What changed in this filing

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Item 1. Financial Statements

2023-08-03 compared with 2023-05-10 · 254 added, 173 removed, 723 unchanged (37% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 15,122 $ 23,598

Accounts receivable, less allowances of $ 15,832 at March 31, 2023 and $ 14,606 at December 31, 2022

Accounts receivable, less allowances of $ 15,452 at June 30, 2023 and $ 14,606 at December 31, 2022

114,965 141,195

28 unchanged sentences

Common stock, $ 0.01 par value, shares authorized:

50,000,000 at March 31, 2023 and December 31, 2022;

50,000,000 at June 30, 2023 and December 31, 2022;

shares issued and outstanding:

21,690,766 at March 31, 2023 and 21,779,799 at December 31, 2022

21,814,236 at June 30, 2023 and 21,779,799 at December 31, 2022

Paid-in capital 275,915 274,579

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net sales $ 146,436 $ 151,314 $ 291,871 $ 334,031

4 unchanged sentences

Restructuring expenses — — 856 —

(Loss) income from operations

Income (loss) from operations

4,396 ( 464 ) 2,590 3,891

Interest expense ( 5,528 ) ( 3,732 ) ( 10,864 ) ( 7,499 )

Mark to market (loss) gain on interest rate derivatives

Mark to market gain (loss) on interest rate derivatives

197 304 ( 37 ) 1,353

(Loss) income before income taxes and equity in (losses) earnings

Gain on early retirement of debt 1,520 — 1,520 —

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

585 ( 3,892 ) ( 6,791 ) ( 2,255 )

Income tax benefit (provision)

Income tax (provision) benefit

( 1,242 ) 98 106 ( 1,575 )

1 unchanged sentence

( 5,863 ) 334 ( 8,640 ) 750

NET (LOSS) INCOME

$ ( 6,520 ) $ ( 3,460 ) $ ( 15,325 ) $ ( 3,080 )

BASIC (LOSS) INCOME PER COMMON SHARE

BASIC LOSS PER COMMON SHARE

$ ( 0.31 ) $ ( 0.16 ) $ ( 0.72 ) $ ( 0.14 )

DILUTED (LOSS) INCOME PER COMMON SHARE

DILUTED LOSS PER COMMON SHARE

$ ( 0.31 ) $ ( 0.16 ) $ ( 0.72 ) $ ( 0.14 )

1 unchanged sentence

LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Three Months Ended

Net (loss) income

June 30, Six Months Ended

2023 2022 2023 2022

Other comprehensive income, net of taxes:

$ ( 6,520 ) $ ( 3,460 ) $ ( 15,325 ) $ ( 3,080 )

Other comprehensive income (loss), net of taxes:

Translation adjustment 1,237 ( 4,307 ) 2,798 ( 4,423 )

1 unchanged sentence

Effect of retirement benefit obligations 11 29 23 58

Other comprehensive income, net of taxes

Comprehensive (loss) income

Other comprehensive income (loss), net of taxes

948 ( 3,328 ) 1,368 ( 2,807 )

Comprehensive loss

$ ( 5,572 ) $ ( 6,788 ) $ ( 13,957 ) $ ( 5,887 )

See accompanying notes to unaudited condensed consolidated financial statements.

21 unchanged sentences

21,691 $ 217 $ 275,004 $ ( 11,126 ) $ ( 35,434 ) $ 228,661

— — — ( 6,520 ) — ( 6,520 )

Other comprehensive income, net of taxes

— — — — 948 948

Net issuance of restricted shares granted to employees and directors 141 1 ( 1 ) — — —

Stock compensation expense — — 1,010 — — 1,010

Shares effectively repurchased for required employee withholding taxes ( 18 ) — ( 98 ) — — ( 98 )

Dividends (1)

— — — ( 950 ) — ( 950 )

BALANCE AT JUNE 30, 2023

21,814 $ 218 $ 275,915 $ ( 18,596 ) $ ( 34,486 ) $ 223,051

Common stock Paid-in

18 unchanged sentences

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

(1) Cash dividends declared per share of common stock were $ 0.0425 and $ 0.0425 in the three months ended March 31, 2023 and 2022, respectively.

