What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-03-12 compared with 2023-03-09 · 305 added, 307 removed, 1418 unchanged (30% of the section changed)

15 unchanged sentences

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

Projections of any evaluation of effectiveness to future

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

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

the policies or procedures may deteriorate.

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

29 unchanged sentences

Other Information

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

Election of Directors;

Appointment of Certain Officers;

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

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

Kay, Laurence Winoker, and Daniel Siegel.

The Employment Agreement Amendment for Robert B.

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

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

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

Rule 10b5-1 Trading Plans

None of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended December 31, 2023.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

27 unchanged sentences

10.11* Amended and Restated 2000 Incentive Bonus Compensation Plan, effective as of June 22, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 23, 2017)*

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

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

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

10.13* Amended and Restated 2000 Long-Term Incentive Plan, effective as of June 23, 2022 (filed as Appendix B to the Registrant's Definitive Proxy Statement on Schedule 14A, filed on April 28, 2022 and incorporated by reference herein)

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

3 unchanged sentences

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

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

and Laurence Winoker.

10.18* Fourth Amendment to the Amended and Restated Employment Agreement, dated as of March 8, 2023, by and between the Company and Laurence Winoker (incorporated by reference to Exhibit 10.

18 to the Company's A nnual R eport on Form 10- K for the year ended Decembe r 31 , 2022)

10.19* Fifth Amendment to the Amended and Restated Employment Agreement, dated as of November 8, 2023, by and between the Company and Laurence Winoker (incorporated by reference to Exhibit 10.

1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 )

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

16 unchanged sentences

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

and Daniel Siegel.

and Daniel Siegel (incorporated by reference to Exhibit 10.26 to the Company's A nnual R eport on Form 10-K for the year ended December 31, 2022)

10.28* Fourth Amendment to the Employment Agreement, dated as of November 8, 2023, by and between the Company and Daniel Siegel (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023)

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

13 unchanged sentences

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

and Robert Kay.

and Robert Kay (incorporated by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022)

10.38* Stockholders Agreement, dated as of March 2, 2018, between the Company and Taylor Parent, LLC (incorporated by reference to Exhibit 10.01 to the Company’s Current Report on Form 8-K filed March 6, 2018)

10.39* Amendment to Stockholders Agreement, dated as of October 11, 2019, between the Company and Taylor Parent, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 15, 2019)

10.40* Second Amendment, dated October 19, 2023, to that certain Stockholders Agreement, dated as of March 2, 2018, by and between Lifetime Brands, Inc.

and Taylor Parent, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 20, 2023)

10.41* Letter Agreement and Joinder, dated as of November 9, 2018, by and among the Company, Taylor Parent, LLC and Centre Capital Investors V, LP.

4 unchanged sentences

10.44* Amendment No.

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

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

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

3 unchanged sentences

(incorporated by reference to Exhibit 10.01 to the Company’s Current Report on Form 8-K filed January 3, 2023)

10.47* Amendment No.

2, dated as of November 14, 2023, by and among the Company, the other Loan Parties party thereto (as defined therein), and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 15, 2023)

10.48* Amendment No.1 to the Receivables Purchase Agreement, dated as of October 9, 2020 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser (incorporated by reference to Exhibit 10.43 to the Company's Annual Report on Form 10-K for the year ended December 31, 2020)

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

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

10.49* Amendment No.2 to the Receivables Purchase Agreement, dated as of January 6, 2023 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser (incorporated by reference to Exhibit 10.45 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022)

10.50* Amendment No.

3 to the Receivables Purchase Agreement, dated as of December 21 , 2023 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser

10.51* Amendment No.4 to the Receivables Purchase Agreement, dated as of February 23, 2024 by and among the Company, as a Seller and as a Seller Agent and initial Servicer, for itself and each of its subsidiaries thereto as a Seller, and HSBC Bank USA, National Association, as Purchaser

10.52* Amendment to Option Grant Certificates, dated as of March 8, 2023 by and among the Company and Jeffrey Siegel (incorporated by reference to Exhibit 10.4 6 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022)

21.1* Subsidiaries of the Company

3 unchanged sentences

Kay, Chief Executive Officer and Director, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification by Laurence Winoker, Senior Vice President – Finance, Treasurer and Chief Financial Officer, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2* Certification by Laurence Winoker, Executive Vice President – Finance, Treasurer and Chief Financial Officer, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1** Certification by Robert B.

Kay, Chief Executive Officer and Director, and Laurence Winoker, Senior Vice President – Finance, Treasurer and Chief Financial Officer, pursuant to 18 U.S.C.

Kay, Chief Executive Officer and Director, and Laurence Winoker, Executive Vice President – Finance, Treasurer and Chief Financial Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (**)

97.1* Compensation Recoupment Policy of Lifetime Brands, Inc.

99.1* Report of Independent Registered Accounting Firm on the consolidated financial statements of Grupo Vasconia, S.A.B.

8 unchanged sentences

Notes to exhibits:

(*) Compensatory plans in which the directors and executive officers of the Company participate.

(**) Furnished, not filed.

(*) Filed herewith.

