What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-09 compared with 2023-08-03 · 266 added, 203 removed, 774 unchanged (38% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

2023 December 31,

1 unchanged sentence

Cash and cash equivalents $ 6,318 $ 23,598

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

Accounts receivable, less allowances of $ 16,810 at September 30, 2023 and $ 14,606 at December 31, 2022

153,456 141,195

28 unchanged sentences

Common stock, $ 0.01 par value, shares authorized:

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

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

shares issued and outstanding:

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

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

Paid-in capital 276,813 274,579

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Restructuring expenses — — 856 —

Income (loss) from operations

Wallace facility remediation expense — 5,140 — 5,140

Income from operations

13,612 7,590 16,202 11,481

Interest expense ( 5,246 ) ( 4,581 ) ( 16,110 ) ( 12,080 )

Mark to market gain (loss) on interest rate derivatives

Mark to market (loss) gain on interest rate derivatives

( 98 ) 637 ( 135 ) 1,990

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

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

Income before income taxes and equity in losses

8,268 3,646 1,477 1,391

Income tax (provision) benefit

Income tax provision

( 3,015 ) ( 1,845 ) ( 2,909 ) ( 3,420 )

Equity in (losses) earnings, net of taxes

Equity in losses, net of taxes

( 1,047 ) ( 8,159 ) ( 9,687 ) ( 7,409 )

NET INCOME (LOSS)

$ 4,206 $ ( 6,358 ) $ ( 11,119 ) $ ( 9,438 )

BASIC LOSS PER COMMON SHARE

BASIC INCOME (LOSS) PER COMMON SHARE

$ 0.20 $ ( 0.30 ) $ ( 0.52 ) $ ( 0.44 )

DILUTED LOSS PER COMMON SHARE

DILUTED INCOME (LOSS) PER COMMON SHARE

$ 0.20 $ ( 0.30 ) $ ( 0.52 ) $ ( 0.44 )

1 unchanged sentence

LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Net income (loss)

$ 4,206 $ ( 6,358 ) $ ( 11,119 ) $ ( 9,438 )

Other comprehensive income (loss), net of taxes:

Other comprehensive (loss) income, net of taxes:

Translation adjustment ( 1,242 ) ( 2,686 ) 1,556 ( 7,109 )

1 unchanged sentence

Effect of retirement benefit obligations 12 29 35 87

Other comprehensive income (loss), net of taxes

Other comprehensive (loss) income, net of taxes

( 795 ) ( 2,303 ) 573 ( 5,110 )

Comprehensive loss

Comprehensive income (loss)

$ 3,411 $ ( 8,661 ) $ ( 10,546 ) $ ( 14,548 )

32 unchanged sentences

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

— — — 4,206 — 4,206

Other comprehensive loss, net of taxes

— — — — ( 795 ) ( 795 )

Stock compensation expense — — 898 — — 898

Dividends (1)

— — — ( 943 ) — ( 943 )

BALANCE AT SEPTEMBER 30, 2023

21,814 $ 218 $ 276,813 $ ( 15,333 ) $ ( 35,281 ) $ 226,417

(1) Cash dividends declared per share of common stock were $ 0.1275 and $ 0.1275 in the nine months ended September 30, 2023 and 2022, respectively.

Common stock Paid-in

30 unchanged sentences

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.

— — — ( 6,358 ) — ( 6,358 )

Other comprehensive loss, net of taxes

( 2,303 ) ( 2,303 )

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

Stock compensation expense — — 1,023 — — 1,023

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

Stock repurchase ( 53 ) ( 1 ) ( 1 ) ( 477 ) ( 479 )

Dividends (1)

— — — ( 952 ) — ( 952 )

BALANCE AT SEPTEMBER 30, 2022

22,004 $ 220 $ 274,301 $ 437 $ ( 38,659 ) $ 236,299

(1) Cash dividends declared per share of common stock were $ 0.1275 and $ 0.1275 in the nine months ended September 30, 2023 and 2022, respectively.

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands) (unaudited)

Six Months Ended

Nine Months Ended

September 30,

OPERATING ACTIVITIES

4 unchanged sentences

Mark to market loss (gain) on interest rate derivatives

135 ( 1,990 )

Non-cash lease adjustment ( 1,617 ) ( 1,055 )

1 unchanged sentence

2,193 ( 140 )

Deferred income taxes 5 —

Stock compensation expense 2,770 3,565

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

8,640 ( 750 )

Undistributed losses from equity investment, net of taxes

Contingent consideration fair value adjustments ( 50 ) —

18 unchanged sentences

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

Proceeds from short-term loan — 30

Payment of financing costs ( 433 ) ( 882 )

14 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 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 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.

Operating results for the three and nine months ended September 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

June 30, 2023

September 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 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.

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

Pursuant to the Receivable Purchase Agreement, the Company sold to HSBC $ 30.0 million and $ 109.8 million of receivables during the three and nine months ended September 30, 2022, respectively.

Charges of $ 0.2 million and $ 0.5 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 nine months ended September 30, 2022.

At September 30, 2023 and 2022, zero and $ 20.2 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

At September 30, 2023, $ 24.8 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.

5 unchanged sentences

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

September 30,

2023 December 31, 2022

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 30, 2023

Fair value of financial instruments

15 unchanged sentences

Impairment testing is based upon the best information available, including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value.

The Company performed its annual impairment assessment of its U.S.

reporting unit as of October 1, 2022 by comparing the fair value of the reporting unit with its carrying value.

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

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

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

The significant assumptions used under the income approach, or discounted cash flow method, are projected net sales, projected earnings before interest, tax, depreciation and amortization (“EBITDA”), terminal growth rates, and the cost of capital.

3 unchanged sentences

Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results.

In addition, sustained declines in the Company’s stock price and related market capitalization could impact key assumptions in the overall estimated fair values of its reporting units and could result in non-cash impairment charges that could be material to the Company’s consolidated balance sheet or results of

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.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2023

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

These tests can include the relief from royalty model or other valuation models.

The Company completed the quantitative impairment analysis for its indefinite-lived assets as of October 1, 2022, 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 %.

The significant assumptions used in the relief from royalty model are future net sales for the related brands, royalty rates and the cost of capital to determine the fair value of the indefinite lived intangibles.

Long-lived assets, including intangible assets deemed to have finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

24 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

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

1 unchanged sentence

segment’s sales management structure.

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").

At September 30, 2023, the accrual balance was $ 0.1 million, and the remaining payments are expected to be paid within fiscal year 2023.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

During the nine months ended September 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.

14 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 $ 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.

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 0.8 million and $ 1.7 million for the three and nine months ended September 30, 2023, respectively and $ 1.2 million and $ 3.2 million for the three and nine months ended September 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

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,

September 30, 2023

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

Three Months Ended Nine Months Ended

September 30, September 30,

2023 2022 2023 2022

24 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 30, 2023

Purchase Price Allocation

11 unchanged sentences

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

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.

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

There was no such adjustment in the three months ended September 30, 2023.

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 and six months ended June 30, 2023 and 2022 were as follows (in thousands):

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

4 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 six months ended June 30, 2023 and 2022 were as follows (in thousands):

Six Months Ended

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

Nine Months Ended

September 30,

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

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

Six Months Ended

September 30, 2023

Nine Months Ended

September 30,

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

Operating leases $ 5,582 $ 2,477

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)

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

2023 (excluding the nine months ended September 30, 2023)

Thereafter 18,002

3 unchanged sentences

Average lease terms and discount rates were as follows:

June 30, 2023

September 30, 2023

Operating leases:

2 unchanged sentences

NOTE 5 — INVESTMENTS

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

As of September 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 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:

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

The Company’s equity in losses, net of taxes, for the three and nine months ended September 30, 2023 and 2022 included the following:

Three Months Ended

June 30, Six Months Ended

Vasconia equity in (losses) earnings, net of taxes

September 30, Nine Months Ended

September 30,

Vasconia equity in losses, net of taxes

$ ( 707 ) $ ( 1,991 ) $ ( 2,853 ) $ ( 1,241 )

Impairment on investment in Vasconia ( 340 ) ( 6,168 ) ( 6,834 ) ( 6,168 )

Equity in (losses) earnings, net of taxes

Equity in losses, net of taxes

$ ( 1,047 ) $ ( 8,159 ) $ ( 9,687 ) $ ( 7,409 )

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 17.11 and MXN 19.47 at June 30, 2023 and December 31, 2022, respectively.