— — — ( 3,460 ) — ( 3,460 )

Other comprehensive loss, net of taxes

( 3,328 ) ( 3,328 )

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

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

Net exercise of stock options 3 — — — — —

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

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

Dividends (1)

— — — ( 958 ) — ( 958 )

BALANCE AT JUNE 30, 2022

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

(1) Cash dividends declared per share of common stock were $ 0.085 and $ 0.085 in the six months ended June 30, 2023 and 2022, respectively.

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

(in thousands)(unaudited)

Six Months Ended

OPERATING ACTIVITIES

Net (loss) income

$ ( 15,325 ) $ ( 3,080 )

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

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

Depreciation and amortization 9,795 9,937

1 unchanged sentence

Mark to market loss (gain) on interest rate derivatives

234 ( 1,049 )

Non-cash lease adjustment ( 1,255 ) ( 690 )

4 unchanged sentences

8,640 ( 750 )

Contingent consideration fair value adjustments ( 50 ) —

Gain on early retirement of debt ( 1,520 ) —

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

5 unchanged sentences

Income taxes payable ( 245 ) ( 558 )

NET CASH PROVIDED BY OPERATING ACTIVITIES

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

28,993 ( 8,857 )

8 unchanged sentences

Repayments of term loan ( 44,866 ) ( 6,216 )

Proceeds from short-term loan — 30

Payment of financing costs ( 433 ) —

Payments for finance lease obligations ( 14 ) ( 17 )

3 unchanged sentences

Cash dividends paid ( 1,907 ) ( 1,929 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

( 36,464 ) 7,745

Effect of foreign exchange on cash ( 12 ) ( 238 )

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

DECREASE IN CASH AND CASH EQUIVALENTS

( 8,476 ) ( 20,785 )

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

14 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

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

13 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

Cost of sales

13 unchanged sentences

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

The Company did not sell receivables to HSBC during the three months ended March 31, 2023.

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

Charges of $ 0.1 million related to the sale of the receivables are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2022.

At March 31, 2023 and 2022, zero and $ 28.1 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

At March 31, 2023, $ 21.9 million of accounts receivables were available for sale to HSBC, net of applicable charges.

The Company did not sell receivables to HSBC during the three and six months ended June 30, 2023.

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

Charges of $ 0.2 million and $ 0.3 million, respectively, related to the sale of the receivables were included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2022.

At June 30, 2023 and 2022, zero and $ 25.6 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

At June 30, 2023, $ 23.3 million of accounts receivables were available for sale to HSBC, net of applicable charges.

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

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

Fair value of financial instruments

28 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

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

31 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

In the fourth quarter of 2022, the Company's U.S.

1 unchanged sentence

segment's sales management structure.

At March 31, 2023, the accrual balance was $ 0.3 million, and the remaining payments are expected to be paid within fiscal year 2023.

During the three months ended March 31, 2023, the Company incurred $ 0.8 million of unallocated corporate expense related to the termination payment with its Executive Chairman, Jeffrey Siegel.

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

At June 30, 2023, the accrual balance was $ 0.2 million, and the remaining payments are expected to be paid within fiscal year 2023.

During the six months ended June 30, 2023, the Company incurred $ 0.8 million of unallocated corporate expense related to the termination payment with its Executive Chairman, Jeffrey Siegel (the "Executive Chairman").

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

The employment agreement provided for a one-time termination payment.

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

At March 31, 2023, the accrual balance was $ 1.4 million.

The termination payment was paid on April 7, 2023.

11 unchanged sentences

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

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 0.5 million and $ 1.0 million for the three months ended March 31, 2023 and 2022, respectively.

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 0.5 million and $ 0.9 million for the three and six months ended June 30, 2023, respectively and $ 1.0 million and $ 2.0 million for the three and six months ended June 30, 2022, respectively.