(**) Furnished herewith.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

11 unchanged sentences

(Principal Financial and Accounting Officer)

/s/ Jeffrey Siegel Executive Chairman of the Board of Directors March 9, 2023

/s/ Jeffrey Siegel Chairman of the Board of Directors March 12, 2024

Jeffrey Siegel

1 unchanged sentence

Rachael Jarosh

/s/ John Koegel Director March 9, 2023

/s/ Cherrie Nanninga Director March 12, 2024

Cherrie Nanninga

/s/ Craig Phillips Director March 12, 2024

Craig Phillips

/s/ Veronique Gabai-Pinsky Director March 12, 2024

31 unchanged sentences

In the consolidated financial statements, the Company’s investment in Grupo Vasconia, S.A.B.

and Subsidiaries is stated at $12.5 million and $22.3 million as of December 31, 2022 and 2021, respectively, and the Company’s equity in the net (loss) income of Grupo Vasconia, S.A.B.

and Subsidiaries is stated at $1.8 million and $12.5 million as of December 31, 2023 and 2022, respectively, and the Company’s equity in (losses) earnings of Grupo Vasconia, S.A.B.

and Subsidiaries is stated at $( 5.8 ) million in 2023, $( 3.3 ) million in 2022 and $ 1.8 million in 2021.

38 unchanged sentences

At December 31, 2023, the Company’s intangible assets include goodwill in the U.S.

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

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

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

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

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

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

reportable segment with a carrying value of $42.0 million.

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

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

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

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

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

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

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

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

These assumptions are forward-looking.

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

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

How We Addressed the Matter in Our Audit

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

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

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

4 unchanged sentences

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

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

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

In order to reflect the uncertainty inherent in the projections, we inspected the sensitivity analyses performed by the Company and performed our own sensitivity analyses by increasing or decreasing the significant assumptions and evaluated the potential outcome for the U.S.

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

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

reportable segment.

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

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

42 unchanged sentences

Paid-in capital 277,728 274,579

Retained earnings

(Accumulated deficit) retained earnings

( 13,568 ) 1,145

Accumulated other comprehensive loss

13 unchanged sentences

Selling, general and administrative expenses 152,648 154,545 156,445

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

Wallace facility remediation expense 5,140 500 —

Intangible asset impairments — — 14,760

Restructuring expenses 856 1,420 —

Wallace facility remediation expense — 5,140 500

Income from operations

1 unchanged sentence

Interest expense ( 21,728 ) ( 17,205 ) ( 15,524 )

Mark to market gain (loss) on interest rate derivatives

Mark to market (loss) gain on interest rate derivatives

( 499 ) 1,971 1,062

Gain on extinguishments of debt, net 761 — —

Income before income taxes and equity in (losses) earnings

18 unchanged sentences

$ ( 8,412 ) $ ( 6,166 ) $ 20,801

Other comprehensive (loss) income, net of tax:

Other comprehensive income (loss), net of tax:

Translation adjustment 3,458 ( 4,320 ) 4,094

1 unchanged sentence

Effect of retirement benefit obligations ( 46 ) 1,170 326

Other comprehensive (loss) income, net of taxes

Other comprehensive income (loss), net of taxes

2,355 ( 2,305 ) 5,623

6 unchanged sentences

Common stock Paid-in

capital Retained earnings

capital Retained earnings (accumulated deficit)

Accumulated other comprehensive loss

3 unchanged sentences

— — — 20,801 — 20,801

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

— — — — 5,623 5,623

9 unchanged sentences

— — — ( 6,166 ) — ( 6,166 )

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

— — — — ( 2,305 ) ( 2,305 )

4 unchanged sentences

Shares effectively repurchased for required employee withholding taxes ( 93 ) ( 1 ) ( 1,066 ) — — ( 1,067 )

( 214 ) ( 2 ) ( 3,187 ) — — ( 3,189 )

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

Dividends (1)

3 unchanged sentences

— — — ( 8,412 ) — ( 8,412 )

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

— — — — 2,355 2,355

2 unchanged sentences

Stock compensation expense — — 3,690 — — 3,690

Net exercise of stock options 25 — 233 — — 233

Shares effectively repurchased for required employee withholding taxes

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Depreciation and amortization 19,571 19,536 22,520

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

Intangible asset impairments — — 14,760

Amortization of financing costs 1,968 1,809 1,739

Mark to market (gain) loss on interest rate derivatives

Mark to market loss (gain) on interest rate derivatives

499 ( 1,971 ) ( 1,062 )

Non-cash lease expense ( 1,483 ) ( 1,294 ) 2,379

Non-cash lease adjustment ( 1,889 ) ( 1,483 ) ( 1,294 )

Provision (recovery) for doubtful accounts 2,116 662 ( 5 )

3 unchanged sentences

12,665 9,467 ( 807 )

Contingent consideration fair value adjustment ( 650 ) — —

Gain on extinguishments of debt, net ( 761 ) — —

Wallace facility remediation expense — 5,140 500

Changes in operating assets and liabilities

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

Accounts receivable ( 14,972 ) 33,889 ( 5,531 )

2 unchanged sentences

Accounts payable, accrued expenses and other liabilities 10,846 ( 81,365 ) 48,079

Income taxes receivable — — 1,577

Income taxes payable 298 ( 216 ) ( 4,270 )

4 unchanged sentences

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

Acquisitions ( 17,956 ) ( 178 ) —

Acquisition — ( 17,956 ) ( 178 )

NET CASH USED IN INVESTING ACTIVITIES

3 unchanged sentences

Repayments of revolving credit facility ( 113,530 ) ( 265,662 ) ( 130,662 )

Proceeds from Term Loan 55,991 — —

Repayments of Term Loan ( 149,540 ) ( 6,216 ) ( 10,478 )

8 unchanged sentences

Effect of foreign exchange on cash 23 ( 155 ) 161

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

DECREASE IN CASH AND CASH EQUIVALENTS

( 7,409 ) ( 4,384 ) ( 7,981 )

34 unchanged sentences

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

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

Foreign currency gains and losses included within selling, general and administrative expenses were a $ 0.1 million loss in 2023, a $ 1.5 million loss in 2022, and a $ 1.3 million loss in 2021.