Dollars (“USD”) using the spot rates of MXN 17.41 and MXN 19.47 at September 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:

September 30, 2023

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

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.

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 $ 1.1 million and a decrease of $ 0.5 million during the nine months ended September 30, 2023 and 2022, respectively.

These translation effects are recorded in accumulated other comprehensive loss.

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):

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

Three Months Ended

September 30,

USD MXN USD MXN

1 unchanged sentence

10,994 187,559 4,405 89,061

Income from operations

Loss from operations

( 1,060 ) ( 18,081 ) ( 5,459 ) ( 110,380 )

Net (loss) income

( 2,858 ) ( 48,771 ) ( 8,009 ) ( 161,936 )

Six Months Ended

Nine Months Ended

September 30,

USD MXN USD MXN

1 unchanged sentence

29,330 520,224 29,629 600,976

(Loss) income from operations

Loss from operations

( 1,874 ) ( 33,464 ) ( 256 ) ( 3,974 )

Net (loss) income

( 11,544 ) ( 205,204 ) ( 4,875 ) ( 98,366 )

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 June 30, 2023 December 31, 2022

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

Amounts due from Vasconia Prepaid expenses and other current assets $ 42 $ 48

2 unchanged sentences

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

June 30, 2023

The Company reduced its investment by $ 0.3 million during the three months ended September 30, 2023 to its fair value, and recognized the non-cash impairment charge within equity in losses in the unaudited condensed consolidated statement of operations.

The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $ 4.0 million as of September 30, 2023.

For the nine months ended September 30, 2023, the Company has recognized non-cash impairment charges of $ 6.8 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 was $ 15.0 million, respectively.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

NOTE 6 — INTANGIBLE ASSETS

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

June 30, 2023 December 31, 2022

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

September 30, 2023 December 31, 2022

Gross Accumulated

13 unchanged sentences

Total $ 302,501 $ ( 99,629 ) $ 202,872 $ 302,482 $ ( 88,595 ) $ 213,887

(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.

(1) The gross and net value at September 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 September 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.

In the third quarter of 2023, the Company observed a sustained decline in the market valuation of the Company's common stock over a twelve month period and an increase in the risk free interest rate.

Based on these factors and considering the limited excess fair value over carrying value observed in the last annual impairment test on October 1, 2022, the Company concluded that a triggering event had occurred and performed an interim impairment test of goodwill and certain intangible assets as of September 30, 2023.

The Company performed an interim impairment test of the goodwill in the U.S.

reporting unit by comparing its fair value with its carrying value.

The analysis was performed by using a discounted cash flow and market multiple method.

Based upon the analysis performed, the Company determined that the fair value of the Company's U.S.

reporting unit exceeded its carrying value, and therefore goodwill was not impaired.

As of September 30, 2023, the fair value of the U.S.

reporting unit exceeded the carrying value of goodwill by 4 %.

Indefinite-lived trade names

The Company performed an interim quantitative impairment analysis of its indefinite-lived trade names by comparing the fair value of the indefinite-lived trade names to their respective carrying values.

The Company values its indefinite-lived trade names using a relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company.

The Company determined that the fair value of all its indefinite-lived trade names were above their respective carrying values, and therefore its indefinite-lived intangible assets were not impair ed.

In connection with the interim impairment analysis, the Company determined that one trade name, previously estimated to contribute to cash flows indefinitely, has a definite life.

Accordingly, the trade name will be reclassified from indefinite-lived to finite-lived or amortizable intangible assets as of October 1, 2023.

The trade name will be amortized over an estimated useful life of 15 years.

As of September 30, 2023, the fair value of the Company’s indefinite-lived trade name exceeded the respective carrying value by 7 %.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

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.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

1 unchanged sentence

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

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

September 30, 2023

December 31, 2022

8 unchanged sentences

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.

The repurchase was executed by way of a reverse Dutch auction, pursuant to and in accordance with the

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

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.

1 unchanged sentence

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current portion of Term Loan:

6 unchanged sentences

Total Non-current portion of Term Loan $ 183,234 $ 242,857

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

The estimated Excess Cash Flow principal payment recorded at September 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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

subsidiary borrowers, subject to certain limitations.