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

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended

June 30, 2023

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three and six months ended June 30, 2023 and 2022 (in thousands):

Three Months Ended Six Months Ended

June 30, June 30,

2023 2022 2023 2022

Kitchenware $ 84,015 $ 84,345 $ 169,747 $ 198,475

19 unchanged sentences

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 unaudited condensed consolidated statements of operations for the three months ended March 31, 2022.

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

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):

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

Purchase Price Allocation

11 unchanged sentences

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

MPA International, LP

On May 3, 2023, the Company executed an asset purchase agreement to acquire the assets of MPA International, LP (a U.S.

based company) and its subsidiary, Compania de Servicios de Manufactura de la Frontera, S.

de C.V (COSMA).

The estimated purchase price is approximately $ 0.4 million, with the asset purchases and transfers expected to occur in the second and third quarter of 2023.

The acquisition will result in the Company having manufacturing operations in Mexico in the form of a maquiladora producing a variety of plastic molded products, primarily for the Company’s kitchenware products.

Included in Selling, general and administrative expenses for the three and six months ended June 30, 2023 is a $( 0.1 ) million credit to reflect the change in fair value of a contingent consideration obligation acquired by the Company in connection with its acquisition of S'well.

NOTE 4 — LEASES

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

The components of lease expense for the three months ended March 31, 2023 and 2022 were as follows (in thousands):

The components of lease expense for the three and six months ended June 30, 2023 and 2022 were as follows (in thousands):

Three Months Ended

Six Months Ended

2023 2022 2023 2022

Operating lease expenses (1) :

3 unchanged sentences

(1) Expenses are recorded within distribution expenses and selling, general and administrative expenses on the unaudited condensed consolidated statement of operations.

Supplemental cash flow information for lease related liabilities and assets for the three months ended March 31, 2023 and 2022 were as follows (in thousands):

Three Months Ended

Supplemental cash flow information for lease related liabilities and assets for the six months ended June 30, 2023 and 2022 were as follows (in thousands):

Six Months Ended

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

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

Three Months Ended

June 30, 2023

Six Months Ended

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

Operating leases $ 2,715 $ 2,452

The aggregate future lease payments for operating leases as of March 31, 2023 were as follows (in thousands):

2023 (excluding the three months ended March 31, 2023)

The aggregate future lease payments for operating leases as of June 30, 2023 were as follows (in thousands):

2023 (excluding the six months ended June 30, 2023)

Thereafter 17,082

3 unchanged sentences

Average lease terms and discount rates were as follows:

March 31, 2023

June 30, 2023

Operating leases:

2 unchanged sentences

NOTE 5 — INVESTMENTS

As of March 31, 2023, the Company owned 24.7 % of the outstanding capital stock of Grupo Vasconia S.A.B.

As of June 30, 2023, the Company owned 24.7 % of the outstanding capital stock of Grupo Vasconia S.A.B.

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

2 unchanged sentences

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

Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to the customer relationships acquired) for the three months ended March 31, 2023 and 2022 in the accompanying unaudited condensed consolidated statements of operations.

Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to the customer relationships acquired) for the three and six months ended June 30, 2023 and 2022 in the accompanying unaudited condensed consolidated statements of operations.

The Company’s equity in (losses) earnings, net of taxes, for the three and six months ended June 30, 2023 and 2022 included the following:

Three Months Ended

June 30, Six Months Ended

Vasconia equity in (losses) earnings, net of taxes

$ ( 1,422 ) $ 334 $ ( 2,146 ) $ 750

Impairment on investment in Vasconia ( 4,441 ) — ( 6,494 ) —

Equity in (losses) earnings, net of taxes

$ ( 5,863 ) $ 334 $ ( 8,640 ) $ 750

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

Dollars (“USD”) using the spot rates of MXN 18.06 and MXN 19.47 at March 31, 2023 and December 31, 2022, respectively.

Dollars (“USD”) using the spot rates of MXN 17.11 and MXN 19.47 at June 30, 2023 and December 31, 2022, respectively.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

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

Three Months Ended

Six Months Ended

2023 2022 2023 2022

Average exchange rate (USD to MXN) 17.68

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in an increase to the investment of $ 0.7 million and $ 0.1 million during the three months ended March 31, 2023 and 2022, respectively.