LIFETIME BRANDS, INC.

49 unchanged sentences

Concentrations of credit risk with respect to trade accounts receivable are limited due to the large number of entities comprising the Company’s customer base.

During the years ended December 31, 2022, 2021 and 2020, Wal-Mart Stores, Inc., including Sam’s Club and, in the U.K., Asda Superstore, (“Walmart”), accounted for 19 %, 18 % and 20 % of consolidated net sales, respectively.

During the years ended December 31, 2023, 2022 and 2021, Wal-Mart Stores, Inc., including Sam’s Club, (“Walmart”), accounted for 21 %, 19 % and 18 % of consolidated net sales, respectively.

During the years ended December 31, 2023, 2022 and 2021, sales to Costco Wholesale Corporation (“Costco”) accounted for 11 %, 13 %, and 12 % of consolidated net sales.

During the year ended December 31, 2023, 2022 and 2021, Amazon.com Inc., (“Amazon”), accounted for 11 %, 11 % and 12 % of consolidated net sales.

Sales to Walmart, Costco and Amazon are included in the Company's U.S.

Sales to Costco and Amazon are included in the Company’s U.S.

and International segments.

3 unchanged sentences

GAAP and expands disclosure requirements about fair value measurements.

Fair value measurements included in the Company’s consolidated financial statements relate to the Company’s annual goodwill and other intangible asset impairment tests and derivatives, described in NOTE 7 — GOODWILL AND INTANGIBLE ASSETS and NOTE 9 — DERIVATIVES, respectively.

Fair value measurements included in the Company’s consolidated financial statements relate to the Company’s annual goodwill and other intangible asset impairment tests that use Level 3 unobservable inputs as described in NOTE 7 — GOODWILL AND INTANGIBLE ASSETS and derivatives that use Level 2 observable inputs as described in NOTE 9 — DERIVATIVES.

Fair value of financial instruments

47 unchanged sentences

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

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

Cash-settled performance-based awards represent 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

31 unchanged sentences

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

During the year ended December 31, 2023, the Company incurred $ 0.8 million of restructuring expense in connection with the termination of the Company’s Executive Chairman as described below.

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

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

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

In 2022, the Company’s U.S.

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

segment incurred $ 0.4 million of restructuring expense in connection with the reorganization of the U.S.

segment’s sales management structure.

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

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

The transition agreement amends Mr.

The payment was made in 2023.

In 2022, the Company incurred $ 0.6 million of unallocated expense related to the termination payment with its Executive Chairman, Jeffrey Siegel.

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

The transition agreement amended Mr.

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

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

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

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

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

The employment agreement provided for a one-time payment, which was paid on April 7,

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2023

During the year ended December 31, 2020, the Company's International segment incurred $ 0.2 million of restructuring expenses related to severance associated with the strategic reorganization of the International segment’s product development and sales workforce.

The strategic reorganization was the result of the Company's efforts for product development efficiencies and an international sales approach tailored to countries.

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 and the remaining $ 0.8 million recognized in 2023.

Commitments and Contingencies

2 unchanged sentences

Adopted accounting pronouncements

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

2021-08, Business Combinations (Topic 805):

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

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

In connection with the Amendment No.1 of the Term Loan, effective December 29, 2022, the Company adopted ASU 2020-04 and 2022-06, Reference Rate Reform (Topic 848):

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

The guidance may be applied to contract modifications and hedging relationships as of any date from March 12, 2020 but no later than December 31, 2024 and should be applied on a prospective basis.

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

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

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

Effective January 1, 2023, the Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments.

This guidance introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses, to include historical experience, current conditions and reasonable and supportable forecasts.

The Company adopted this guidance on a modified retrospective basis and the adoption did not have a material impact on the Company’s consolidated financial statements.

New accounting pronouncements

Updates not listed below were assessed and either determined to not be applicable or are expected to have a minimal effect on the Company’s financial position, results of operations, and disclosures.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments.

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

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

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

The Company met the definition of a Smaller Reporting Company as of the one-time determination date of November 15, 2019.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures:

which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements.

The new guidance is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

Early adoption is permitted.

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

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures:

This guidance is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

Early adoption is permitted.

The new guidance is effective for public business entities for annual periods beginning after December 15, 2024 on a prospective basis.

Retrospective application is permitted.

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

NOTE 2 — REVENUE

6 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts.

These arrangements represent forms of variable consideration, and an estimate of sales returns are reflected as reductions in net sales in the Company’s consolidated statements of operations.

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

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

These estimates are based on historical experience and other known factors or as the most likely amount in a range of possible outcomes.

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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

28 unchanged sentences

Total purchase price $ 18,606

(1) Reflects final working capital adjustment of $21k pursuant to the terms of the Asset Purchase Agreement.

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

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

Acquisition related costs of $ 0.9 million were recorded within selling, general and administrative expenses in the consolidated statements of operations in 2022.

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

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2023

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

Purchase Price Allocation

11 unchanged sentences

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

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

A credit of $( 0.7 ) million is included in Selling, general and administrative expenses for the year ended December 31, 2023 to reflect the decrease in fair value of a contingent consideration obligation acquired by the Company in connection with its acquisition of S’well.

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

36 unchanged sentences

Total $ 5,718 $ 2,540 $ 1,299

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

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

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

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

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

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

The Company applied the guidance issued in the FASB staff Q&A - Topic 842 and Topic 840:

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

The COVID-19 related deferred rent payments as of December 31, 2020 were $ 1.0 million were deferred into fiscal year 2021.

As of December 31, 2021, all deferred payments have been paid.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

Included in machinery, furniture and equipment as of December 31, 2023 and 2022 is $ 0.2 million and $ 0.3 million, respectively, related to assets recorded under finance leases.

Included in accumulated depreciation and amortization at December 31, 2023 and December 31, 2022 is $ 0.1 million and $ 0.2 million, respectively, related to assets recorded under finance leases.

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

11 unchanged sentences

Operating leases 6.4 % 6.1 %

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

NOTE 5 — SALE OF ACCOUNTS RECEIVABLE

7 unchanged sentences

Either party may terminate the agreement at any time upon 60 days prior written notice to the other party.

Pursuant to this agreement, the Company sold $ 141.3 million and $ 150.7 million of Receivables during the years ended December 31, 2022 and 2021, respectively.

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

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

The Company did not sell receivables to HSBC during the year ended December 31, 2023.

Pursuant to this agreement, the Company sold $ 141.3 million of Receivables during the year ended December 31, 2022.

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

At December 31, 2023 and 2022, zero and $ 20.2 million, respectively, of receivables sold were outstanding and due to HSBC from customers.

At December 31, 2023, $ 28.3 million of accounts receivables were available for sale to HSBC, net of applicable charges.

NOTE 6 — EQUITY INVESTMENTS

The Company owns 24.7 % of the outstanding capital stock of Vasconia, an integrated manufacturer of aluminum products and one of Mexico’s largest housewares companies.

The Company owns 24.7 % of the outstanding capital stock of Vasconia, an integrated manufacturer of aluminum products and a housewares company in Mexico.

Shares of Vasconia’s capital stock are traded on the Bolsa Mexicana de Valores, the Mexican Stock Exchange.

6 unchanged sentences

The net loss of $ 0.3 million was included in equity in earnings, net of taxes, in the accompanying consolidated statements of operations for the year ended December 31, 2021.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

On July 29, 2021, the Company sold 2.2 million shares further reducing its ownership from approximately 27 % to 24.7 % in Vasconia for net cash proceeds of approximately $ 3.1 million, as a result the Company recorded a gain of $ 1.0 million, after decreasing the Company’s investment balance.

3 unchanged sentences

The Company continues to apply the equity method of accounting.

The Company’s equity in earnings, net of tax, for 2023, 2022 and 2021 are as follows:

Year Ended December 31,

2023 2022 2021

(in thousands)

Vasconia equity in earnings, net of taxes $ ( 5,831 ) $ ( 3,300 ) $ 1,769

Net loss on dilution in Vasconia ownership — — ( 297 )

Net loss on partial sale of Vasconia ownership, net of taxes — — ( 510 )

Impairment on investment in Vasconia ( 6,834 ) ( 6,167 ) —

Equity in (losses) earnings, net of taxes

$ ( 12,665 ) $ ( 9,467 ) $ 962

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

dollars (“USD”) using the spot rate of M XN 16.96 an d MXN 19.47 at December 31, 2023 and 2022, respectively.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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

4 unchanged sentences

20.01 - 20.74

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

The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in an increase of the investment of $ 2.0 million during the year ended December 31, 2023 and a decrease of the investment of $ 0.3 million during the year ended December 31, 2022.

These translation effects are recorded in accumulated other comprehensive loss.

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

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

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

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

Amounts due from Vasconia Prepaid expenses and other current assets $ 48 $ 80

Amounts due to Vasconia Accrued expenses and Accounts payable ( 16 ) ( 146 )

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

There was no cash dividend received during the years ended December 31, 2023 and 2022.

Amounts due to and from Vasconia are recorded in the Company’s consolidated balance sheet within prepaid expenses, other current assets, accrued expenses and accounts payable.

As of December 31, 2023 and 2022, these amounts were not material individually or in the aggregate.

Summarized income statement information for the years ended December 31, 2023, 2022 and 2021, as well as summarized balance sheet information as of December 31, 2023 and 2022, for Vasconia, calculated in accordance with U.S.

17 unchanged sentences

Non-current liabilities 13,927 236,269 95,065 1,850,568

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

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

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

The 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 downgrade in Vasconia’s debt rating, and the continued decline in the operating results of Vasconia, the Company determined the decline in fair value was other than temporary.

The Company reduced its investment by $ 6.8 million as of September 30, 2023 to its fair value, and recognized the non-cash impairment charge within Equity in (losses) earnings, net of taxes, in the consolidated statement of operations.

1 unchanged sentence

The carrying value of the Company’s investment in Vasconia, after the recorded impairment, was $ 1.8 million.

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

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

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

Foreign currency translation losses of $ 0.2 million, which were previously recorded as a component of stockholder’s equity within accumulated other comprehensive loss, were recognized in earnings upon dissolution of this subsidiary during the year ended December 31, 2020.

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

As of December 31, 2023, there is substantial doubt about Vasconia’s ability to continue as a going concern for twelve months beyond the date of the financial statements.

In the event Vasconia does not continue, the Company would be required to reduce its investment in Vasconia and recognize a loss for amounts previously recognized in accumulated other comprehensive loss.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

NOTE 7 — GOODWILL AND INTANGIBLE ASSETS

2 unchanged sentences

Gross Accumulated

Amortization Net Gross Impairment Accumulated

Amortization Net Gross Accumulated

Amortization Net

12 unchanged sentences

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

(2) The gross value and accumulated amortization at December 31, 2022 reflect a reduction of $ 44.1 million and $( 29.3 ) million, respectively, for the net $ 14.8 million impairment charge on finite-lived intangible assets within the international segment during the period ended December 31, 2021 and a $ 6.5 million reduction in gross value for previous impairment charges on finite-lived intangible assets within the U.S.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

(2) During 2023, in connection with an interim impairment test completed as of September 30, 2023, the Company determined that one trade name, that was previously estimated to contribute to cash flows indefinitely, has a definite life.

Accordingly, the trade name was reclassified from indefinite-lived intangible asset to a finite-lived intangible asset as of October 1, 2023.

The trade name is being amortized over an estimated useful life of 15 years.

(3) The gross value and accumulated amortization at December 31, 2023 and 2022 reflect a reduction of $ 44.1 million and $( 29.3 ) million, respectively, for the net $ 14.8 million impairment charge on finite-lived intangible assets within the international segment during the period ended December 31, 2021 and a $ 6.5 million reduction in gross value for previous impairment charges on finite-lived intangible assets within the U.S.

A summary of the activities related to the Company’s intangible assets for the years ended December 31, 2023, 2022 and 2021 consists of the following (in thousands):

3 unchanged sentences

Amortization ( 16,223 ) — ( 16,223 )

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

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

Goodwill and Intangible Assets, December 31, 2020 213,754 30,271 244,025

Foreign currency translation adjustment ( 364 ) — ( 364 )

Amortization ( 16,223 ) — ( 16,223 )

Impairment of finite-lived intangible assets

( 14,760 ) — ( 14,760 )

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

Acquisition of goodwill

— 2,966 2,966

Acquisition of trade name

13,000 — 13,000

Foreign currency translation adjustment ( 227 ) — ( 227 )

1 unchanged sentence

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

Foreign currency translation adjustment 81 — 81

Amortization ( 14,835 ) — ( 14,835 )

Goodwill and Intangible Assets, December 31, 2023 $ 165,896 $ 33,237 $ 199,133

The weighted-average amortization periods for the Company’s finite-lived intangible assets as of December 31, 2023 are as follows:

1 unchanged sentence

Customer relationships 14

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

Estimated amortization expense for each of the five succeeding fiscal years is as follows (in thousands):

4 unchanged sentences

For goodwill, impairment testing is based upon the best information available using a combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.

The 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.

Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are three primary drivers of the projected cash flows in the discounted cash flow fair value model.

Projected net sales and projected EBITDA were determined to be significant assumptions because they are the primary drivers of the projected cash flows in the discounted cash flow fair value model.

Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows.

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

4 unchanged sentences

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.

Projected net sales for the related brands and royalty rates were determined to be significant assumptions because they are the primary drivers of the projected cash flows in the relief from royalty model.

Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows.

International Reporting Unit

1 unchanged sentence

Reporting Unit

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

reporting unit as of September 30, 2023 , 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%.

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

4 unchanged sentences

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

Changes in any of the significant assumptions used in the valuation of the reporting unit could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

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

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

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

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

Based upon the analysis performed, the Company recognized a non-cash goodwill impairment charge of $ 19.1 million during the first quarter of 2020.

The goodwill impairment charge resulted from, among other factors, the uncertain market conditions arising from the COVID-19 pandemic, which impacted the Company's market capitalization, as well as a reduction of forecasted future cash flows associated with the effects of the COVID-19 pandemic.

The fair value of the U.S.

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

Annual indefinite-lived trade name impairment test

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

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

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

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

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

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

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

As a result of the impairment testing

Changes in any of the significant assumptions used in the valuation of the reporting unit, including projected net sales, projected EBITDA and cost of capital could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2023

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

segment were impaired.

As a result, the Company recorded a $ 1.0 million non-cash impairment charge during the first quarter of 2020.

As of December 31, 2023, the Company assessed the carrying value of goodwill and determined, based on qualitative factors, that no impairment indicators existed for goodwill.

Annual indefinite-lived trade name impairment test

The Company values its indefinite-lived trade name 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 performed an interim quantitative impairment analysis as of September 30, 2023 , of its indefinite-lived trade names by comparing the fair value of the indefinite-lived trade names to their respective carrying values.

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 %.

The Company bypassed the optional qualitative impairment analysis for its indefinite-lived trade name asset annual October 1, 2023 impairment test.

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

As of October 1, 2023, the fair value of the Company’s indefinite-lived trade name exceeded its carrying value by 7 %.

While the indefinite-lived trade name was not determined to be impaired, if the indefinite-lived trade name does not perform as projected or if market factors utilized in the impairment analysis deteriorate, including an unfavorable change in the weighted average cost of capital, could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

As of December 31, 2023, the Company assessed the carrying value of its indefinite-lived trade name and determined based on qualitative factors that no impairment existed.

Long-lived assets impairment test

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

In the fourth quarter of 2023, due to the lower than expected operating results for the International segment as a result of low consumer confidence in the region, impairment indicators were identified for the International asset group.

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

The Company tested the International segment’s long-lived assets for impairment and concluded that the fair value exceeded the carrying value of the long-lived assets, concluding no impairment as of December 31, 2023.

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

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

4 unchanged sentences

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

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

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

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

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

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

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

The ABL Agreement provides for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $ 200.0 million, which will mature on August 26, 2027.

On November 14, 2023, the Company entered into Amendment No.

2 (the “Term Loan Amendment”) to amend the Loan Agreement, dated as of March 2, 2018, among the Company, as borrower, the other loan parties from time to time party thereto, the lenders from

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (as amended, the “Term Loan”).

The Term Loan has a principal amount of $ 150.0 million, and matures on August 26, 2027.

The Term Loan requires the Company to make quarterly payments of principal each equal to 1.25 % of the aggregate principal amount of the Term Loan, commencing on March 31, 2024, with the remaining balance payable on the maturity date.

The Term Loan requires the Company to make an annual prepayment of principal, beginning with those for the fiscal year ending December 31, 2024, based upon a percentage of the Company’s excess cash flow, (“Excess Cash Flow”), if any.

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

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

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

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

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

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

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

Per the Term Loan, when the Company makes an Excess Cash Flow prepayment, the payment is first applied to satisfy the next eight (8) scheduled future quarterly required payments of the Term Loan in order of maturity and then to the remaining scheduled installments on a pro rata basis.

The maximum borrowing amount under the ABL Agreement may be increased to up to $ 250.0 million if certain conditions are met.

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 3.25 to 1.00, subject to certain limitations and for the period defined pursuant to the Term Loan but not to mature earlier than the maturity date of the then existing term loans.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

7 unchanged sentences

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

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

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

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

The Company’s borrowing capacity may be further limited by the Term Loan financial covenant of 5.00 to 1.00 maximum Total Net Leverage Ratio.

As of December 31, 2023, the availability under the ABL Agreement, limited by the Term Loan financial covenant, was $ 89.4 million.

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

1 unchanged sentence

Current portion of Term Loan facility:

Estimated Excess Cash Flow principal payment $ — $ 7,200

Term Loan facility payment $ 7,500 $ —

Estimated unamortized debt issuance costs ( 2,758 ) —

5 unchanged sentences

As of December 31, 2023, there is no Excess Cash Flow Payment due for 2024.

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

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

The Company’s Term Loan facility was reduced to $ 150.0 million at December 31, 2023 from $ 245.9 million at December 31, 2022 through the following transactions:

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

• 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.

• In connection with the Term Loan Amendment, the Company reduced its outstanding principal by a net amount of $ 48.7 million through a voluntary prepayment of principal (in accordance with the terms of the original Term Loan Agreement), net of the issuance of new proceeds and an extension of a portion of existing Term Loan.

In connection with the Term Loan Amendment that Company incurred fees of $ 9.1 million, which will be amortized over the life of the debt using the effective interest method.

The Company recognized a loss of of $ 0.7 million of unamortized debt issuance costs on the partial extinguishment for the portion of the Term Loan that was repaid.

As of December 31, 2023, the future principal payments of the Term Loan are as follows (in thousands):

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

8 unchanged sentences

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

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

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

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

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

The interest rate on outstanding borrowings under the ABL Agreement at December 31, 2023 was between 6.47 % and 6.72 %.

In addition, the Company paid a commitment fee of 0.25 % on the unused portion of the ABL Agreement during the year ended December 31, 2023.

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

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

(i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.50 % or (z) one-month Adjusted Term SOFR, but not less than 1.0 %, plus 1.0 %, plus a margin of 4.5 % or (ii) Adjusted Term SOFR (Term SOFR plus the Term SOFR Adjustment) for the applicable interest period, but not less than 1.0 %, plus a margin of 5.5 %.

The interest rate on outstanding borrowings under the Term Loan at December 31, 2023 was 11.0 %.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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

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

Under the Term Loan, the Total Net Leverage Ratio is not permitted to be greater than 5.00 to 1.00 determined as of the end of each fiscal quarters.

Further, the ABL Agreement provides that during any period (a) commencing on the last day of the most recently ended four consecutive fiscal quarters on or prior to the date availability under the ABL Agreement is less than the greater of $ 20.0 million and 10 % of the aggregate commitment under the ABL Agreement at any time and (b) ending on the day after such availability has exceeded the greater of $ 20.0 million and 10 % of the aggregate commitment under the ABL Agreement for 45 consecutive days, the Company is required to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 as of the last day of any period of four consecutive fiscal quarters.

The Company was in compliance with the covenants of the Debt Agreements at December 31, 2023.

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

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

Unamortized debt issuance costs that were written off were immaterial.

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

Other Credit Agreements

6 unchanged sentences

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

The Company designated a portion of these interest rate swaps as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings.

The hedge periods of these agreements commenced in April 2018 and expire in March 2023.

The original notional values are reduced over these periods.

The aggregate notional value was $ 25.0 million at December 31, 2022.

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

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

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 December 31, 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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

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.

8 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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

1 unchanged sentence

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

Interest rate swaps Accrued expenses — 288

Other long-term liabilities — 292

Foreign exchange contracts Prepaid expenses and other current assets 56 —

2 unchanged sentences

Interest rate swaps Other assets $ 793 $ 1,292

Interest rate swaps Other long-term liabilities — 680

The fair value of the interest rate swaps have been obtained from the counterparties to the agreements and were based on Level 2 observable inputs using proprietary models and estimates about relevant future market conditions.

3 unchanged sentences

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

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

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

Year ended December 31,

3 unchanged sentences

Total $ ( 1,057 ) $ 845 $ 1,203

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

The Company had no terminated or matured interest rate swaps during the year ended December 31, 2022.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

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 (loss) are reclassified into cost of sales as the underlying inventory purchased is sold.

During the year ended December 31, 2023, the Company reclassified $ 0.5 million of cash flow hedges in accumulated other comprehensive losses to earnings.

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

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

This comprised of a gain of $ 0.1 million related to interest rate swaps recognized in interest expense and a gain of $ 0.4 million related to foreign exchange contracts recognized in cost of sales.

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

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

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

14 unchanged sentences

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

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

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

$ 0.0425 March 8, 2023 May 1, 2023 May 15, 2023

7 unchanged sentences

During the year ended December 31, 2023, the Company repurchased 320,204 shares for a total costs of $ 2.5 million, and thereafter retired the shares.

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

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

No shares were repurchased during 2021.

As of December 31, 2023, the remaining dollar amount available for repurchases under the Board authorized plan was $ 11.1 million.

Preferred stock

7 unchanged sentences

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

On June 23, 2022, the shareholders of the Company approved an amendment and restatement of the Company’s Amended and Restated 2000 Long Term Incentive Plan (the “Plan”).

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

As of December 31, 2023, there were 624,907 shares available for the grant of awards under the Plan.

11 unchanged sentences

Exercises (1)

Cancellations ( 14,313 ) 11.09

( 236,325 ) 11.71

Expirations ( 4,000 ) 19.10

2 unchanged sentences

Exercises ( 60,000 ) 11.64

( 236,325 ) 11.71

Cancellations ( 11,375 ) 11.16

Expirations ( 13,450 ) 13.99

1 unchanged sentence

Grants 50,000 5.92

Exercises ( 60,000 ) 11.64

Cancellations ( 4,375 ) 11.27

5 unchanged sentences

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 December 31, 2023 and the exercise price.

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

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

No stock options were exercised in the year ended December 31, 2023.

The total intrinsic values of those stock options that were exercised in the year ended December 31, 2022 was $ 0.1 million and in the year ended December 31, 2021 was $ 0.8 million.

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

48 unchanged sentences

Grants 123,000 12.19

Achieved performance over target (2)

Vested ( 166,935 ) 9.20

1 unchanged sentence

Non-vested performance-based awards, December 31, 2022 400,302 11.56

123,000 12.19

Grants 191,075 5.92

Achieved performance over target (3)

5 unchanged sentences

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

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

No compensation expense was recorded in 2022.

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

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

(3) 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.

(4) The performance metrics for the performance-based awards granted in 2022 are not probable of achievement.

No compensation expense was recorded in 2022 or in 2023.

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

4 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

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

3 unchanged sentences

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

85,776 $ 7.59

Cancellations ( 2,165 ) 6.52

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

Total unrecognized compensation expense remaining (in thousands) (2)

2 unchanged sentences

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

No compensation expense was recorded in 2022.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

No compensation expense was recorded in 2022 or in 2023.

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

48 unchanged sentences

$ 6,222 $ 5,728 $ 16,541

On March 27, 2020, H.R.

748, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into legislation which includes business tax provisions that impact taxes related to 2018, 2019 and 2020.

Some of the significant tax law changes in accordance with the CARES Act are to increase the limitation on deductible business interest expense for 2019 and 2020, allow for the five-year carryback of net operating losses for 2018-2020, suspend the 80% limitation of taxable income for net operating loss carryforwards for 2018-2020, and accelerate the ability to claim refunds of Alternative Minimum Tax (“AMT”) credit carryforwards.

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

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

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

tax purposes effective for tax years beginning after December 31, 2021.

The mandatory capitalization requirement increases the Company’s deferred tax assets and income tax payable.

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

Significant components of the Company’s deferred

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2023

from the various CARES Act provisions claimed by the Company.

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

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

tax purposes effective January 1, 2022.

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

Significant components of the Company’s deferred income tax assets and (liabilities) are as follows:

income tax assets and (liabilities) are as follows:

(in thousands)

25 unchanged sentences

The state net operating losses begin to expire in 2026.

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2022

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

6 unchanged sentences

Foreign withholding tax 5.0 6.1 1.2

Impairment of goodwill — — 65.5

Non-deductible expenses 7.9 7.1 3.3

2 unchanged sentences

Federal return to provision 0.7 ( 3.4 ) ( 0.4 )

Loss of Filament pre-acquisition attributes due to CARES Act — — 8.6

Equity-based compensation 5.0 0.1 ( 0.6 )

1 unchanged sentence

Provision for income taxes 59.4 % 63.4 % 45.5 %

LIFETIME BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

The estimated values of the Company’s gross uncertain tax positions at December 31, 2023, 2022 and 2021 consist of the following:

15 unchanged sentences

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

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

At December 31, 2023, the periods subject to examination by the Company’s major state jurisdictions, except for New York State (which has been audited through 2019), are generally for the years ended 2019 through 2022.

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

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

As of December 31, 2023, there are no material assessments in any given year.

35 unchanged sentences

Total capital expenditures $ 2,801 $ 2,975 $ 3,986

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

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

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

segment and $ 0.4 million for the International segment.

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

segment and $ 0.4 million for the International segment, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES.

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

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

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

In 2023 and 2022, the Company recognized $ 0.8 million and $ 0.6 million, respectively, of restructuring expenses within unallocated corporate expenses, as described in NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES.

(in thousands)

21 unchanged sentences

NOTE 14 — COMMITMENTS AND CONTINGENCIES

The Company has license agreements that require the payment of royalties on sales of licensed products which expire through 2048.

The estimated f uture minimum royalties payable under these agreements are as follows (in thousands):

The Company has license agreements that require the payment of minimum royalties on sales of licensed products.

The estimated future minimum royalties payable under the noncancellable term of these agreements are as follows (in thousands):

Year ending December 31,

Thereafter 2,806

Total $ 8,266

10 unchanged sentences

PRIDCO agreed to such access, and the Company consented.

The EPA conducted a further investigation

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

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

While WSPR did not cause the sub-surface condition that resulted in the potential for vapor intrusion, in order to protect the health of its employees and continue its business operations, it has nevertheless implemented corrective action measures to prevent vapor intrusion, such as sealing the floors of the building and conducting periodic air monitoring to address potential exposure.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2023

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

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

On August 13, 2015, the EPA released its remedial investigation and feasibility study (“RI/FS”) for the Site.

On December 11, 2015, the EPA issued the Record of Decision (“ROD”) for an initial operable unit, electing to implement its preferred remedy which consists of soil vapor extraction and dual-phase extraction/in-situ treatment.

On December 11, 2015, the EPA issued the Record of Decision (“ROD”) for an initial operable unit (“OU-1”), electing to implement its preferred remedy, which consists of soil vapor extraction and dual-phase extraction/in-situ treatment.

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

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

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

In February 2017, the EPA indicated that it planned to expand its field investigation for the RI/FS to a second operable unit (“OU-2”) to determine the nature and extent of the groundwater contamination at and from the Site and to determine the nature of the remedial action needed to address the contamination.

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

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

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

WSPR never used the primary contaminant of concern and did not take up its tenancy at the Site until after the EPA had discovered the contamination in the local water supply.

The EPA has also issued notices of potential liability to a number of other entities affiliated with the Site, which used the contaminants of concern.

In December 2018, the Company, WSPR, and other identified potentially responsible parties affiliated with the Site entered into tolling agreements to extend the statute of limitations for potential claims for the recovery of response costs for the initial operable unit under Section 107 of CERCLA.

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

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

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

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

In December 2018, the Company, WSPR, and other identified potentially responsible parties affiliated with the Site entered into tolling agreements with the U.S.

government to extend the statute of limitations for potential claims for the recovery of response costs for the initial operable unit under Section 107 of CERCLA.

The tolling agreements have been extended multiple times and currently expire in November 2025.

The tolling agreements do not constitute in any way an admission or acknowledgment of any fact, conclusion of law, or liability by the parties to the agreements.

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

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

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

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

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

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

The EPA released its proposed plan for OU-2 in July 2019, and on September 30, 2019, the EPA issued the ROD for OU-2.

The EPA elected to implement its preferred remedy consisting of in-situ treatment of groundwater and a monitored natural attenuation program including monitoring of the plume fringe at the Site.

The EPA’s estimated total net present worth cost for its selected remedy for OU-2 is $ 17.3 million, and the EPA is currently leading remediation of OU-2.

In August 2021, WSPR received a Notice of Liability for the Site from the Department of Justice on behalf of the EPA, and in September 2021, WSPR responded with a good faith offer to conduct additional testing and remedial design work for OU-1.

WSPR has actively participated in negotiations among the U.S.

Government (the Department of Justice and the EPA) and other potentially responsible parties with respect to the remedial work at OU-1, which negotiations culminated in the finalization of a Consent Decree for Remedial Design and Remedial Action at Operable Unit One of the San German Groundwater Contamination Site (“Consent Decree”).

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.

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, which the court granted on December 1, 2023, thereby effectuating 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.

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

In the event of one or more adverse determinations, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

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

In the event of one or more adverse determinations related to this matter, it is possible that the ultimate liability resulting from this matter and the impact on the Company’s results of operations could be material.

Customs and Border Protection Matter

6 unchanged sentences

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

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

Based on this decision, no additional duties will be owed for the seven tableware collections imported in this shipment.

LIFETIME BRANDS, INC.

1 unchanged sentence

December 31, 2023

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

Based on this decision, no additional duties will be owed for the seven tableware collections imported in this shipment.

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

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

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

the other two remain pending.

56 unchanged sentences

Customer allowances and rebates $ 29,162 $ 31,281

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

Compensation and benefits 12,434 9,789

1 unchanged sentence

Freight 5,627 6,869

Professional fees 2,743 2,954

Wallace facility remediation 5,640 500

Royalties 5,104 2,408

Professional fees 2,284 2,743

Interest 1,740 136

Commissions 622 656

Other non-income tax liabilities 555 10,054

Restructuring — 986

Wallace facility remediation 500 —

Interest 136 402

Other 4,684 5,250

1 unchanged sentence

Other long-term liabilities

Other l ong-term liabilities consist of:

Other long-term liabilities consist of:

(in thousands)

4 unchanged sentences

Contingent consideration — 650

Derivative financial instruments — 972

Other long-term obligations 110 100

6 unchanged sentences

Cash paid for taxes, net of refunds 8,054 9,757 19,012

Non-cash investing activities:

Non-cash investing and financing activities:

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

13 unchanged sentences

Balance at end of year $ ( 32,614 ) $ ( 36,072 ) $ ( 31,752 )

Accumulated deferred gains (losses) on cash flow hedges:

Accumulated deferred (losses) gains on cash flow hedges:

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

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

Change in unrealized (losses) gains

( 527 ) 2,126 ( 311 )

Amounts reclassified from accumulated other comprehensive loss:

5 unchanged sentences

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

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

Net (loss) income arising from retirement benefit obligations, net of tax of $ 31 , $( 359 ) and $( 64 )

( 93 ) 1,054 191

36 unchanged sentences

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

What changed 10-K

Item 9A. Controls and Procedures