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.

6 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 June 30, 2023 was 4.93 %.

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

The interest rate on outstanding borrowings under the ABL Agreement at September 30, 2023 was between 6.44 % and 8.75 %.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 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 June 30, 2023 was 8.72 %.

The interest rate on outstanding borrowings under the Term Loan at September 30, 2023 was 8.93 %.

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 June 30, 2023.

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

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

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

Foreign Exchange Contracts

4 unchanged sentences

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 June 30, 2023 was $ 7.0 million.

The aggregate gross notional value of foreign exchange contracts at September 30, 2023 was $ 8.8 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 June 30, 2023, these foreign exchange contracts have been designated as hedges in to order to apply hedge accounting.

The Company does

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

not enter into such contracts for speculative purposes, and as of September 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 June 30, 2023 December 31, 2022

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

Foreign exchange contracts Prepaid expenses and other current assets 152 —

Other Assets 33 —

Accrued expenses 39 260

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

Interest rate swaps Other assets $ 1,156 $ 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 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

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

As of September 30, 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 (loss) income, net of taxes, as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Derivatives designated as hedging instruments 2023 2022 2023 2022

2 unchanged sentences

$ 435 $ 354 $ ( 1,018 ) $ 1,912

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.

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’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 (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.

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

During the three months ended September 30, 2023, the Company reclassified $ 0.2 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This was a loss of $ 0.2 million related to foreign exchange contracts recognized in cost of sales.

During the nine months ended September 30, 2023, the Company reclassified $ 0.8 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 $ 0.7 million related to foreign exchange contracts recognized in cost of sales.

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.

At September 30, 2023, the estimated amount of existing net losses expected to be reclassified into earnings within the next 12 months was $ 0.2 million.

During the three months ended September 30, 2022, the Company reclassified $ 0.3 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This was comprised of $ 0.03 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.

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.

During the nine months ended September 30, 2022, the Company reclassified $ 0.3 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 $ 0.6 million related to foreign exchange contracts recognized in cost of sales.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

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

September 30, Nine Months Ended

September 30,

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

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

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

$ ( 98 ) $ 637 $ ( 135 ) $ 1,990

1 unchanged sentence

$ 120 $ 655 $ 444 $ 1,825

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

NOTE 9 — STOCK COMPENSATION

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.

As of September 30, 2023, there were 622,812 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 six months ended June 30, 2023 is as follows:

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

Options Weighted-

7 unchanged sentences

Expirations ( 111,875 ) 13.38

Options outstanding, June 30, 2023

Options outstanding, September 30, 2023

999,500 13.31 4.4 $ —

Options exercisable, June 30, 2023

Options exercisable, September 30, 2023

883,875 $ 13.85 3.8 $ —

1 unchanged sentence

Weighted-average years expected to be recognized over 1.7

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their stock options on June 30, 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 June 30, 2023 and the exercise price.

The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on September 30, 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 “ Board ” ).

1 unchanged sentence

The Company recorded $ 0.1 million of stock compensation expense in connection with this extension during the three months ended March 31, 2023.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

Restricted Stock

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

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

Shares Weighted-

5 unchanged sentences

Cancellations ( 6,783 ) 11.07

Non-vested restricted shares, June 30, 2023

Non-vested restricted shares, September 30, 2023

598,498 $ 8.44

1 unchanged sentence

Weighted-average years expected to be recognized over 1.5

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

June 30, 2023

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

Performance shares

2 unchanged sentences

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

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

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

average grant

5 unchanged sentences

Cancellations ( 858 ) 14.18

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

Non-vested performance-based awards, September 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 six months ended June 30, 2023.

These awards vested in the nine months ended September 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 six months ended June 30, 2023 was $ 0.7 million.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

Cash-settled performance-based awards

2 unchanged sentences

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 six months ended June 30, 2023 is as follows:

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

Cash-settled performance-based awards (1)

2 unchanged sentences

Cancellations ( 1,790 ) 5.63

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

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

83,986 $ 5.63

4 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

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

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Stock Compensation Expense Components 2023 2022 2023 2022

5 unchanged sentences

Total Stock Compensation Expense $ 898 $ 1,026 $ 2,770 $ 3,565

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.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

NOTE 10 — 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 during the relevant period.

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.

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 per common share for the three and six months ended June 30, 2023 and 2022 are as follows:

The calculations of basic and diluted income (loss) per common share for the three and nine months ended September 30, 2023 and 2022 are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

(in thousands, except per share amounts)

Net loss – Basic and Diluted

Net income (loss) – Basic and Diluted

$ 4,206 $ ( 6,358 ) $ ( 11,119 ) $ ( 9,438 )

3 unchanged sentences

Weighted-average shares outstanding – Diluted 21,293 21,522 21,188 21,602

Basic loss per common share

Basic income (loss) per common share

$ 0.20 $ ( 0.30 ) $ ( 0.52 ) $ ( 0.44 )

Diluted loss per common share

Diluted income (loss) per common share

$ 0.20 $ ( 0.30 ) $ ( 0.52 ) $ ( 0.44 )

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 30, 2023

NOTE 11— INCOME TAXES

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.

Income tax provision of $ 3.0 million and $ 2.9 million for the three and nine months ended September 30, 2023, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax provision rate of 36.5 % and 197.0 %, respectively.

The effective tax rate for the three months ended September 30, 2023 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 effective tax rate for the nine months ended September 30, 2023 differs from the federal statutory income tax rate of 21.0 % primarily due to 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.

Income tax provision of $ 1.8 million and $ 3.4 million for the three and nine months ended September 30, 2022, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax provision rate of 50.6 % and 245.9 %, respectively.

The effective tax rate for the three and nine months ended September 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 June 30, 2023 and June 30, 2022.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 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 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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Total net sales $ 191,669 $ 186,590 $ 483,540 $ 520,621

Income (loss) from operations

Income from operations

$ 21,480 $ 19,548 $ 39,170 $ 41,404

1 unchanged sentence

Unallocated corporate expenses ( 4,873 ) ( 9,457 ) ( 15,252 ) ( 20,232 )

Income (loss) from operations

Income from operations

$ 13,612 $ 7,590 $ 16,202 $ 11,481

3 unchanged sentences

Total depreciation and amortization $ 4,821 $ 4,598 $ 14,616 $ 14,535

September 30,

2023 December 31,

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 30, 2023

NOTE 13 — CONTINGENCIES

34 unchanged sentences

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

Government filed a complaint in United States

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

September 30, 2023

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 lodged the Consent Decree for public comment.

No comments were received during the public comment period.

On September 6, 2023, at the conclusion of the public comment period, the U.S.

Government filed a Motion to Enter the Consent Decree.

The Consent Decree will be effective once the Court grants the U.S.

Government’s Motion.

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

June 30, 2023

September 30, 2023

NOTE 14 — OTHER

Cash dividends

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

Dividends declared in the nine months ended September 30, 2023 were as follows:

Dividend per share Date declared Date of record Payment date

1 unchanged sentence

$ 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.

$ 0.0425 8/2/2023 11/1/2023 11/15/2023

During the nine months ended September 30, 2023, the Company paid dividends of $ 2.8 million.

This included payments made on February 15, 2023, May 15, 2023 and August 15, 2023 of $ 0.9 million, $ 0.9 million and $ 0.9 million to stockholders of record on February 1, 2023, May 1, 2023, and August 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 September 30, 2023, the Company reduced retained earnings for the accrual of $ 0.9 million relating to the dividend payable on November 15, 2023.

On November 7, 2023, the Board declared a quarterly dividend of 0.0425 per share of common stock payable on February 15, 2024 to stockholders of record on February 1, 2024.

Stock repurchase program

1 unchanged sentence

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

During the 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.

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

No repurchases were effected during the three months ended September 30, 2023.

As of September 30, 2023, the remaining dollar amount available for repurchases under the Board authorized plan was $ 11.1 million.

Supplemental cash flow information

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 30, 2023

Components of accumulated other comprehensive loss, net

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

Balance at beginning of period $ ( 530 ) $ 1,636 $ 923 $ 78

Change in unrealized (losses) gains

Change in unrealized gains (losses)

254 624 ( 257 ) 2,201

15 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