20.02 17.68 - 18.66

20.02 - 20.50

The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in an increase to the investment of $ 1.4 million and a decrease of $ 0.9 million during the six months ended June 30, 2023 and 2022, respectively.

These translation effects are recorded in accumulated other comprehensive loss.

Summarized income statement information for the three months ended March 31, 2023 and 2022 for Vasconia in USD and MXN is as follows (in thousands):

Summarized income statement information for the three and six months ended June 30, 2023 and 2022 for Vasconia in USD and MXN is as follows (in thousands):

Three Months Ended

2 unchanged sentences

9,680 171,152 10,804 216,297

Income from operations

193 3,401 518 10,366

Net (loss) income

( 5,755 ) ( 101,737 ) 1,403 28,091

Six Months Ended

USD MXN USD MXN

Net sales $ 82,792 $ 1,503,692 $ 130,513 $ 2,643,750

18,336 332,665 25,224 511,915

(Loss) income from operations

2 unchanged sentences

( 8,686 ) ( 156,433 ) 3,134 63,570

The Company recorded equity in (losses) earnings of Vasconia, net of taxes, of $( 0.7 ) million and $ 0.4 million for the three months ended March 31, 2023 and 2022, respectively.

The Company recorded equity in (losses) earnings of Vasconia, net of taxes, of $( 1.4 ) million and $( 2.1 ) million for the three and six months ended June 30, 2023, respectively.

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

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

Vasconia due to and due from balances Balance Sheet Location March 31, 2023 December 31, 2022

Vasconia due to and due from balances Balance Sheet Location June 30, 2023 December 31, 2022

Amounts due from Vasconia Prepaid expenses and other current assets $ 24 $ 48

Amounts due to Vasconia Accrued expenses and Accounts payable ( 93 ) ( 16 )

The fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia declined in the first quarter of 2023.

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 $ 2.1 million during the three months ended March 31, 2023 to its fair value, and recognized the non-cash impairment charge within equity in (losses) earnings in the unaudited condensed consolidated statement of operations.

The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $ 10.4 million as of March 31, 2023.

As of December 31, 2022, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $ 15.0 million, respectively.

The carrying value of the Company’s investment in Vasconia was $ 12.5 million as of December 31, 2022.

The fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia declined in 2023.

As a result of the decline in the quoted stock price, the continued decline in the operating results of Vasconia and the recent downgrade in Vasconia’s debt rating, the Company determined the decline in fair value was other than temporary.

The Company reduced its investment by $ 4.4 million during the three months ended June 30, 2023 to its fair value, and recognized the non-cash impairment charge within equity in (losses) earnings in the unaudited condensed consolidated statement of operations.

The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $ 5.3 million as of June 30, 2023.

For the six months ended June 30, 2023 , the Company has recognized non-cash impairment charges of $ 6.5 million.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

As of December 31, 2022, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $ 15.0 million, respectively.

The carrying value of the Company’s investment in Vasconia was $ 12.5 million as of December 31, 2022.

NOTE 6 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of March 31, 2023 and December 31, 2022 (in thousands):

March 31, 2023 December 31, 2022

Intangible assets consisted of the following as of June 30, 2023 and December 31, 2022 (in thousands):

June 30, 2023 December 31, 2022

Gross Accumulated

4 unchanged sentences

Trade names (1)

49,600 — 49,600 49,600 — 49,600

Finite-lived intangible assets:

6 unchanged sentences

Total $ 302,594 $ ( 95,986 ) $ 206,608 $ 302,482 $ ( 88,595 ) $ 213,887

(1) The gross and net value at March 31, 2023 and December 31, 2022 reflect a reduction of $ 91.7 million in impairment charges on goodwill and $ 1.0 million in impairment charges on indefinite-lived intangible assets.

(2) The gross value and accumulated amortization at March 31, 2023 reflect a reduction of $ 44.1 million and $( 29.3 ) million, respectively, for the net $ 14.8 million previous impairment charge on finite-lived intangible assets within the international segment and a $ 6.5 million reduction in gross value for previous impairment charges on finite-lived intangible assets within the U.S.

(1) The gross and net value at June 30, 2023 and December 31, 2022 reflect a reduction of $ 91.7 million in impairment charges on goodwill and $ 1.0 million in impairment charges on indefinite-lived intangible assets.

(2) The gross value and accumulated amortization at June 30, 2023 reflect a reduction of $ 44.1 million and $( 29.3 ) million, respectively, for the net $ 14.8 million previous impairment charge on finite-lived intangible assets within the international segment and a $ 6.5 million reduction in gross value for previous impairment charges on finite-lived intangible assets within the U.S.

NOTE 7 — DEBT

12 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

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.

As of March 31, 2023 and December 31, 2022, the total availability under the ABL Agreement was as follows (in thousands):

March 31, 2023

June 30, 2023

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.

As of June 30, 2023 and December 31, 2022, the total availability under the ABL Agreement was as follows (in thousands):

June 30, 2023

December 31, 2022

7 unchanged sentences

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

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

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

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

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

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current portion of Term Loan:

6 unchanged sentences

Total Non-current portion of Term Loan $ 181,950 $ 242,857

The estimated Excess Cash Flow principal payment recorded at March 31, 2023 represents the Company’s estimate for the 2024 Excess Cash Flow Payment.

The estimated Excess Cash Flow principal payment recorded at June 30, 2023 represents the Company’s estimate for the 2024 Excess Cash Flow Payment.

There was no Excess Cash Flow payment due in 2023.

2 unchanged sentences

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

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

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

June 30, 2023

subsidiary borrowers, subject to certain limitations.

subsidiary guarantors, subject to certain exceptions.

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

3 unchanged sentences

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 March 31, 2023 was between 4.18 % and 4.21 %.

The Company paid a commitment fee of 0.25 % during the three months ended March 31, 2023.

The interest rate on outstanding borrowings under the ABL Agreement at June 30, 2023 was 4.93 %.

The Company paid a commitment fee of 0.25 % during the six months ended June 30, 2023.

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

(i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.5 % or (z) one-month 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 March 31, 2023 was 8.42 %.

The interest rate on outstanding borrowings under the Term Loan at June 30, 2023 was 8.72 %.

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

1 unchanged sentence

Further, the ABL Agreement provides that during any period (a) commencing on the last day of the most recently ended four consecutive fiscal quarters on or prior to the date availability under the ABL Agreement is less than the greater of $ 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 March 31, 2023.

The Company was in compliance with the covenants of the Debt Agreements at June 30, 2023.

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

1 unchanged sentence

Interest Rate Swap Agreements

The Company’s total outstanding notional value of interest rate swaps was $ 25.0 million at March 31, 2023.

The Company’s total outstanding notional value of interest rate swaps was $ 25.0 million at June 30, 2023.

These non-designated interest rate swaps were entered into in June 2019 and serve as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings and expire in February 2025.

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

The Company has no designated interest rate swaps at March 31, 2023.

The Company has no designated interest rate swaps at June 30, 2023.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

Foreign Exchange Contracts

1 unchanged sentence

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

limiting the impact of foreign currency exchange rate fluctuations on earnings.

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

The Company purchases foreign currency forward contracts with terms less than 18 months to protect against currency exchange risks associated with the payment of 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 value of foreign exchange contracts at March 31, 2023 was $ 8.3 million.

The aggregate gross notional value of foreign exchange contracts at June 30, 2023 was $ 7.0 million.

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

4 unchanged sentences

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

The Company does not enter into such contracts for speculative purposes, and as of March 31, 2023, the Company did not have any foreign currency forward contract derivatives that are not designated as hedges.

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

The Company does not enter into such contracts for speculative purposes, and as of June 30, 2023, these foreign exchange contracts have been designated as hedges in to order to apply hedge accounting.

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

Derivatives designated as hedging instruments Balance Sheet Location March 31, 2023 December 31, 2022

Derivatives designated as hedging instruments Balance Sheet Location June 30, 2023 December 31, 2022

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

Foreign exchange contracts Accrued expenses 419 260

Derivatives not designated as hedging instruments Balance Sheet Location March 31, 2023 December 31, 2022

Derivatives not designated as hedging instruments Balance Sheet Location June 30, 2023 December 31, 2022

Interest rate swaps Other assets $ 1,255 $ 1,292

3 unchanged sentences

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

As of March 31, 2023, the Company did not anticipate non-performance by any of its counterparties.

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

As of June 30, 2023, the Company did not anticipate non-performance by any of its counterparties.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

Three Months Ended

June 30, Six Months Ended

Derivatives designated as hedging instruments 2023 2022 2023 2022

2 unchanged sentences

$ ( 300 ) $ 950 $ ( 1,453 ) $ 1,558

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

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

The Company’s interest rate swaps that were designated as hedging instruments had an aggregate notional value of $ 25.0 million and matured during the three months ended March 31, 2023.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

During the three months ended March 31, 2023, the Company reclassified $ 0.9 million of cash flow hedges in accumulated other comprehensive losses to earnings.

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

During the three months ended June 30, 2023, the Company reclassified $ 0.04 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This was a gain of $ 0.04 million related to foreign exchange contracts recognized in cost of sales.

During the six months ended June 30, 2023, the Company reclassified $ 0.9 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This was comprised of a gain of $ 0.1 million related to realized interest rate swap and a gain of $ 0.8 million related to foreign exchange contracts recognized in cost of sales.

At March 31, 2023, the estimated amount of existing net losses expected to be reclassified into earnings within the next 12 months was $ 0.3 million.

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

At June 30, 2023, the estimated amount of existing net losses expected to be reclassified into earnings within the next 12 months was $ 0.6 million.

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

This was comprised of $ 0.1 million related to realized interest rate swap losses and a gain of $ 0.2 million related to foreign exchange contracts recognized in cost of sales.

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

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

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

Three Months Ended

June 30, Six Months Ended

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

Interest rate swaps Mark to market (loss) gain on interest rate derivatives

Interest rate swaps Mark to market gain (loss) on interest rate derivatives

$ 197 $ 304 $ ( 37 ) $ 1,353

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 9 — STOCK COMPENSATION

As of March 31, 2023, there were 652,923 shares available for the grant of awards under the Company's Amended and Restated 2000 Long Term Incentive Plan ( “ Plan ” ), assuming maximum performance of performance-based awards.

As of June 30, 2023, there were 618,812 shares available for the grant of awards under the Company's Amended and Restated 2000 Long Term Incentive Plan ( “ Plan ” ), assuming maximum performance of performance-based awards.

Option Awards

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2023 is as follows:

A summary of the Company’s stock option activity and related information for the six months ended June 30, 2023 is as follows:

Options Weighted-

7 unchanged sentences

Expirations ( 107,875 ) 13.17

Options outstanding, March 31, 2023

Options outstanding, June 30, 2023

1,003,500 13.34 4.6 $ —

Options exercisable, March 31, 2023

Options exercisable, June 30, 2023

887,875 $ 13.87 4.0 $ —

1 unchanged sentence

Weighted-average years expected to be recognized over 1.9

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their stock options on March 31, 2023.

The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on March 31, 2023 and the exercise price.

On March 8, 2023, the exercise period for the Executive Chairman’s outstanding vested stock options were extended to remain exercisable until ninety days following termination of his service on the Company's Board of Directors.

The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on June 30, 2023 and the exercise price.

The outstanding stock options remain subject to original expiration dates of such awards.

1 unchanged sentence

Restricted Stock

A summary of the Company’s restricted stock activity and related information for the three months ended March 31, 2023 is as follows:

A summary of the Company’s restricted stock activity and related information for the six months ended June 30, 2023 is as follows:

Shares Weighted-

5 unchanged sentences

Cancellations ( 6,783 ) 11.07

Non-vested restricted shares, March 31, 2023

Non-vested restricted shares, June 30, 2023

598,623 $ 8.44

1 unchanged sentence

Weighted-average years expected to be recognized over 1.7

The total fair value of restricted stock that vested during the three months ended March 31, 2023 was $ 0.6 million.

The total fair value of restricted stock that vested during the six months ended June 30, 2023 was $ 1.2 million.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

Performance shares

Each performance award represents the right to receive up to 150 % of the target number of shares of common stock.

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

A summary of the Company’s performance-based award activity and related information for the three months ended March 31, 2023 is as follows:

A summary of the Company’s performance-based award activity and related information for the six months ended June 30, 2023 is as follows:

average grant

5 unchanged sentences

Cancellations ( 858 ) 14.18

Non-vested performance-based awards, March 31, 2023

Non-vested performance-based awards, June 30, 2023

487,722 $ 10.44

3 unchanged sentences

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

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

These awards vested in the six months ended June 30, 2023.

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

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

The total fair value of performance-based awards that vested during the three months ended March 31, 2023 was $ 0.7 million.

The total fair value of performance-based awards that vested during the six months ended June 30, 2023 was $ 0.7 million.

Cash-settled performance-based awards

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

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

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

A summary of the Company’s cash-settled performance-based awards activity and related information for the three months ended March 31, 2023 is as follows:

A summary of the Company’s cash-settled performance-based awards activity and related information for the six months ended June 30, 2023 is as follows:

Cash-settled performance-based awards (1)

2 unchanged sentences

Cancellations ( 1,790 ) 5.65

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

Non-vested cash-settled performance-based awards, June 30, 2023

83,986 $ 5.65

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

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

Three Months Ended

Six Months Ended

Stock Compensation Expense Components 2023 2022 2023 2022

5 unchanged sentences

Total Stock Compensation Expense $ 1,011 $ 1,365 $ 1,872 $ 2,539

NOTE 10 — (LOSS) INCOME PER COMMON SHARE

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

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

NOTE 10 — LOSS PER COMMON SHARE

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

Diluted loss per common share adjusts net loss and basic loss 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 (loss) income per common share for the three months ended March 31, 2023 and 2022 are as follows:

The calculations of basic and diluted loss per common share for the three and six months ended June 30, 2023 and 2022 are as follows:

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(in thousands, except per share amounts)

Net (loss) income – Basic and Diluted

Net loss – Basic and Diluted

$ ( 6,520 ) $ ( 3,460 ) $ ( 15,325 ) $ ( 3,080 )

3 unchanged sentences

Weighted-average shares outstanding – Diluted 21,123 21,531 21,174 21,642

Basic (loss) income per common share

Basic loss per common share

$ ( 0.31 ) $ ( 0.16 ) $ ( 0.72 ) $ ( 0.14 )

Diluted (loss) income per common share

Diluted loss per common share

$ ( 0.31 ) $ ( 0.16 ) $ ( 0.72 ) $ ( 0.14 )

Antidilutive Securities (1)

1,624 1,704 1,603 1,671

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 11— INCOME TAXES

Income tax benefit of $ 1.3 million and income tax provision of $ 1.7 million for the three months ended March 31, 2023 and 2022, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax benefit rate of 18.3 % and income tax provision rate of 102.2 %, respectively.

The effective tax rate for the three months ended March 31, 2023 differs from the federal statutory income tax rate of 21.0 % primarily due to state and local tax expense, the impact of non-deductible expenses, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

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

Income tax provision of $ 1.2 million and income tax benefit of $ 0.1 million for the three and six months ended June 30, 2023, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax provision rate of 212.3 % and income tax benefit rate of 1.6 %, respectively.

The effective tax rate for the three months ended June 30, 2023 differs from the federal statutory income tax rate of 21.0 % primarily due to state and local tax expense, the impact of non-deductible expenses, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance, partially offset by a benefit for federal credits.

The effective tax rate for the six months ended June 30, 2023 differs from the federal statutory income tax rate of 21.0 % primarily due to state and local tax expense and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

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

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

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

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

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

1 unchanged sentence

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

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended March 31, 2023 and March 31, 2022.

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended June 30, 2023 and June 30, 2022.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 12 – BUSINESS SEGMENTS

5 unchanged sentences

Management evaluates the performance of the U.S.

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

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

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

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(in thousands)

2 unchanged sentences

Total net sales $ 146,436 $ 151,314 $ 291,871 $ 334,031

(Loss) income from operations

Income (loss) from operations

$ 11,736 $ 7,530 $ 17,690 $ 21,856

1 unchanged sentence

Unallocated corporate expenses ( 4,511 ) ( 4,922 ) ( 10,379 ) ( 10,775 )

(Loss) income from operations

Income (loss) from operations

$ 4,396 $ ( 464 ) $ 2,590 $ 3,891

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 13 — CONTINGENCIES

31 unchanged sentences

Government (the Department of Justice and the EPA) and other potentially responsible parties with respect to the remedial work at OU-1.

WSPR anticipates finalizing a Consent Decree for Remedial Design and Remedial Action at OU-1 in the near term.

While the U.S.

Government and the potentially responsible parties (including WSPR) all signed the Consent Decree as of July 19, 2023, several procedural steps remain before the Consent Decree is effective.

On July 26, 2023, the U.S.

Government filed a complaint in United States District Court for the District of Puerto Rico for the purpose of seeking judicial approval of the Consent Decree, which is required for the Consent Decree to be effective.

As required by applicable regulations, the U.S.

Government simultaneously

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

lodged the Consent Decree for public comment.

After conclusion of the comment period, the U.S.

Government will file with the Court any comments received as well as responses to the comments.

At that time, if appropriate, the U.S.

Government will file a Motion to Enter the Consent Decree.

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.

26 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 14 — OTHER

Cash dividends

Dividends declared in the three months ended March 31, 2023 were as follows:

Dividends declared in the six months ended June 30, 2023 were as follows:

Dividend per share Date declared Date of record Payment date

$ 0.0425 3/8/2023 5/1/2023 5/15/2023

During the three months ended March 31, 2023, the Company paid dividends of $ 1.0 million.

This included payments made on February 15, 2023 of $ 0.9 million to stockholders of record on February 1, 2023 and payments of $ 0.1 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended March 31, 2023, the Company reduced retained earnings for the accrual of $ 0.9 million relating to the dividend payable on May 15, 2023.

$ 0.0425 6/22/2023 8/1/2023 8/15/2023

During the six months ended June 30, 2023, the Company paid dividends of $ 1.9 million.

This included payments made on February 15, 2023 and May 15, 2023 of $ 0.9 million and $ 0.9 million to stockholders of record on February 1, 2023 and May 1, 2023, respectively, and payments of $ 0.1 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended June 30, 2023, the Company reduced retained earnings for the accrual of $ 1.0 million relating to the dividend payable on August 15, 2023.

On August 2, 2023, the Board declared a quarterly dividend of $ 0.0425 per share of common stock payable on November 15, 2023 to stockholders of record on November 1, 2023.

Stock repurchase program

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 million share repurchase program.

On March 14, 2022, the Company announced that its Board 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 the repurchases from time to time through open market purchases and privately negotiated transactions.

During the three months ended March 31, 2023, the Company repurchased 320,204 shares for a total cost of $ 2.5 million and thereafter retired the shares.

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

During the six months ended June 30, 2023, the Company repurchased 320,204 shares for a total cost of $ 2.5 million and thereafter retired the shares.

Supplemental cash flow information

Three Months Ended

Six Months Ended

(in thousands)

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

Components of accumulated other comprehensive loss, net

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(in thousands)

6 unchanged sentences

Change in unrealized (losses) gains

( 261 ) 1,079 ( 511 ) 1,577

Amounts reclassified from accumulated other comprehensive loss:

Settlement of cash flow hedge (1)

( 39 ) ( 129 ) ( 942 ) ( 19 )

Net change in cash flow hedges, net of taxes of $ 0 , $ 243 , $( 2 ), $ 413

11 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements