

Amounts reclassified from accumulated other comprehensive loss:

Settlement of cash flow hedge (2)

Net change in cash flow hedges, net of taxes of $ 170 and $( 19 )

( 129 ) 465 ( 19 ) 846

Net change in cash flow hedges, net of taxes of $ 243 , $ 73 , $ 413 , $ 54

950 236 1,558 63

Balance at end of period $ 1,636 $ ( 1,062 ) $ 1,636 $ ( 1,062 )

6 unchanged sentences

$ ( 36,356 ) $ ( 34,818 ) $ ( 36,356 ) $ ( 34,818 )

(1) Amounts are recorded in equity in earnings on the unaudited condensed statements of operations.

(2) Amounts reclassified are recorded in interest expense and cost of sales on the unaudited condensed consolidated statement of operations.

1 unchanged sentence

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