What changed in this filing

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Item 9A. Controls and Procedures

2023-03-09 compared with 2022-03-09 · 417 added, 326 removed, 1308 unchanged (36% of the section changed)

15 unchanged sentences

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

Projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate.

Accordingly, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

5 unchanged sentences

Opinion on Internal Control Over Financial Reporting

We have audited Lifetime Brands, Inc.’s and subsidiaries internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

We have audited Lifetime Brands, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Lifetime Brands, Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2022 consolidated financial statements of the Company and our report dated March 9, 2023 expressed an unqualified opinion thereon.

19 unchanged sentences

Other Information

Not applicable.

The information set forth below is included herein, by our option, for the purpose of providing disclosure under “Item 5.02 – Departure of Directors or Certain Officers;

Election of Directors;

Appointment of Certain Officers;

Compensatory Arrangements of Certain Officers” of Form 8-K.

On March 8, 2023, the Company entered into amendments (each, an “Employment Agreement Amendment”) to the existing effective employment agreements between the Company and each of Robert B.

Kay, Laurence Winoker, and Daniel Siegel.

The Employment Agreement Amendment for Robert B.

Kay increases his base salary from $900,000 to $1,000,000, effective March 2, 2023.

The Employment Agreement Amendment for Daniel Siegel, increases his base salary from $650,000 to $663,000, effective January 1, 2023.

The Employment Agreement Amendment for Laurence Winoker, increases his base salary from $425,000 to $446,250, effective January 1, 2023.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

18 unchanged sentences

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

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

10.5 Letter Agreement Amending and Supplementing Employment Agreement between Lifetime Brands, Inc.

7 unchanged sentences

10.12 Amended and Restated 2000 Incentive Bonus Compensation Plan, effective as of June 25, 2020 (filed as Appendix B to the Registrant's Definitive Proxy Statement on Schedule 14A, filed on April 29, 2020 and incorporated by reference herein)

10.13 Amended and Restated 2000 Incentive Bonus Compensation Plan, effective as of June 2 3 , 202 2 (filed as Appendix B to the Registrant's Definitive Proxy Statement on Schedule 14A, filed on April 2 8 , 202 2 and incorporated by reference herein)

10.14 Amended and Restated Employment Agreement, dated September 10, 2015, between the Company and Laurence Winoker (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 16, 2015)*

2 unchanged sentences

and Laurence Winoker, effective April 13, 2020 (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020)

10.15 Amendment No.

1 dated September 5, 2007 to the Shares Subscription Agreement by and among the Company, Ekco, S.A.B.

José Ramón Elizondo Anaya and Mr.

Miguel Ángel Huerta Pando (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008)

10.17 Third Amendment to the Amended and Restated Employment Agreement, dated as of August 1, 2022, between the Company and Laurence Winoker (incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2022)

10.18 Fourth Amendment to the Amended and Restated Employment Agreement , dated as of March 8, 2023, by and between the Company .

and Laurence Winoker.

10.19 Shares Subscription Agreement by and among the Company, Ekco, S.A.B.

9 unchanged sentences

Miguel Ángel Huerta Pando (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008)

10.19 Asset Purchase Agreement between Mikasa, Inc.

and the Company, dated as of June 6, 2008 (incorporated by reference to Exhibit 99.1 to the Company’s Form 10-Q for the quarter ended June 30, 2008)

10.20 Share Purchase Agreement, dated November 4, 2011, by and among the Company and Creative Tops Holding Limited and Creative Tops Far East Limited (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed November 8, 2011)

10.21 Senior Secured Credit Agreement, dated as of July 27, 2012, by and among the Company, the Subsidiary Guarantors, the Lenders and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013)

10.22 Amendment No.

1 to the Senior Secured Credit Agreement, dated as of November 13, 2012, by and among the Company, the Subsidiary Guarantors party thereto, the Swap Agreement Counterparty, the financial institutions party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 99.3 to the Company’s Current Report on Form 8-K filed June 27, 2013)

10.23 Amendment No.

2 to the Senior Secured Credit Agreement, dated as of June 21, 2013, by and among the Company, the Subsidiary Guarantors party thereto, the financial institutions party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed June 27, 2013)

10.24 Share Purchase Agreement relating to Thomas Plant (Birmingham) Limited, dated January 15, 2014, by and among the Company and Andrew Plant, Richard Plant, Peter Bushell, and Sally Wright (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed January 17, 2014)

10.25 Deed of Variation and Settlement, dated April 1, 2015, by and among the Company and Andrew Plant, Richard Plant, Peter Bushell, and Sally Wright (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 8, 2015)

10.22 Employment Agreement, dated as of November 8, 2017, between the Company and Daniel Siegel (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017)*

4 unchanged sentences

and Daniel Siegel (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed February 1, 2021)

10.26 Third Amendment, dated March 8, 2023, to the Employment Agreement, dated as of November 8, 2017, by and between Lifetime Brands, Inc.

and Daniel Siegel.

10.27 Form of Amended and Restated Director’s and Officer’s Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 28, 2016)

9 unchanged sentences

and Robert B.

Kay, effective April 13, 2020 (incorporated by reference to Exhibit 10.

1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020)

Kay, effective April 13, 2020 (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020)

10.34 Second Amendment, dated February 1, 2021, to the Employment Agreement, dated as of December 22, 2017, by and between Lifetime Brands, Inc.

and Robert Kay (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed February 1, 2021)

10.35 Third Amendment, dated March 8, 2023, to the Employment Agreement, dated as of December 22, 2017, by and between Lifetime Brands, Inc.

and Robert Kay.

10.36 Stockholders Agreement, dated as of March 2, 2018, between the Company and Taylor Parent, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 6, 2018)

2 unchanged sentences

(incorporated by reference to Exhibit 10.01 to the Company’s Current Report on Form 8-K filed November 15, 2018)

10.41 Credit Agreement, dated as of March 2, 2018, by and among the Company, the other Borrowers from time to time party thereto, the other Loan Parties from time to time party thereto, the Lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.

0 2 to the Company’s Current Report on Form 8-K filed March 6, 2018)

10.39 Credit Agreement, dated as of March 2, 2018, by and among the Company, the other Borrowers from time to time party thereto, the other Loan Parties from time to time party thereto, the Lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.02 to the Company’s Current Report on Form 8-K filed March 6, 2018)

10.40 Amendment No.

1, dated as of December 28, 2021, by and among the Company, the other Loan Parties party thereto (as defined therein), and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by re ference to Exhibit 10.01 to the Company's Current Report on Form 8-K filed Decem b er 29, 2021)

1, dated as of December 28, 2021, by and among the Company, the other Loan Parties party thereto (as defined therein), and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.01 to the Company's Current Report on Form 8-K filed December 29, 2021)

10.41 Amendment No.

2, dated as of August 26, 2022, by and among the Company, the other Loan Parties party thereto (as defined therein), and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.

0 1 to the Company's Current Report on Form 8-K filed August 29, 2022)

10.42 Loan Agreement, dated as of March 2, 2018, by and among the Company, the other Loan Parties from time to time party thereto, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Golub Capital LLC, as Syndication Agent.

(incorporated by reference to Exhibit 10.

0 3 to the Company’s Current Report on Form 8-K filed March 6, 2018)

10.44 Amendment No.1 to the Receivables Purchase Agreement, dated as of October 9, 2020 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser (incorporated by reference to Exhibit 10.

43 to the Company's Annual Report on Form 10- K for the year ended December 31, 2020)

(incorporated by reference to Exhibit 10.03 to the Company’s Current Report on Form 8-K filed March 6, 2018)

10.43 Amendment No.

1 , dated as of December 29, 2022 , by and among the Company, the other Loan Parties from time to time party thereto, the Lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Golub Capital LLC, as Syndication Agent.

(incorporated by reference to Exhibit 10.0 1 to the Company’s Current Report on Form 8-K filed January 3 , 20 23 )

10.45 Amendment No.2 to the Receivables Purchase Agreement, dated as of January 6, 2023 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser

10.46 Amendment to Option Grant Certificates, dated as of March 8, 2023 by and among the Company and Jeffrey Siegel

21.1 Subsidiaries of the Company

29 unchanged sentences

Kay (Principal Executive Officer)

/s/ Laurence Winoker Senior Vice President – Finance, March 9, 2022

/s/ Laurence Winoker Executive Vice President March 9, 2023

Laurence Winoker Treasurer and Chief Financial Officer

7 unchanged sentences

Cherrie Nanninga

/s/ Craig Phillips Director March 9, 2022

Craig Phillips

/s/ Veronique Gabai-Pinsky Director March 9, 2023

13 unchanged sentences

Consolidated Statements of Operations for the Years ended December 31, 202 2 , 202 1 , and 20 20

Consolidated Statements of Comprehensive Income (Loss) for the Years ended December 31, 202 1 , 20 20 and 201 9

Consolidated Statements of Comprehensive (Loss) Income for the Years ended December 31, 202 2 , 202 1 and 20 20

Consolidated Statements of Stockholders’ Equity for the Years ended December 31, 202 2 , 202 1 , and 20 20

9 unchanged sentences

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

(and subsidiaries) (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss , stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive (loss) income , stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

4 unchanged sentences

and Subsidiaries is stated at $( 3.3 ) million in 2022, $ 1.8 million in 2021 and $ 1.5 million in 2020.

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

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

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

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 9, 2023 expressed an unqualified opinion thereon.

9 unchanged sentences

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

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

Critical Audit Matters

2 unchanged sentences

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

Long-lived Asset Impairment

Description of the Matter

As described in Note 7 to the consolidated financial statements, during the fourth quarter of 2021, the Company identified triggering events, which resulted in the Company assessing its International asset group for recoverability.

The Company's test of recoverability and fair value measurement for the asset group resulted in an impairment charge of $14.8 million relating to finite-lived intangible assets in the International segment.

Auditing the Company's measurement of impairment involved a high degree of subjectivity as estimates underlying the determination of fair values were based on assumptions about future economic conditions.

Significant assumptions used in the Company's fair value estimates included projected net sales, earnings before interest, taxes, depreciation and amortization (“EBITDA”), terminal growth rates and the discount rate.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's processes to determine its asset groups, the fair value of the related assets and calculation of the long-lived asset impairment charges.

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

To test the estimated fair value of the company's long-lived assets, we performed audit procedures that included, among other procedures, assessing methodologies and testing the significant assumptions and the underlying data used by the Company in its analyses.

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

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

We assessed the appropriateness of the Company’s projections by comparing them to general and sector-specific market expectations.

We engaged our valuation specialists to assist in assessing the reasonableness of the discount rate, the valuation models and significant assumptions used in the valuation of the finite-lived assets in the International segment.

In order to reflect the uncertainty inherent in the projections, we inspected the sensitivity analyses performed by the Company and performed our own sensitivity analyses by increasing or decreasing the significant assumptions and evaluated the potential outcome for each of the finite-lived assets.

Estimation of Variable Consideration

1 unchanged sentence

For the year ended December 31, 2022, the Company reported net sales of $727.7 million.

As described in Note 2 of the audited consolidated financial statements, the Company offers various sales incentives and promotional programs to its customers in the normal course of business.

These sales incentives and promotional spending, typically including cooperative advertising, buydowns, volume rebates and discounts, represent variable consideration and are reflected as reductions in net sales in the Company’s consolidated statements of operations.

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

Auditing the Company’s measurement of the variable consideration associated with discounts is challenging because the calculation involves subjective estimates of future price concessions, number of units sold by distributors and product returns.

As described in Note 2 to the consolidated financial statements, the Company offers various sales incentives and promotional programs to its customers in the normal course of business.

These sales incentives and promotions represent variable consideration and are reflected as reductions in net sales in the Company’s consolidated statements of operations.

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

Auditing the Company’s measurement of the variable consideration associated with the non-contractual sales incentives and promotions is challenging because the method of calculation involves subjective management assumptions about estimates of the expected discounts.

For example, in addition to historical experience, the Company considers specific known events and industry trends to estimate the expected discounts.

Changes in these assumptions can have a material effect on the amount of net sales recognized.

3 unchanged sentences

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

Among other procedures, we inspected the sales contracts and communications between the sales department and customers that were used to support the estimation of the variable consideration.

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

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

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

1 unchanged sentence

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

Valuation of Goodwill and Trade Names

Description of the Matter

At December 31, 2022, the Company’s intangible assets include goodwill in the U.S.

reporting unit with a carrying value of $33.2 million and two indefinite-lived trade names in the U.S.

reportable segment with an aggregated carrying value of $49.6 million.

As discussed in Note 7 of the audited consolidated financial statements, the Company tests goodwill and indefinite-lived trade names for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

An impairment loss is recognized when the fair value of goodwill or the indefinite-lived trade names is less than its carrying amount.

Auditing management’s annual goodwill and indefinite-lived trade names impairment tests was complex as valuation of the reporting unit and indefinite-lived trade names involves considerable management judgment and estimation.

For goodwill, the Company estimated the fair value of the reporting unit using a combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.

The discounted cash flow method is largely dependent upon estimates made by management 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.

For the guideline public company method, the significant assumptions related to the selection of the appropriate guideline companies and related valuation multiples used in the analysis.

For indefinite-lived trade names, significant assumptions used in management’s fair value analysis included future net sales for the related brands, royalty rates, and the cost of capital.

These assumptions are forward-looking.

Changes in market, industry and company-specific conditions could materially impact the determination of the fair value of these assets and the measurement of the impairments.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s valuation of goodwill and indefinite-lived trade names.

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

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

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

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

We assessed the appropriateness of the Company’s projections by comparing them to general and sector-specific market expectations.

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

reporting unit as well as the indefinite-lived trade names.

reporting unit and the indefinite-lived trade names in the U.S.

reportable segment.

For the guideline public company method, we evaluated the reasonableness of the selected guideline public companies and the resulting market multiples calculation.

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

/s/ Ernst & Young LLP

58 unchanged sentences

Goodwill and other intangible asset impairments — 14,760 20,100

Wallace facility remediation expense 5,140 500 —

Restructuring expenses 1,420 — 211

Income (loss) from operations

Income from operations

24,263 50,842 24,970

2 unchanged sentences

1,971 1,062 ( 2,144 )

Income (loss) before income taxes and equity in earnings

Income before income taxes and equity in (losses) earnings

9,029 36,380 5,549

1 unchanged sentence

( 5,728 ) ( 16,541 ) ( 9,866 )

Equity in earnings, net of taxes

Equity in (losses) earnings, net of taxes

( 9,467 ) 962 1,310

NET INCOME (LOSS)

NET (LOSS) INCOME

$ ( 6,166 ) $ 20,801 $ ( 3,007 )

BASIC INCOME (LOSS) PER COMMON SHARE

BASIC (LOSS) INCOME PER COMMON SHARE

$ ( 0.29 ) $ 0.97 $ ( 0.14 )

DILUTED INCOME (LOSS) PER COMMON SHARE

DILUTED (LOSS) INCOME PER COMMON SHARE

$ ( 0.29 ) $ 0.94 $ ( 0.14 )

1 unchanged sentence

LIFETIME BRANDS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

1 unchanged sentence

2022 2021 2020

Net income (loss)

Net (loss) income

$ ( 6,166 ) $ 20,801 $ ( 3,007 )

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Translation adjustment ( 4,320 ) 4,094 ( 1,827 )

Amount reclassified 3,404 235 —

Total translation gain (loss)

4,094 ( 1,827 ) ( 292 )

Deferred gains (losses) on cash flow hedges:

Fair value adjustment, net of tax of $( 246 ), $ 803 and $( 347 )

( 311 ) ( 3,273 ) 1,212

Settlement of cash flow hedges 1,514 984 ( 209 )

Total deferred gains (losses) on cash flow hedges

1,203 ( 2,289 ) 1,003

Net change in cash flow hedges 845 1,203 ( 2,289 )

Effect of retirement benefit obligations 1,170 326 ( 601 )

Net income (loss) arising from retirement benefit obligations, net of tax of $( 64 ), $ 259 and $ 251

191 ( 680 ) ( 601 )

amortization of loss included in net income (loss), net of tax of $( 45 ), $( 52 ) and $( 34 )

Total effects of retirement benefit obligations 326 ( 601 ) ( 550 )

Other comprehensive income (loss), net of tax

Other comprehensive (loss) income, net of taxes

( 2,305 ) 5,623 ( 4,717 )

Comprehensive income (loss)

Comprehensive (loss) income

$ ( 8,471 ) $ 26,424 $ ( 7,724 )

10 unchanged sentences

— — — ( 3,007 ) — ( 3,007 )

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

— — — — ( 4,717 ) ( 4,717 )

9 unchanged sentences

— — — 20,801 — 20,801

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

— — — — 5,623 5,623

10 unchanged sentences

— — — ( 6,166 ) — ( 6,166 )

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

— — — — ( 2,305 ) ( 2,305 )

5 unchanged sentences

( 93 ) ( 1 ) ( 1,066 ) — — ( 1,067 )

Stock repurchase ( 597 ) ( 6 ) — ( 6,314 ) — ( 6,320 )

Dividends (1)

10 unchanged sentences

OPERATING ACTIVITIES

Net income (loss)

Net (loss) income

$ ( 6,166 ) $ 20,801 $ ( 3,007 )

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

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

Depreciation and amortization 19,536 22,520 24,664

7 unchanged sentences

Stock compensation expense 3,846 5,217 5,951

Undistributed (earnings) from equity investment, net of taxes

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

9,467 ( 807 ) ( 1,258 )

SKU Rationalization — — 8,500

Wallace facility remediation expense 5,140 500 —

Changes in operating assets and liabilities

10 unchanged sentences

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

Acquisition ( 178 ) — —

Acquisitions ( 17,956 ) ( 178 ) —

NET CASH USED IN INVESTING ACTIVITIES

4 unchanged sentences

Repayments of Term Loan ( 6,216 ) ( 10,478 ) ( 7,583 )

Cash dividends paid ( 3,843 ) ( 3,651 ) ( 3,571 )

Payment of financing costs ( 1,021 ) — —

Payments for finance lease obligations ( 32 ) ( 117 ) ( 152 )

Proceeds from the exercise of stock options 877 27 132

Payments of tax withholding for stock based compensation ( 1,067 ) ( 3,189 ) ( 658 )

Proceeds from the exercise of stock options 233 877 27

Payments for stock repurchase ( 6,320 ) — —

Cash dividends paid ( 3,820 ) ( 3,843 ) ( 3,651 )

NET CASH USED IN FINANCING ACTIVITIES

28 unchanged sentences

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

In particular, a number of estimates have been and will continue to be affected by the ongoing COVID-19 pandemic.

The severity, magnitude and duration, as well as the economic consequences of the COVID-19 pandemic, are uncertain, rapidly changing and difficult to predict.

Foreign currency

8 unchanged sentences

Realized and unrealized gains and losses from non-designated foreign currency hedges are recognized in selling, general and administrative expenses in the consolidated statements of operations.

Foreign currency gains and losses included within selling, general and administrative expenses were a $ 1.3 million loss in 2021, a $ 0.5 million gain in 2020, and a $ 0.1 million gain in 2019.

Foreign currency gains and losses included within selling, general and administrative expenses were a $ 1.5 million loss in 2022, a $ 1.3 million loss in 2021, and a $ 0.5 million gain in 2020.

LIFETIME BRANDS, INC.

10 unchanged sentences

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

In 2019, the Company implemented programs to improve the productivity of its inventory and simplify its U.S.

In connection therewith, it initiated a stock keeping unit rationalization (“SKU Rationalization”) initiative to identify inventory to discontinue from active status, consistent with the objectives of these programs.

During the year ended December 31, 2019, the Company recorded an $ 8.5 million charge to cost of sales associated with the SKU Rationalization initiative.

The inventory charge, which was recognized in cost of sales during the three months ended June 30, 2019, represented approximately 8 % of the Company's consolidated inventory at June 30, 2019.

Distribution expenses

19 unchanged sentences

Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Property and equipment

4 unchanged sentences

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

Equipment under finance leases are amortized over the shorter of the lease term or the assets' useful lives.

Equipment under finance

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

leases are amortized over the shorter of the lease term or the assets' useful lives.

Advances paid towards the acquisition of property and equipment and the cost of property and equipment not ready for use before the end of the period are classified as construction in progress.

21 unchanged sentences

Changes in the fair value of derivatives that qualify as hedges and have been designated as part of a hedging relationship for accounting purposes have no net impact on earnings until the hedged item is recognized in earnings.

The change in the fair value of hedges are included in accumulated other comprehensive income (loss) and is subsequently recognized in the Company’s consolidated statements of operations to mirror the location of the hedged items impacting earnings.

The change in the fair value of hedges is included in accumulated other comprehensive loss and is subsequently recognized in the Company’s consolidated statements of operations to mirror the location of the hedged items impacting earnings.

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Goodwill, intangible assets and long-lived assets

1 unchanged sentence

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.

If, after assessing qualitative factors, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative test is unnecessary and the Company’s goodwill is considered to be unimpaired.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

19 unchanged sentences

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

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

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

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

2 unchanged sentences

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

Compensation expense for performance awards is recognized over the

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

vesting period and will vary based on remeasurement during the performance period.

Compensation expense for performance awards is recognized over the vesting period and will vary based on remeasurement during the performance period.

If achievement of the performance metrics is not probable of achievement during the performance period, compensation expense is reversed.

4 unchanged sentences

Compensation expense is recognized on a straight-line basis over the vesting period.

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

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

Compensation expense for cash-settled performance-based awards is recognized over the vesting period and will vary based on remeasurement during the performance period.

If achievement of the performance metrics is not probable of achievement during the performance period, compensation expense is reversed.

The awards are forfeited if the performance metrics are not achieved as of the end of the performance period.

The cash - settled performance-based awards are liability-classified awards and are recorded within accrued expenses and other long-term liabilities in the Company's consolidated balance sheet.

These awards are remeasured to fair value at the end of each reporting period until settlement.

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

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

9 unchanged sentences

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

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

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

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

7 unchanged sentences

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

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

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

The Company expects annual savings of $ 2.3 million associated with the reorganization.

In 2022, the Company’s U.S.

segment accrued $ 0.4 million related to severance associated with the reorganization of the U.S.

segment’s sales management structure.

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

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

The transition agreement amends Mr.

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

The employment agreement provides for a one-time payment which will be paid upon the expiration of the transition agreement.

The Company estimates the one-time payment to be approximately $ 1.4 million, of which $ 0.6 million was accrued as a restructuring expense in 2022.

The remaining $ 0.8 million is expected to be recorded over the remaining employment period.

The Company expects annual savings of $ 1.3 million due to these actions.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

During the year ended December 31, 2020, the Company's International segment incurred $ 0.2 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 was the result of the Company's efforts for product development efficiencies and an international sales approach tailored to countries.

During the year ended December 31, 2019, the Company's U.S.

segment incurred $ 0.7 million of restructuring expense related to the integration of Filament.

During the year ended December 31, 2019, the Company's International segment incurred $ 0.7 million of restructuring expense primarily related to the integration of its legal entities operating in Europe.

Commitments and Contingencies

1 unchanged sentence

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Adopted accounting pronouncements

Effective January 1, 2021, the Company adopted ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles and simplifies the application of U.S.

GAAP for other areas of Topic 740 by clarifying and amending the existing guidance.

Effective January 1, 2022, the Company adopted ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.

The adoption did not have a material impact on the Company’s consolidated financial statements.

In connection with the Amendment No.1 of the Term Loan, effective December 29, 2022, the Company adopted ASU 2020-04 and 2022-06, 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 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 may be applied to contract modifications and hedging relationships as of any date from March 12, 2020 but no later than December 31, 2024 and should be applied on a prospective basis.

The Company applied available practical expedients under Topic 848 to account for modifications, changes in critical terms, and updates to the designated hedged risks as qualifying changes have been made to applicable debt modifications as if they were not substantial.

Application of these practical expedients allowed us to maintain hedge accounting for our interest rate swap contracts.

The adoption did not have a material impact on the Company's consolidated financial statements.

New accounting pronouncements

6 unchanged sentences

Early adoption is permitted.

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

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

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.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

The new guidance is effective for public business entities for fiscal years beginning after December 15, 2022 on a prospective basis, with early adoption permitted.

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

Management expects the adoption of ASU 2016-13 will not have a material impact on the Company's consolidated financial statements.

NOTE 2 — REVENUE

6 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

3 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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

As a result of the COVID-19 pandemic, beginning in the first quarter of 2020 and lasting through the fourth quarter of 2020, many of the Company's customers that operate retail locations temporarily closed their stores voluntarily or as mandated by government stay at home orders.

In response to these closings, the affected customers had requested temporary extended payment terms.

The Company incurs certain direct incremental costs to obtain contracts with customers, such as sales-related commissions, where the recognition period for the related revenue is less than one year.

19 unchanged sentences

NOTE 3 — ACQUISITION

On March 2, 2022, the Company acquired certain assets of Can't Live Without It, LLC.

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

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.

The purchase price was comprised of the following (in thousands):

Cash paid $ 17,956

Value of contingent consideration 650

Total purchase price $ 18,606

The value of contingent consideration represents the present value of estimated contingent payments of $ 0.7 million, related to the attainment of certain net sales contribution targets for the year 2024.

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

Purchase Price Allocation

Accounts receivable $ 2,280

Inventory 4,005

Fixed assets 40

Intangible assets 13,000

Goodwill 2,966

Accounts payable and accrued expenses ( 3,685 )

Total allocated value $ 18,606

The acquisition is being accounted for as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combinations (“ASC Topic 805”), which established a new basis of accounting for all identifiable assets acquired and liabilities assumed at fair value.

The goodwill and intangible assets are included in the U.S.

The trade name intangible asset is amortized on a straight-line basis over its estimated useful life of 12 years (see NOTE 7 — GOODWILL AND INTANGIBLE ASSETS).

The goodwill recognized results from such factors as assembled workforce and the value of other synergies expected from combining operations with the Company.

The associated goodwill is deductible for tax purposes over 15 years.

The consolidated statement of operations includes $ 16.9 million of net sales attributable to the S'well brand for the twelve months ended December 31, 2022.

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.

5 unchanged sentences

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

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

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

4 unchanged sentences

The Company’s lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

ROU assets also include any advance

ROU assets also include any advance lease payments.

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

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2022

lease payments.

The components of lease costs for the year ended December 31, 2022, 2021 and 2020 were as follows (in thousands):

17 unchanged sentences

Total $ 2,540 $ 1,299 $ —

Included in machinery, furniture and equipment at each of December 31, 2021 and 2020 is $ 0.3 million and $ 0.4 million, respectively, related to assets recorded under finance leases.

Included in machinery, furniture and equipment as of December 31, 2022 and 2021 is $ 0.3 million, related to assets recorded under finance leases.

Included in accumulated depreciation and amortization at December 31, 2022 and December 31, 2021 is $ 0.2 million related to assets recorded under finance leases.

On January 20, 2023, the Company entered into the third amendment to the existing Medford operating lease.

The amendment modified certain terms and conditions of the existing lease agreement, including, but not limited to, reduction in leased square footage, reduction in rent payment, and an extension of the lease term of 7 lease years.

During the period ended December 31, 2020, in response to the COVID-19 pandemic, the Company negotiated COVID-19-related rent concessions for several of its leased properties.

31 unchanged sentences

At December 31, 2022 and 2021, $ 20.2 million and $ 28.8 million, respectively, of receivables sold are outstanding and are due to HSBC Bank USA from customers.

A charge of $ 0.4 million related to the sale of the Receivables is included in selling, general and administrative expenses in the consolidated statements of operations for both the years ended December 31, 2021 and 2020.

A charge of $ 0.8 million and $ 0.4 million, respectively, related to the sale of the Receivables is included in selling, general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2022 and 2021.

NOTE 6 — EQUITY INVESTMENTS

4 unchanged sentences

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 years ended December 31, 2022, 2021 and 2020 in the accompanying consolidated statements of operations.

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

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 investment balance.

17 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 of the investment of $ 1.0 million during the year ended December 31, 2021 and a decrease of the investment of $ 2.7 million during the year ended December 31, 2020.

The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in a decrease of the investment of $ 0.3 million during the year ended December 31, 2022 and an increase of the investment of $ 1.0 million during the year ended December 31, 2021.

These translation effects are recorded in accumulated other comprehensive loss.

The Company received cash dividends of $ 0.2 million, $ 0.1 million and $ 0.1 million, from Vasconia during the years ended December 31, 2021, 2020 and 2019, respectively.

The Company received cash dividends of $ 0.2 million and $ 0.1 million, from Vasconia during the years ended December 31, 2021 and 2020, respectively.

There was no cash dividend received during the year ended December 31, 2022.

The amounts due to and due from Vasconia as of December 31, 2022 and 2021 are as follows (in thousands):

11 unchanged sentences

Gross profit 39,874 802,496 52,574 1,064,557 24,947 540,244

Income (loss) from operations

Loss (income) from operations

( 1,596 ) ( 30,323 ) 15,536 313,156 ( 102 ) 6,674

7 unchanged sentences

Non-current liabilities 95,065 1,850,568 57,753 1,181,398

The Company recorded equity in earnings of Vasconia, net of taxes, of $ 1.8 million, $ 1.5 million and $ 0.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2022

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

The carrying value of the Company’s investment in Vasconia was $ 22.3 million.

The Company recorded equity in (losses) earnings of Vasconia, net of taxes, of $( 3.3 ) million, $ 1.8 million and $ 1.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

The fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia declined during the third quarter of 2022.

As a result of the decline in the quoted stock price and the quarterly decline in the operating results of Vasconia, the Company determined the decline in fair value was other than temporary.

The Company reduced its investment by $ 6.2 million as of September 30, 2022 to its fair value, and recognized the non-cash impairment charge within Equity in (losses) earnings, net of taxes, in the consolidated statement of operations.

As of December 31, 2022, the fair value of the Company's investment in Vasconia was $ 15.0 million.

The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $ 12.5 million.

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

6 unchanged sentences

Year Ended December 31,

Gross Impairment Accumulated

Gross Accumulated

Amortization Net Gross Impairment Accumulated

Amortization Net

Goodwill $ 30,271 $ — $ — $ 30,271 $ 49,371 $ ( 19,100 ) $ — $ 30,271

$ 33,237 $ — $ 33,237 $ 30,271 $ — $ — $ 30,271

Indefinite -lived intangible assets:

6 unchanged sentences

Customer relationships (2)

Other 6,566 ( 448 ) ( 3,057 ) 3,061 6,582 — ( 2,482 ) 4,100

143,157 ( 53,586 ) 89,571 177,245 ( 11,766 ) ( 65,863 ) 99,616

5,856 ( 3,325 ) 2,531 6,566 ( 448 ) ( 3,057 ) 3,061

Total $ 302,482 $ ( 88,595 ) $ 213,887 $ 331,385 $ ( 14,760 ) $ ( 103,947 ) $ 212,678

(1) During 2020, as part of the Company’s annual impairment analysis of indefinite-lived trade names it was determined that certain of the Company’s trade names, previously estimated to contribute to cash flows indefinitely, have definite lives.

Accordingly, these trade names were reclassified from indefinite-lived to finite-lived or amortizable intangible assets as of October 1, 2020.

These trade names are being amortized over an estimated useful life of 18 years.

(1) The gross and net value at December 31, 2022 and 2021 reflect a reduction of $ 91.7 million impairment charges on goodwill and $ 1.0 million charges on indefinite-lived intangible assets.

(2) The gross value and accumulated amortization at December 31, 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 and a $ 6.5 million reduction in gross value for previous impairment charges on finite-lived intangible assets within the U.S.

LIFETIME BRANDS, INC.

4 unchanged sentences

Goodwill and Intangible Assets, December 31, 2019 $ 231,100 $ 49,371 $ 280,471

Purchase price adjustment — 972 972

Foreign currency translation adjustment 607 — 607

Amortization ( 16,953 ) — ( 16,953 )

Impairment of indefinite - lived intangible assets ( 1,000 ) — ( 1,000 )

Impairment of goodwill — ( 19,100 ) ( 19,100 )

2 unchanged sentences

Amortization ( 16,223 ) — ( 16,223 )

Impairment of indefinite -lived intangible assets ( 1,000 ) — ( 1,000 )

Impairment of goodwill — ( 19,100 ) ( 19,100 )

Impairment of finite - lived intangible assets ( 14,760 ) — ( 14,760 )

Goodwill and Intangible Assets, December 31, 2021 182,407 30,271 212,678

Acquisition of goodwill — 2,966 2,966

Acquisition of trade name 13,000 — 13,000

Foreign currency translation adjustment ( 227 ) — ( 227 )

Amortization ( 14,530 ) — ( 14,530 )

Impairment of finite -lived intangible assets ( 14,760 ) — ( 14,760 )

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

23 unchanged sentences

The carrying value of the goodwill for the International reporting unit was zero as of December 31, 2022 and 2021.

During 2019 several impairment indicators for the European kitchenware business were considered by the Company including the continued uncertainties of the macro-environment in Europe as a result of the then-ongoing Brexit negotiations.

In addition, the Company considered the decline in operating performance for the European kitchenware business, which included slower fulfillment of orders and labor inefficiencies associated with setting up the new warehouse in the U.K.

These factors resulted in a decline in the long-term forecast for the European kitchenware business.

In the third quarter of 2019, the Company performed an interim assessment of its European kitchenware business by comparing the fair value of the reporting unit with its carrying value as of September 30, 2019.

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

Based upon the analysis performed, the Company recognized a $ 9.7 million non-cash goodwill impairment charge during the third quarter of 2019.

The goodwill impairment charge was the result of a decline in operating performance and reduced expectations for future cash flows of the European kitchenware business.

The fair value of the business was approximately 30.1 % below its carrying value as of September 30, 2019.

During the third quarter of 2019 the Company also determined its European kitchenware and tableware reporting units had met the criteria to be combined into one reporting unit based on the guidance of ASC Topic No.

350, Intangibles - Goodwill and Other and ASC Topic No.

280, Segment Reporting.

Reporting Unit

3 unchanged sentences

As of October 1, 2022, the fair value of the U.S.

reporting unit exceeded the carrying value of goodwill.

reporting unit exceeded the carrying value of goodwill by 10 %.

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

1 unchanged sentence

As of December 31, 2022, the Company assessed the carrying value of goodwill and determined, based on qualitative factors, that no impairment indicators existed for goodwill.

During the first quarter of 2020, as a result of the economic downturn caused by the COVID-19 pandemic, the Company performed an interim assessment of the goodwill for the U.S.

In the first quarter of 2020, as a result of the economic downturn caused by the COVID-19 pandemic, the Company performed an interim assessment of the goodwill for the U.S.

reporting unit as of March 31, 2020, by comparing the fair value of the reporting unit with its carrying value.

4 unchanged sentences

reporting unit was approximately 3.9 % below its carrying value as of March 31, 2020.

In 2019, the Company recognized a non-cash goodwill impairment charge of $ 33.2 million, during the three months ended December 31, 2019.

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

The goodwill impairment charge resulted from, among other factors, a sustained decline in the Company's market capitalization observed in the fourth quarter of 2019.

The fair value of the U.S, reporting unit was approximately 6.1 % below its carrying value at October 1, 2019.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Annual indefinite-lived trade name impairment test

1 unchanged sentence

The Company bypassed the optional qualitative impairment analysis for its indefinite-lived trade name assets annual October 1, 2022 impairment test.

As of October 1, 2021, the Company completed the quantitative impairment analysis by comparing the fair value of the indefinite-lived trade names to their respective carrying value.

The Company determined that the fair value of all its indefinite-lived trade names were above their respective carrying values.

The Company completed the quantitative impairment analysis by comparing the fair value of the indefinite-lived trade names to their respective carrying value using a relief from royalty method.

As of October 1, 2022, the fair value of the Company’s indefinite-lived trade names exceeded their respective carrying values by 12%.

While the indefinite-lived trade names were not determined to be impaired, the indefinite-lived trade names are at risk of future impairment in the event the trade names do not perform as projected or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in long-term growth rates or the weighted average cost of capital.

As of December 31, 2022, the Company assessed the carrying value of its indefinite-lived trade names and determined based on qualitative factors that no impairment existed.

During the first quarter of 2020, as a result of the economic decline caused by the COVID-19 pandemic, the Company determined its indefinite-lived trade names had indicators for impairment.

In the first quarter of 2020, as a result of the economic decline caused by the COVID-19 pandemic, the Company determined its indefinite-lived trade names had indicators for impairment.

As a result, the Company bypassed the optional qualitative impairment analysis for its indefinite-lived trade names and performed an interim quantitative impairment analysis as of March 31, 2020, by comparing the fair value of the indefinite-lived trade names to their respective carrying values.

As a result of the impairment testing performed in connection with the COVID-19 pandemic triggering event, the Company determined that certain of its indefinite-lived intangible assets in the U.S.

As a result of the impairment testing

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

performed in connection with the COVID-19 pandemic triggering event, the Company determined that certain of its indefinite-lived intangible assets in the U.S.

segment were impaired.

1 unchanged sentence

Long-lived assets impairment test

During the fourth quarter of 2021, due to lower than expected operating results for the International segment caused by continuing impacts of COVID-19 and the exit of the U.K.

Due to the current operating results for the International segment as a result of low consumer confidence in the region, impairment indicators were identified for the International asset group.

The Company tested the recoverability of the asset group, concluding it was not recoverable and performed an analysis of the fair value of the international long-lived assets.

The Company tested the International segment's long-lived assets for impairment and concluded that the fair value exceeded the carrying value of the long-lived assets, concluding no impairment as of December 31, 2022.

In the fourth quarter of 2021, due to lower than expected operating results for the International segment caused by continuing impacts of COVID-19 and the exit of the U.K.

from the European Union, impairment indicators were identified for the International asset group.

2 unchanged sentences

NOTE 8 — DEBT

The Company’s credit agreement (the “ABL Agreement”) with JPMorgan Chase Bank, N.A.

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

The Term Loan facility will be repaid in quarterly payments, which commenced June 30, 2018, of principal equal to 0.25 % of the original aggregate principal amount of the Term Loan facility.

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

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

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

The 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 Incremental Facilities may be added under the Term Loan if certain 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.

On August 26, 2022, the Company entered into Amendment No.

2 (the “Amendment”) to the ABL Agreement among the Company, as a Borrower, certain subsidiaries of the Company, as Borrowers and/or Loan Parties, JPMorgan Chase Bank, N.A., as Administrative Agent and a Lender, HSBC Bank USA, National Association and Wells Fargo Bank, National Association, as Co-Documentation Agents and Lenders, and Manufacturers and Traders Trust Company.

The ABL Agreement provides for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $ 200.0 million, which facility will mature on August 26, 2027 (subject to an earlier springing maturity date that is 90 days prior to the Term Loan maturity date of February 28, 2025 if the Company’s Term Loan has not been repaid or refinanced by such date).

The Term Loan provides for a senior secured term loan credit facility in the original principal amount of $ 275.0 million, which matures on February 28, 2025.

On December 29, 2022, the Company entered into Amendment No.

1 to the Term Loan, which replaces the LIBOR-based interest rates with SOFR-based interest rates and modifies the provisions for determining the alternative rate of interest upon the occurrence of certain events relating to the availability of interest rate benchmarks.

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 the Debt Agreements).

When an Excess Cash Flow payment is required, each lender has the option to decline a portion or all of the prepayment amount payable to it.

An estimate of the amount of the Excess Cash Flow payment is recorded in current maturity of term loan on the consolidated balance sheets.

Additionally, the Term Loan requires quarterly payments, which commenced on June 30, 2018, of principal equal to 0.25 %, of the original aggregate principal amount of the Term Loan facility, which payments are to be adjusted from time to time to account for prepayments made.

Per the Term Loan, when the Company makes an Excess Cash Flow payment, the payment is first applied to satisfy the next eight scheduled future quarterly required payments of the Term Loan in order of maturity and then to the remaining scheduled installments on a pro rata basis.

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

The maximum borrowing amount under the ABL Agreement may be increased to up to $ 250.0 million if certain conditions are met but limited to $ 220.0 million pursuant to the Term Loan.

One or more tranches of additional term loans (the “Incremental Term Facilities”) may be added under the Term Loan if certain 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 on a pro forma basis pursuant to the Term Loan, after giving effect to such increase, is no greater than 3.75 to 1.00, subject to certain limitations and for the period defined pursuant to the Term Loan but not to mature earlier than the maturity date of the then existing term loans.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

5 unchanged sentences

Total availability under the ABL Agreement $ 176,222 $ 146,341

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Availability under the ABL Agreement depends on the valuation of certain current assets comprising the borrowing base.

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.

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

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 mean that the Company may have greater borrowing availability during the third and fourth quarters of each year.

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

9 unchanged sentences

Total Non-current portion of Term Loan facility $ 242,857 $ 241,873

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

As of December 31, 2022, there is no Excess Cash Flow Payment due for 2023.

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

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

The Excess Cash Flow payment differs from the estimated amount at December 31, 2021 of $ 7.2 million as certain lenders opted to decline their payments per the terms of the Term Loan.

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

1 unchanged sentence

Certain payment obligations under the ABL Agreement are also direct obligations of its foreign subsidiary borrowers designated as such under the ABL Agreement and, subject to limitations on such guaranty, are guaranteed by the foreign subsidiary borrowers, as well as by the Company.

The obligations of the Company under the Debt Agreements and any hedging arrangements and cash management services and the guarantees by its domestic subsidiaries in respect of those obligations are secured by substantially all of the assets and stock (but in the case of foreign subsidiaries, limited to 65 % of the capital stock in first-tier foreign subsidiaries and not including the stock of subsidiaries of such first-tier foreign subsidiaries) owned by the Company and the U.S.

The obligations of the foreign subsidiary borrowers under the ABL Agreement are secured by security interests in substantially all of the assets of, and stock in, such foreign subsidiary borrowers, subject to certain limitations.

The obligations of the Company under the Debt Agreements and any hedging arrangements and cash management services and the guarantees by its domestic subsidiaries in respect of those obligations are secured by security interests in substantially all of the assets and stock (but in the case of foreign subsidiaries, limited to 65 % of the capital stock in first-tier foreign subsidiaries and not including the stock of subsidiaries of such first-tier foreign subsidiaries) owned by the Company and the U.S.

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

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

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

(i) an 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 (or Euro Interbank Offered Rate “EURIBOR” for borrowings denominated in Euro;

or Sterling Overnight Index Average “SONIA” for borrowings denominated in Pounds Sterling), 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 Agreement.

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

In addition, the Company paid a commitment fee of 0.375 % on the unused portion of the ABL Agreement during the year ended December 31, 2021.

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

(i) an alternate base rate, defined, for any day, as the greater of the prime rate, a federal funds and overnight bank funding based rate plus 0.50 % or one-month LIBOR plus 1.0 %, plus a margin of 2.50 % or (ii) LIBOR plus a margin of 3.50 %.

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

The debt agreements provide for customary restrictions and events of default.

Restrictions include limitations on additional indebtedness, acquisitions, investments and payment of dividends, among other things.

Further, the ABL Agreement provides that

(i) an 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 Adjusted Term SOFR plus 1.0 % as of a specified date in advance of the determination, but in each case not less than 1.0 %, plus a margin of 0.25 % to 0.5 %, or (ii) Adjusted Term SOFR, which is the Term SOFR Rate for the selected 1, 3 or 6 month interest period plus 0.10 % (or Euro Interbank Offered Rate “EURIBOR” for borrowings denominated in Euro;

or Sterling Overnight Index Average “SONIA” for borrowings denominated in Pounds Sterling), but in each case not less than zero, plus a margin of 1.25 % to 1.5 %.

The respective margins are based upon average quarterly availability, as defined in and computed pursuant to the ABL

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2022

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 or 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 or 10 % of the aggregate commitment under the ABL Agreement for forty-five (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.

In addition, the Company pays a commitment fee of 0.20 % to 0.25 % per annum based on the average daily unused portion of the aggregate commitment under the ABL Agreement.

The interest rate on outstanding borrowings under the ABL Agreement at December 31, 2022 was 3.43 %.

In addition, the Company paid a commitment fee of 0.25 % to 0.375 % on the unused portion of the ABL Agreement during the year ended December 31, 2022.

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

(i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.50 % or (z) one-month Adjusted Term SOFR, but not less than 1.0 %, plus 1.0 %, plus a margin of 2.5 % or (ii) SOFR for the applicable interest period, multiplied by any statutory reserve rate, but not less than 1.0 %, plus a margin of 3.5 %.

The interest rate on outstanding borrowings under the Term Loan at December 31, 2022 was 7.9 %.

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

Restrictions include limitations on additional indebtedness, liens, acquisitions, investments and payment of dividends, among other things.

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 $ 20.0 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 $ 20.0 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 December 31, 2022.

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

Prior to the amendment of the credit agreement, the Company’s ABL provided for an aggregate principal amount of $ 150.0 million.

Upon entering into the Amendment to the ABL Agreement the Company repaid its outstanding ABL borrowing in the amount of $ 32.0 million and re-borrowed such amounts under the ABL Agreement, as amended.

Unamortized debt issuance costs that were written off were immaterial.

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.

Other Credit Agreements

A subsidiary of the Company holds a credit facility (“HSBC Facility”) with HSBC Bank (China) Company Limited, Shanghai Branch (“HSBC”) for up to $ 10.0 million Chinese renminbi ($ 1.5 million).

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

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

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

12 unchanged sentences

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

Where the Company deems it prudent, the

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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 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 December 31, 2021 was $ 22.6 million.

The Company had no outstanding foreign exchange contracts at December 31, 2020.

The aggregate gross notional values of foreign exchange contracts at December 31, 2022 and 2021 was $ 6.3 million and $ 22.6 million, respectively.

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

5 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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

Derivatives designated as hedging instruments Balance Sheet Location 2022 2021

Interest rate swaps Prepaid expenses and other current assets $ 122 $ —

Interest rate swaps Accrued expenses — 288

1 unchanged sentence

Foreign exchange contracts Prepaid expenses and other current assets — 461

Accrued expenses 260 —

Derivatives not designated as hedging instruments Balance Sheet Location 2022 2021

Interest rate swaps Other assets $ 1,292 $ —

Interest rate swaps Other long-term liabilities — 680

4 unchanged sentences

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

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

Year ended December 31,

3 unchanged sentences

Total $ 845 $ 1,203 $ ( 2,289 )

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

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 year ended December 31, 2022.

Realized gains or (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.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 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 year ended December 31, 2022, the Company reclassified $ 1.3 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This comprised of a charge of $ 0.9 million related to interest rate swaps recognized in interest expense and a loss of $ 0.6 million related to foreign exchange contracts recognized in cost of sales.

At December 31, 2021, the estimated amount of existing losses expected to be reclassified into earnings within the next 12 months was $ 0.5 million.

This comprised of a charge of $ 0.3 million related to interest rate swaps recognized in interest expense and a gain of $ 1.6 million related to foreign exchange contracts recognized in cost of sales.

At December 31, 2022, the estimated amount of existing net gains expected to be reclassified into earnings within the next 12 months was $ 0.8 million.

During the year ended December 31, 2021, the Company reclassified $ 1.5 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This comprised of $ 1.2 million related to interest rate swaps recognized in interest expense and a gain of $ 0.2 million related to foreign exchange contracts recognized in cost of sales.

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

11 unchanged sentences

Dividend per share Date declared Date of record Payment date

$ 0.0425 March 10, 2020 November 16, 2020 December 16, 2020

$ 0.0425 March 9, 2021 May 3, 2021 May 17, 2021

$ 0.0425 June 24, 2021 August 2, 2021 August 16, 2021

4 unchanged sentences

$ 0.0425 August 2, 2022 November 1, 2022 November 15, 2022

$ 0.0425 November 2, 2021 January 31, 2022 February 14, 2022

$ 0.0425 November 1, 2022 February 1, 2023 February 15, 2023

On March 8, 2023, the Board of Directors declared a quarterly dividend of $ 0.0425 per share payable on May 15, 2023 to shareholders of record on May 1, 2023.

Stock repurchase program

On April 30, 2013, Lifetime’s Board of Directors authorized the repurchase of up to $ 10.0 million of the Company’s common stock.

On March 14, 2022, the Company announced that its Board of Directors of the Company authorized the repurchase of up to $ 20.0 million of the Company's common stock, replacing the Company's previously-authorized $ 10.0 million share repurchase program.

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

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

No shares were repurchased during the years ended December 31, 2021 and 2020.

8 unchanged sentences

Performance-based awards that have been granted under the Plan vest after 3 years based upon the attainment of specified performance goals.

On June 23, 2022, the shareholders 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 December 31, 2022, there were 1,133,958 shares available for the grant of awards under the Plan.

16 unchanged sentences

Exercises (1)

Cancellations ( 14,313 ) 11.09

( 236,325 ) 11.71

Expirations ( 4,000 ) 19.10

2 unchanged sentences

Exercises ( 60,000 ) 11.64

( 236,325 ) 11.71

Cancellations ( 11,375 ) 11.16

Expirations ( 13,450 ) 13.99

5 unchanged sentences

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

The total intrinsic values of those stock options that were exercised in the year ended December 31, 2020 was less than $ 0.1 million and in the year ended December 31, 2019 was $ 0.3 million.

The total intrinsic values of those stock options that were exercised in the year ended December 31, 2021 was $ 0.8 million and in the year ended December 31, 2020 was less than $ 0.1 million.

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

5 unchanged sentences

The weighted-average per share grant date fair value of stock options granted during the years ended December 31, 2022, 2021 and 2020, was $ 5.44 , $ 6.31 and $ 2.26 , respectively.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

The fair values for these stock options were estimated at the dates of grant using the following weighted-average assumptions:

4 unchanged sentences

Expected dividend yield 1.48 % 1.20 % 2.67 %

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Restricted Stock

35 unchanged sentences

Non-vested performance-based awards, December 31, 2021 436,330 10.54

Grants 176,915 14.18

123,000 12.19

Achieved performance over target (3)

Vested ( 166,935 ) 9.20

4 unchanged sentences

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

(2) The performance metric for the performance-based awards granted in 2022 is not probable of achievement.

No compensation expense was recorded in 2022.

(3) Represents the number of shares earned over target for performance-based awards granted in 2019 based on performance goals attained.

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

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

On March 8, 2023, the Compensation Committee of the Board of Directors determined the performance goals set forth in the performance-based awards granted in 2020 were attained and 119,739 shares vested.

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

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

Cash-settled performance-based awards (1)

Non-vested cash-settled performance-based awards, January 1, 2022

Cancellations ( 2,049 ) 10.61

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

85,776 $ 7.59

Total unrecognized compensation expense remaining (in thousands) $ —

Weighted-average years expected to be recognized over 0.0

(1) Represents the target number of units to be settled in cash.

(2) The performance metric for the cash-settled performance-based awards granted in 2022 is not probable of achievement.

No compensation expense was recorded in 2022.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

9 unchanged sentences

December 31, 2022

NOTE 11 — INCOME (LOSS) PER COMMON SHARE

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

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

NOTE 11 — (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.

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 (loss) per common share for the years ended December 31, 2021, 2020 and 2019, are as follows:

The calculations of basic and diluted (loss) income per common share for the years ended December 31, 2022, 2021 and 2020, are as follows:

2022 2021 2020

(in thousands - except per share amounts)

Net income (loss) – Basic and Diluted

Net (loss) income – Basic and Diluted

$ ( 6,166 ) $ 20,801 $ ( 3,007 )

3 unchanged sentences

Weighted-average shares outstanding – Diluted 21,558 22,037 20,860

Basic income (loss) per common share

Basic (loss) income per common share

$ ( 0.29 ) $ 0.97 $ ( 0.14 )

Diluted income (loss) per common share

Diluted (loss) income per common share

$ ( 0.29 ) $ 0.94 $ ( 0.14 )

3 unchanged sentences

NOTE 12 — INCOME TAXES

The components of income (loss) before income taxes and equity in earnings are as follows:

The components of income before income taxes and equity in (losses) earnings are as follows:

Year Ended December 31,

3 unchanged sentences

Foreign ( 11,767 ) ( 24,665 ) ( 12,463 )

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

Total income before income taxes and equity in earnings

$ 9,029 $ 36,380 $ 5,549

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

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

Year Ended December 31,

11 unchanged sentences

The CARES Act remedied certain aspects of the Tax Act such as accelerated depreciation recovery for assets defined as qualified improvement property and carryback of operating losses to fiscal tax years.

The latter required carryback of Filament losses to pre-

The latter required carryback of Filament losses to pre-acquisition fiscal years ended March 31, 2017 and March 31, 2016, which resulted in a tax expense that exceeded the benefit received

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2022

acquisition fiscal years ended March 31, 2017 and March 31, 2016, which resulted in a tax expense that exceeded the benefit received from the various CARES Act provisions claimed by the Company.

from the various CARES Act provisions claimed by the Company.

The Company received a tax refund of $ 2.3 million in the third quarter of 2020.

Under the Tax Cuts and Jobs Act of 2017, research and development costs are no longer fully deductible and are required to be capitalized and amortized for U.S.

tax purposes effective January 1, 2022.

The mandatory capitalization requirement increases our deferred tax assets and income tax payable.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

9 unchanged sentences

Deferred compensation 721 1,167

Environmental remediation accrual 1,432 127

Capitalized research and experimental expenditures 2,525 —

Other 755 1,409

5 unchanged sentences

Total deferred income tax liabilities ( 46,837 ) ( 49,758 )

Net deferred income tax asset (liability)

2,230 ( 3,811 )

Net deferred income tax asset

Valuation allowance ( 16,323 ) ( 15,072 )

4 unchanged sentences

The Company has net operating losses in foreign jurisdictions of $ 61.3 million and $ 12.1 million in state jurisdictions at December 31, 2022 that are offset entirely by a valuation allowance.

The foreign net operating losses can be carried forward indefinitely.

The state net operating losses begin to expire in 2026.

2 unchanged sentences

December 31, 2022

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

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

Year Ended December 31,

4 unchanged sentences

Foreign rate differences 6.9 ( 9.2 ) ( 49.8 )

Foreign withholding tax 6.1 1.2 5.9

Impairment of goodwill — — 65.5

— 65.5 ( 20.8 )

Non-deductible expenses 7.1 3.3 16.4

5 unchanged sentences

Valuation Allowance 15.9 22.4 48.3

Other — — ( 0.3 )

Provision for income taxes 63.4 % 45.5 % 177.8 %

(1) In 2019, the rate for the impairment of goodwill was ( 20.8 )% due to a pretax loss position.

The estimated values of the Company’s gross uncertain tax positions at December 31, 2021, 2020 and 2019 are liabilities of $ 1.1 million, $ 1.6 million and $ 1.5 million, respectively, and consist of the following:

The estimated values of the Company’s gross uncertain tax positions at December 31, 2022, 2021 and 2020 consist of the following:

Year Ended December 31,

5 unchanged sentences

Balance at December 31 $ ( 1,130 ) $ ( 1,071 ) $ ( 1,648 )

The Company had approximately $ 0.2 million and $ 0.1 million, net of federal and state tax benefit, accrued at December 31, 2021 and 2020, respectively, for the payment of interest.

The Company had approximately $ 0.4 million, net of federal and state tax benefit, accrued at December 31, 2022 and 2021, for the payment of interest and penalties.

The Company’s policy for recording interest and penalties is to record such items as a component of the provision for income taxes.

1 unchanged sentence

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

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

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

The Company is no longer subject to U.S.

Federal income tax examinations for the years prior to 2017.

Federal income tax examinations for the years prior to 2019, except for examination in tax year 2017 related to Transition Tax.

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

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

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

At December 31, 2022, the periods subject to examination by the Company’s major state jurisdictions, except for New York State, are generally for the years ended 2018 through 2021.

In certain jurisdictions, Filament may have additional periods subject to examination.

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.

The Company's New York State tax returns for years 2015-2019 closed during the first quarter of 2022, with an immaterial adjustment.

As of December 31, 2022, there are no material assessments in any given year.

10 unchanged sentences

Management evaluates the performance of the U.S.

and International segments based on net sales and income (loss) from operations.

and International segments based on net sales and income from operations.

Such measures give recognition to specifically identifiable operating costs such as cost of sales, distribution expenses and selling, general and administrative expenses.

6 unchanged sentences

Total net sales $ 727,662 $ 862,924 $ 769,169

Income (loss) from operations:

Income from operations:

$ 61,479 $ 100,336 $ 60,378

2 unchanged sentences

Unallocated corporate expenses (4)

Total income (loss) from operations

( 25,063 ) ( 24,443 ) ( 22,573 )

Total income from operations

$ 24,263 $ 50,842 $ 24,970

Depreciation and amortization:

6 unchanged sentences

Total capital expenditures $ 2,975 $ 3,986 $ 2,082

(1) In 2019, income from operations for the U.S.

segment include $ 0.7 million of restructuring expenses related to the U.S.

restructuring plan and the Filament integration, respectively, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

(2) In 2020 and 2019, the Company recognized non-cash impairment charges of $ 20.1 million and $ 33.2 million, respectively, related to the U.S.

(1) In 2020, the Company recognized non-cash impairment charges of $ 20.1 million related to the U.S.

segment as described in NOTE 7 — GOODWILL AND INTANGIBLE ASSETS.

(3) In 2020 and 2019, income from operations for the International segment includes $ 0.2 million and $ 0.7 million, respectively, of restructuring expenses, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES

(4) In 2021 and 2019, the Company recognized non-cash impairment charges of $ 14.8 million and $ 9.7 million, respectively, related to the international segment as described in NOTE 7 — GOODWILL AND INTANGIBLE ASSETS

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

segment and $ 0.4 million for the International segment.

In 2020, income from operations for the International segment includes $ 0.2 million of restructuring expenses, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES.

(3) In 2021, the Company recognized non-cash impairment charges of $ 14.8 million related to the international segment as described in NOTE 7 — GOODWILL AND INTANGIBLE ASSETS.

(4) The Company recognized expenses of $ 5.1 million and $ 0.5 million in 2022 and 2021, respectively, for estimated remediation costs related to the Wallace EPA Matter, as described in NOTE 14 — COMMITMENTS AND CONTINGENCIES.

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

(in thousands)

9 unchanged sentences

Beginning balance $ 30,271 $ 30,271

Impairment — ( 19,100 )

Acquisition activity 2,966 —

Total goodwill $ 33,237 $ 30,271

12 unchanged sentences

Year ending December 31,

2022 $ 10,237

Thereafter 2,806

4 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.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

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.

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PRIDCO agreed to such access and the Company consented.

The EPA conducted a further investigation during 2013 and, in April 2015, notified the Company and PRIDCO that the results from vapor intrusion sampling may warrant the implementation of measures to mitigate potential exposure to sub-slab soil gas.

The EPA conducted a further investigation

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

during 2013 and, in April 2015, notified the Company and PRIDCO that the results from vapor intrusion sampling may warrant the implementation of measures to mitigate potential exposure to sub-slab soil gas.

The Company reviewed the information provided by the EPA and requested that PRIDCO, as the property owner, find and implement a solution acceptable to the EPA.

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This selected remedy includes soil vapor extraction (“SVE”) to address soil (vadose zone) source areas at the Site, impermeable cover as necessary for the implementation of SVE, dual phase extraction in the shallow saprolite zone, and in-situ treatment as needed to address residual sources.

The EPA’s total net present worth estimated cost for its selected remedy is $ 7.3 million.

The EPA also designated a second operable unit under which the EPA has and will continue to conduct further investigations to determine the nature and extent of groundwater contamination, as well as a determination by the EPA on the necessity of any further response actions to address groundwater contamination.

In February 2017, the EPA indicated that it planned to expand its field investigation for the RI/FS to a second operable unit to further determine the nature and extent of the groundwater contamination at and from the Site and to determine the nature of the remedial action needed to address the contamination.

The EPA has requested access to the property occupied by WSPR to install monitoring wells and to undertake groundwater sampling as part of this expanded investigation.

The EPA’s total net present worth estimated cost for its selected remedy is $ 7.3 million In February 2017, the EPA indicated that it planned to expand its field investigation for the RI/FS to a second operable unit to further determine the nature and extent of the groundwater contamination at and from the Site and to determine the nature of the remedial action needed to address the contamination.

The EPA requested access to the property occupied by WSPR to install monitoring wells and to undertake groundwater sampling as part of this expanded investigation.

WSPR has consented to the EPA’s access request, provided that the EPA receives PRIDCO’s consent, as the property owner.

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In October 2021, the tolling agreements were extended to November 2022.

In October 2022, the tolling agreements were extended to November 2023.

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.

The EPA released its proposed plan for a second operable unit in July 2019.

The public comment period for the proposed plan ended on September 10, 2019.

On September 30, 2019, the EPA issued the ROD for operable unit 2 (“OU-2”), electing to implement its preferred remedy which consists of in-situ treatment of groundwater and a monitored natural attenuation program including monitoring of the plume fringe at the Site.

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

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.

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 liability, if any, 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.

In August 2021, WSPR received a Notice of Liability from the Department of Justice on behalf of the EPA, and in September 2021, WSPR responded with a good faith offer to conduct additional testing and remedial design work for OU1.

Since that time, WSPR has been actively participating in negotiations among the United States Government (the Department of Justice and the EPA) and other potentially responsible parties with respect to the remedial work at OU1.

WSPR anticipates finalizing a Consent Decree for Remedial Design and Remedial Action at OU1 in the near term.

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

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

In the event of one or more adverse determinations, 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

5 unchanged sentences

Since being notified of the investigation, the Company has obtained a significant amount of evidence that, the Company believes, supports that the imported products were properly classified as specified sets.

The Company's counsel filed a Lead

The Company's counsel filed a Lead Protest and Application for Further Review with CBP on February 5, 2020 (the "Lead Protest") relating to a single shipment made during the investigation period.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2022

Protest and Application for Further Review with CBP on February 5, 2020 (the "Lead Protest") relating to a single shipment made during the investigation period.

CBP approved the Company’s Lead Protest on June 8, 2020 stating that the specified set requirement was fulfilled with respect to the protested shipment based on information provided by the Company.

1 unchanged sentence

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 protest 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.

13 unchanged sentences

The Company maintains a defined contribution retirement plan for eligible employees under Section 401(k) of the Internal Revenue Code.

Participants can make voluntary contributions up to the Internal Revenue Service limit of $19,500 ($26,000 for employees 50 years or over) for 2021.

Participants can make voluntary contributions up to the Internal Revenue Service limit of $20,500 ($27,000 for employees 50 years old or over) for 2022.

The Company suspended its matching contribution in 2009 as an expense savings measure.

34 unchanged sentences

December 31, 2022

Other long-term liabilities

Other l ong-term liabilities consist of:

(in thousands)

Retirement benefit obligations $ 6,918 $ 7,534

Other non-income tax liabilities 2,927 2,824

Unearned revenue 1,159 1,444

Derivative financial instruments 972 2,776

Deferred payroll non-income tax liabilities — 1,261

Royalty obligations — 475

Other long term obligations 140 169

Total $ 12,116 $ 16,483

Accrued expenses

2 unchanged sentences

Customer allowances and rebates $ 31,281 $ 36,290

Other non-income tax liabilities 10,054 7,496

Compensation and benefits 9,789 21,258

Freight 16,110 6,669

Vendor invoices 6,930 16,082

Other non-income tax liabilities 7,496 4,136

Royalties 4,406 3,007

Freight 6,869 16,110

Professional fees 2,743 2,954

Royalties 2,408 4,406

Commissions 656 813

Restructuring 986 —

Wallace facility remediation 500 —

Interest 136 402

1 unchanged sentence

Total $ 77,602 $ 112,741

Other long-term liabilities

Other l ong-term liabilities consist of:

(in thousands)

Retirement benefit obligations $ 5,178 $ 6,918

Wallace facility remediation 5,140 —

Other non-income tax liabilities 3,037 2,927

Unearned revenue 890 1,159

Contingent consideration 650 —

Derivative financial instruments — 972

Other long-term obligations 100 140

Total $ 14,995 $ 12,116

Supplemental disclosure of cash flow information

5 unchanged sentences

Non-cash investing activities:

Translation adjustment $ 690 $ ( 2,062 ) $ ( 292 )

Translation loss recognized on change in Vasconia ownership — 3,404 —

11 unchanged sentences

Amount reclassified from accumulated other comprehensive loss (1)

Translation Adjustment $ ( 4,320 ) $ 4,094 $ ( 1,827 )

Balance at end of year $ ( 36,072 ) $ ( 31,752 ) $ ( 35,846 )

1 unchanged sentence

Balance at beginning of year $ 78 $ ( 1,125 ) $ 1,164

Derivative fair value adjustment, net of tax ( 311 ) ( 3,273 ) 1,212

Change in unrealized gains (losses) 2,126 ( 311 ) ( 3,273 )

Amounts reclassified from accumulated other comprehensive loss:

Settlement of cash flow hedges ( 1,281 ) 1,514 984

Net change in cash flow hedges, net of taxes of $( 190 ), $( 246 ) and $ 803

$ 845 $ 1,203 $ ( 2,289 )

Balance at end of year $ 923 $ 78 $ ( 1,125 )

1 unchanged sentence

Balance at beginning of year $ ( 1,875 ) $ ( 2,201 ) $ ( 1,600 )

Net income (loss) arising from retirement benefit obligations, net of tax

Net income (loss) arising from retirement benefit obligations, net of tax of $( 359 ), $( 64 ) and $ 259

1,054 191 ( 680 )

Amount reclassified from accumulated other comprehensive loss:

Amortization of loss, net of tax

Amortization of loss, net of tax of $( 39 ), $( 45 ) and $( 52 )

Net effects of retirement benefit obligations $ 1,170 $ 326 $ ( 601 )

Balance at end of year $ ( 705 ) $ ( 1,875 ) $ ( 2,201 )

1 unchanged sentence

$ ( 35,854 ) $ ( 33,549 ) $ ( 39,172 )

(1) Amount is recorded in equity in earnings on the consolidated statements of operations.

(2) Amounts reclassified are recorded in interest expense and cost of goods sold on the consolidated statements of operations.

(1) Amount is recorded in equity in (losses) earnings on the consolidated statements of operations.

(2) Amounts are recorded in interest expense and cost of goods sold on the consolidated statements of operations.

(3) Amount is recorded in selling, general and administrative expenses on the consolidated statements of operations.

NOTE 17 — SUBSEQUENT EVENTS

On March 2, 2022, the Company completed the acquisition of certain assets of Can't Live Without It, LLC.

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

S'well is a global designer, wholesaler and retailer of reusable, vacuum-insulated products.

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

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

LIFETIME BRANDS, INC.

4 unchanged sentences

expenses Deductions Balance at

Year ended Year ended December 31, 2021

Year ended December 31, 2022

Deducted from asset accounts:

3 unchanged sentences

$ 16,544 $ 6,623 $ ( 8,561 ) $ 14,606

Year ended Year ended December 31, 2020

Year ended December 31, 2021

Deducted from asset accounts:

3 unchanged sentences

$ 17,013 $ 9,083 $ ( 9,552 ) $ 16,544

Year ended Year ended December 31, 2019

Year ended December 31, 2020

Deducted from asset accounts:

7 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures