What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 250 added, 373 removed, 579 unchanged (52% of the section changed)

3 unchanged sentences

(in thousands, except share data)

September 30,

2025 December 31,

1 unchanged sentence

Cash and cash equivalents $ 10,375 $ 2,929

Accounts receivable, less allowances of $ 13,237 at September 30, 2024 and $ 15,952 at December 31, 2023

Accounts receivable, less allowances of $ 13,861 at March 31, 2025 and $ 14,093 at December 31, 2024

105,710 156,743

1 unchanged sentence

Prepaid expenses and other current assets 14,467 11,488

Income taxes receivable 2,894 —

TOTAL CURRENT ASSETS 340,605 373,568

1 unchanged sentence

OPERATING LEASE RIGHT-OF-USE ASSETS 56,914 59,571

INVESTMENT — 1,826

INTANGIBLE ASSETS, net 179,197 183,527

20 unchanged sentences

Common stock, $ 0.01 par value, shares authorized:

50,000,000 at September 30, 2024 and December 31, 2023;

50,000,000 at March 31, 2025 and December 31, 2024;

shares issued and outstanding:

22,157,361 at September 30, 2024 and 21,813,266 at December 31, 2023

22,414,005 at March 31, 2025 and 22,155,735 at December 31, 2024

Paid-in capital 281,211 280,566

10 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net sales $ 140,085 $ 142,242

3 unchanged sentences

Selling, general and administrative expenses 31,468 39,536

Restructuring expenses — — — 856

Income from operations

8,613 13,612 11,610 16,202

Interest expense ( 4,915 ) ( 5,614 )

1 unchanged sentence

( 527 ) ( 174 )

Gain on extinguishments of debt, net — — — 1,520

Loss on equity securities — — ( 14,152 ) —

Income (loss) before income taxes and equity in losses

1,851 8,268 ( 20,331 ) 1,477

Income tax provision

Loss before income taxes and equity in losses

( 4,343 ) ( 3,958 )

Income tax benefit (provision)

Equity in losses, net of taxes

$ ( 4,201 ) $ ( 6,260 )

NET INCOME (LOSS)

$ 344 $ 4,206 $ ( 24,083 ) $ ( 11,119 )

BASIC INCOME (LOSS) PER COMMON SHARE

BASIC LOSS PER COMMON SHARE

$ ( 0.19 ) $ ( 0.29 )

DILUTED INCOME (LOSS) PER COMMON SHARE

DILUTED LOSS PER COMMON SHARE

$ ( 0.19 ) $ ( 0.29 )

1 unchanged sentence

LIFETIME BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

Three Months Ended

September 30, Nine Months Ended

September 30,

$ ( 4,201 ) $ ( 6,260 )

Net income (loss)

$ 344 $ 4,206 $ ( 24,083 ) $ ( 11,119 )

Other comprehensive income (loss), net of taxes:

Other comprehensive income, net of taxes:

Net change in translation adjustment 417 40

1 unchanged sentence

Effect of retirement benefit obligations 4 13

Other comprehensive income (loss), net of taxes

682 ( 795 ) 15,175 573

Comprehensive income (loss)

Other comprehensive income, net of taxes

Comprehensive loss

$ ( 3,909 ) $ ( 6,006 )

13 unchanged sentences

— — — — 292 292

Performance shares issued to employees 152 2 ( 2 ) — — —

Net issuance of restricted shares granted to employees 338 3 ( 3 ) — — —

5 unchanged sentences

22,414 $ 224 $ 281,211 $ ( 37,736 ) $ ( 18,023 ) $ 225,676

— — — ( 18,167 ) — ( 18,167 )

Other comprehensive income, net of taxes

— — — — 14,239 14,239

Net issuance of restricted shares granted to employees and directors 92 1 ( 1 ) — — —

Stock compensation expense — — 1,044 — — 1,044

Shares effectively repurchased for required employee withholding taxes ( 7 ) — ( 55 ) — — ( 55 )

Dividends (1)

— — — ( 957 ) — ( 957 )

BALANCE AT JUNE 30, 2024

22,158 $ 222 $ 278,484 $ ( 39,895 ) $ ( 19,006 ) $ 219,805

— — — 344 — 344

Other comprehensive income, net of taxes

— — — — 682 682

Net issuance of restricted shares granted to employees

( 1 ) — — — — —

Stock compensation expense — — 1,046 — — 1,046

Dividends (1)

— — — ( 959 ) — ( 959 )

BALANCE AT SEPTEMBER 30, 2024

22,157 $ 222 $ 279,530 $ ( 40,510 ) $ ( 18,324 ) $ 220,918

(1) Cash dividends declared per share of common stock were $ 0.1275 and $ 0.1275 in the nine months ended September 30, 2024 and 2023, respectively.

Common stock Paid-in

capital Retained earnings (accumulated deficit)

capital Accumulated deficit

Accumulated other

10 unchanged sentences

Shares effectively repurchased for required employee withholding taxes ( 105 ) ( 1 ) ( 1,027 ) — — ( 1,028 )

Stock repurchase ( 320 ) ( 3 ) — ( 2,536 ) — ( 2,539 )

Dividends (1)

2 unchanged sentences

22,073 $ 221 $ 277,496 $ ( 20,771 ) $ ( 33,245 ) $ 223,701

— — — ( 6,520 ) — ( 6,520 )

Other comprehensive income, net of taxes

— — — — 948 948

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

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

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

Dividends (1)

— — — ( 950 ) — ( 950 )

BALANCE AT JUNE 30, 2023

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

— — — 4,206 — 4,206

Other comprehensive loss, net of taxes

— — — — ( 795 ) ( 795 )

Stock compensation expense — — 898 — — 898

Dividends (1)

— — — ( 943 ) — ( 943 )

BALANCE AT SEPTEMBER 30, 2023

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

(1) Cash dividends declared per share of common stock were $ 0.1275 and $ 0.1275 in the nine months ended September 30, 2024 and 2023, respectively.

(1) Cash dividends declared per share of common stock were $ 0.0425 and $ 0.0425 in the three months ended March 31, 2025 and 2024, respectively.

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands) (unaudited)

Nine Months Ended

September 30,

Three Months Ended

OPERATING ACTIVITIES

$ ( 4,201 ) $ ( 6,260 )

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

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

Depreciation and amortization 5,698 4,939

3 unchanged sentences

( 556 ) ( 455 )

(Recovery) provision for doubtful accounts

( 241 ) 2,193

Deferred income taxes 144 5

Provision for doubtful accounts

Stock compensation expense 1,062 807

Equity in losses, net of taxes

Contingent consideration fair value adjustments — ( 50 )

Gain on extinguishments of debt, net

Loss on equity securities 14,152 —

Changes in operating assets and liabilities

3 unchanged sentences

Accounts payable, accrued expenses and other liabilities ( 28,038 ) ( 34,359 )

Income taxes receivable ( 2,894 ) ( 1,254 )

Income taxes payable ( 352 ) ( 71 )

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

NET CASH PROVIDED BY OPERATING ACTIVITIES

16,711 10,513

7 unchanged sentences

Repayments of term loan ( 1,875 ) —

Payment of financing costs — ( 433 )

Payments for finance lease obligations ( 11 ) ( 7 )

Payments of tax withholding for stock based compensation ( 416 ) ( 1,028 )

Payments for stock repurchase — ( 2,539 )

Cash dividends paid ( 996 ) ( 1,026 )

2 unchanged sentences

Effect of foreign exchange on cash 75 ( 64 )

DECREASE IN CASH AND CASH EQUIVALENTS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

7,446 ( 11,550 )

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

2 unchanged sentences

(“the Company”) designs, sources and sells branded kitchenware, tableware and other products used in the home and markets its products under a number of widely-recognized brand names and trademarks, which are either owned or licensed by the Company or through retailers’ private labels and their licensed brands.

The Company’s products, which are targeted primarily towards consumers purchasing moderately priced kitchenware, tableware and housewares, are sold through virtually every major level of trade.

The Company’s products, which are targeted primarily towards consumers purchasing moderately priced kitchenware, tableware and housewares, are sold through nearly every major level of trade.

The Company generally markets several lines within each of its product categories under more than one brand.

9 unchanged sentences

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

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

1 unchanged sentence

In anticipation of the pre-holiday shipping season, inventory levels increase primarily in the June through October time period.

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

The increase in inventory levels at March 31, 2025 compared to December 31, 2024 was due to preemptive measures taken in anticipation of, and designed to mitigate, the impact of the tariffs that went into effective in April 2025.

The Company’s current estimates contemplate current and expected future conditions, as applicable;

however it is reasonably possible that actual conditions could differ from expectations, which could materially affect the Company’s results of operations and financial position.

Revenue recognition

6 unchanged sentences

Cost of sales

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

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

Distribution expenses

Distribution expenses consist primarily of warehousing expenses and freight-out expenses.

Handling costs of products sold are included in cost of sales.

Accounts receivable

2 unchanged sentences

The Company also maintains an allowance for anticipated customer deductions.

The allowances for deductions are primarily based on contracts with customers.

However, in certain cases, the Company does not have a formal contract and, therefore, customer deductions are non-contractual.

To evaluate the reasonableness of non-contractual customer deductions, the Company analyzes currently available information and historical trends of deductions.

Contractual deductions for incentives and promotions granted to customers such as cooperative advertising, are recorded as a reduction to accounts receivable at the time of sale.

These deductions are primarily fixed amounts;

however, in certain cases, these deductions are not fixed and, therefore, the allowance is estimated based on currently available information and historical trends of deductions.

Receivable purchase agreement

1 unchanged sentence

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

The Company did not sell receivables to HSBC during the three and nine months ended September 30, 2024 and September 30, 2023.

At September 30, 2024, $ 18.0 million of accounts receivables were available for sale to HSBC, net of applicable charges.

The Company did not sell receivables to HSBC during the three months ended March 31, 2025 and March 31, 2024.

At March 31, 2025, $ 16.0 million of accounts receivables were available for sale to HSBC, net of applicable charges.

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

5 unchanged sentences

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

September 30,

2025 December 31, 2024

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

Fair value of financial instruments

3 unchanged sentences

ASC 815 requires that all derivative instruments be recognized on the balance sheet at fair value as either an asset or liability.

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

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

Changes in the fair value of derivatives that qualify as hedges and have been designated as part of a hedging relationship for accounting purposes are included in accumulated other comprehensive loss and are subsequently recognized in the Company’s unaudited condensed consolidated statements of operations in the same period that the hedged items are recognized in earnings.

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

Goodwill, intangible assets and long-lived assets

Goodwill and intangible assets deemed to have indefinite lives are not amortized but, instead, are subject to an annual impairment assessment.

Additionally, if events or conditions were to indicate the carrying value of a reporting unit may not be recoverable, the Company would evaluate goodwill and other intangible assets for impairment at that time.

Goodwill is not amortized but, instead, subject to an annual impairment assessment on October 1 or more frequently if events or conditions were to indicate the carrying value of a reporting unit may not be recoverable.

As it relates to the goodwill assessment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment testing described in the Financial Accounting Standards Board's (“FASB”) ASC Topic 350, Intangibles – Goodwill and Other.

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

If, after assessing qualitative factors, the Company determines that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then no further testing is performed for that reporting unit.

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

The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of October 1 or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values.

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

7 unchanged sentences

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.

The calculation of cost of capital includes a number of subjective inputs, including a company-specific risk premium to capture the perceived risks associated with the reporting unit’s projected cash flows used in the discounted cash flow method.

Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies.

From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit.

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

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

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

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

The 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.

The Company completed the quantitative impairment analysis for its indefinite-lived asset as of October 1, 2023, by comparing the fair value of the indefinite-lived trade name to the 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.

March 31, 2025

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

2 unchanged sentences

If the carrying amount of the asset is not recoverable, the impairment to be recognized is measured by the amount by which the carrying amount of each long-lived asset exceeds the fair value of the asset.

The Company purchases almost all of its product from third-party manufacturers outside the U.S., primarily in China.

This concentration in suppliers exposes the Company to risks associated with doing business globally, including risks relating to the tariffs recently implemented and that may be implemented in the future.

As of April 9, 2025, the U.S.

has imposed an aggregate 145% tariff on imports from China.

Other recent tariff policy updates that went into effect in April 2025 include a 10% universal tariff for all countries and reciprocal tariffs for specific countries, which have been paused for 90 days.

As the Company sources almost all of its products from suppliers located outside the United States, primarily in China, any new or increased tariffs, quotas, embargoes, or other trade barriers could impact our supply chain and cost structure.

Additionally, retaliatory measures by affected countries, could further disrupt operations or reduce our competitiveness in international markets.

The Company continues to monitor these changing tariffs and trade restrictions.

The Company is developing a plan to mitigate the impact of the increase price of goods imported by the Company into the U.S.

The Company may seek to increase prices to its customers, negotiate product costs with its suppliers and further diversify its imports to countries that are expected to be subject to lower tariffs.

To the extent the tariffs remain in place and the Company cannot mitigate the impact of the increase on the price of goods imported by the Company into the U.S., it may result in lower gross margin that the Company realizes from the sale of its products which could materially adversely affect the Company’s results of operations and financial condition and result in an impairment of our long-lived assets, including goodwill within the U.S.

segment reporting unit.

See NOTE 5 — INTANGIBLE ASSETS to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

8 unchanged sentences

Certain leases may include options to extend or terminate the lease.

Periods to extend the lease are included in the lease term when the Company is reasonably certain that the extension option would be exercised, and the associated lease payments for such periods are reflected in the ROU asset and lease liability.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

2 unchanged sentences

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

Employee healthcare

The Company self-insures certain portions of its health insurance plan.

The Company maintains an accrual for estimated unpaid claims and claims incurred but not yet reported (“IBNR”).

Although management believes that it uses the best information available to estimate IBNR claims, actual claims may vary significantly from estimated claims.

Restructuring expenses

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

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

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

During the nine months ended September 30, 2023, the Company incurred $ 0.8 million of unallocated corporate expense related to the termination payment with its former Executive Chairman, Jeffrey Siegel (the “Executive Chairman”).

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

The employment agreement provided for a one-time payment, which was paid on April 7, 2023.

March 31, 2025

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 November 2023, the FASB issued Accounting Standards Update No.

(“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.

The adoption requires additional disclosures, but is not expected to have a material impact on the Company's consolidated financial statements.

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

19 unchanged sentences

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

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 0.9 million and $ 2.2 million for the three and nine months ended September 30, 2024, respectively and $ 0.8 million and $ 1.7 million for the three and nine months ended September 30, 2023, respectively.

Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $ 0.7 million and $ 0.6 million for the three months ended March 31, 2025 and 2024, respectively.

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

3 unchanged sentences

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.

On a quarterly

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

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

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.

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 sale s.

2 unchanged sentences

Incidental items that are immaterial in the context of the contract are expensed as incurred.

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three months ended March 31, 2025 and 2024 (in thousands):

Three Months Ended

Kitchenware $ 79,521 $ 83,530

10 unchanged sentences

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

The components of lease expense for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

Operating lease expenses (1) :

3 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

Supplemental cash flow information for lease related liabilities and assets for the nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Nine Months Ended

September 30,

Supplemental cash flow information for lease related liabilities and assets for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three Months Ended

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

Operating cash flows for operating leases $ 4,814 $ 4,718

Nine Months Ended

September 30,

Three Months Ended

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

Operating leases $ — $ —

The aggregate future lease payments for operating leases as of September 30, 2024 were as follows (in thousands):

2024 (excluding the nine months ended September 30, 2024)

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

The aggregate future lease payments for operating leases as of March 31, 2025 were as follows (in thousands):

2025 (excluding the three months ended March 31, 2025)

Thereafter 8,953

3 unchanged sentences

Average lease terms and discount rates were as follows:

September 30, 2024

March 31, 2025

Operating leases:

1 unchanged sentence

Weighted-average discount rate 6.6 %

On January 23, 2025, the Company entered into a lease agreement for a new distribution center in Hagerstown, Maryland

(“Hagerstown Facility”).

The term of the lease is 180 months following the rent commencement date, which will occur in the first quarter of 2026.

Base rent for the first year of the lease is $ 7.3 million, escalating by 3 % annually.

A portion of the base rent will be abated for the first 36 months at the annual prevailing rate for a total rent abatement of $ 7.2 million.

The lease agreement also includes a total tenant improvement allowance of $ 5.1 million.

NOTE 4 — INVESTMENT

As of September 30, 2024, the Company owned 24.7 % of the outstanding capital stock of Grupo Vasconia S.A.B.

As of March 31, 2025, the Company has a 24.7 % interest in Grupo Vasconia S.A.B.

(“Vasconia”), an integrated manufacturer of aluminum products and a housewares company in Mexico.

5 unchanged sentences

Investments — Equity Securities , with any changes in fair value recorded within income (loss) on equity securities on the consolidated statements of operations.

As a result of the loss of significant influence, the accumulated other comprehensive losses previously recognized under the equity method of accounting were reclassified to the carrying value of the Vasconia investment and subsequently resulted in a non-cash loss of

The fair value of the Vasconia investment was not material as of March 31, 2025.

Given Vasconia's limited trading activity, recent operating results of Vasconia and impact of the bankruptcy related activity, the fair value of the Vasconia investment was measured using the income approach based on Level 3 unobservable inputs.

Prior to accounting for the investment in Vasconia at fair value, equity in losses, net of taxes recognized for the three months ended March 31, 2024 was $ 2.1 million.

On March 13, 2025, the Company and Vasconia entered into Amendment No.

6 of the Shares Subscription Agreement, which among other items, terminated the Company’s rights to designate individuals to be nominated as members of the Vasconia board of directors.

The Company did not have any designated members nominated to the Vasconia board of directors as of the date of the amendment.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

$ 14.2 million to reduce the investment to its fair value during the three months ended June 30, 2024.

The fair value of the Vasconia investment was not material as of September 30, 2024.

Prior to accounting for the investment in Vasconia at fair value, equity in losses, net of taxes recognized for the nine months ended September 30, 2024 and the three and nine months ended September 30, 2023, included the following:

Three Months Ended

September 30, Nine Months Ended

September 30,

Vasconia equity in losses, net of taxes

$ — $ ( 707 ) $ ( 2,092 ) $ ( 2,853 )

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

Equity in losses, net of taxes

$ — $ ( 1,047 ) $ ( 2,092 ) $ ( 9,687 )

March 31, 2025

NOTE 5 — INTANGIBLE ASSETS

Intangible assets consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024 December 31, 2023

Intangible assets consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

March 31, 2025 December 31, 2024

Gross Accumulated

2 unchanged sentences

$ 33,237 $ — $ 33,237 $ 33,237 $ — $ 33,237

Indefinite-lived intangible asset:

Trade name (1)

42,000 — 42,000 42,000 — 42,000

Finite-lived intangible assets:

1 unchanged sentence

Trade names 104,528 ( 30,325 ) 74,203 104,459 ( 28,619 ) 75,840

62,605 ( 27,008 ) 35,597 62,493 ( 23,862 ) 38,631

Customer relationships 143,158 ( 75,966 ) 67,192 143,157 ( 73,505 ) 69,652

143,159 ( 71,046 ) 72,113 143,158 ( 63,630 ) 79,528

5,892 ( 4,258 ) 1,634 5,872 ( 3,872 ) 2,000

Other 5,879 ( 4,481 ) 1,398 5,868 ( 4,351 ) 1,517

Total $ 302,649 $ ( 123,452 ) $ 179,197 $ 302,568 $ ( 119,041 ) $ 183,527

(1) The gross and net value at September 30, 2024 and December 31, 2023 reflect a reduction of $ 91.7 million in impairment charges on goodwill and $ 1.0 million impairment charge on the indefinite-lived intangible asset.

(2) The gross value and accumulated amortization at September 30, 2024 and December 31, 2023 reflect a reduction of $ 44.1 million and $( 29.3 ) million, respectively, for the net $ 14.8 million previous impairment charge on finite-lived intangible assets within the international segment and a $ 6.5 million reduction in gross value for previous impairment charges on finite-lived intangible assets within the U.S.

(1) The gross and net value at March 31, 2025 and December 31, 2024 reflect a reduction of $ 79.8 million impairment charges within U.S.

segment and $ 11.9 million impairment charges within International segment.

NOTE 6 — DEBT

5 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

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 quarterly payments of principal each equal to 1.25 % of the aggregate principal amount of the Term Loan, which commenced 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.

5 unchanged sentences

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.

As of September 30, 2024 and December 31, 2023, the total availability under the ABL Agreement were as follows (in thousands):

September 30, 2024

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

As of March 31, 2025 and December 31, 2024, the total availability under the ABL Agreement were as follows (in thousands):

March 31, 2025

December 31, 2024

8 unchanged sentences

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 September 30, 2024, the availability under the ABL Agreement, limited by the Term Loan financial covenant, was $ 51.6 million.

As of March 31, 2025, the availability under the ABL Agreement, limited by the Term Loan financial covenant, was $ 63.2 million.

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Current portion of Term Loan:

Term Loan payment $ 7,500 $ 7,500

Estimated Excess Cash Flow principal payment 2,000 —

Estimated unamortized debt issuance costs ( 2,574 ) ( 2,609 )

4 unchanged sentences

Total Non-current portion of Term Loan $ 129,707 $ 130,949

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

The estimated Excess Cash Flow principal payment recorded at September 30, 2024 represents the Company’s estimate for the Excess Cash Flow Payment due in 2025.

There was no Excess Cash Flow payment due in 2024.

The 2024 excess cash flow payment of $ 1.2 million was paid on April 4, 2025 and reduces the scheduled quarterly payment due on June 30, 2025.

As of March 31, 2025, the Company estimates no excess cash flow payment will be due for 2025.

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

5 unchanged sentences

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

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

3 unchanged sentences

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

The interest rate on outstanding borrowings under the ABL Agreement at September 30, 2024 was between 4.79 % and 6.68 %.

The Company paid a commitment fee of 0.25 % on the unused portion of the ABL Agreement during the nine months ended September 30, 2024.

The interest rate on outstanding borrowings under the ABL Agreement at March 31, 2025 was between 3.79 % and 5.86 %.

The Company paid a commitment fee of 0.25 % on the unused portion of the ABL Agreement during the three months ended March 31, 2025.

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

(i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.5 % or (z) one-month Adjusted Term SOFR, but not less than 1.0 %, plus 1.0 %, plus a margin of 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 September 30, 2024 was 10.73 %.

The interest rate on outstanding borrowings under the Term Loan at March 31, 2025 was 9.94 %.

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

2 unchanged sentences

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 September 30, 2024.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

off and fees of $ 0.4 million were incurred.

The gain on the early retirement of the Term Loan of $ 1.5 million, net of fees and expenses, was recognized during the three and nine months ended September 30, 2023.

The Company was in compliance with the covenants of the Debt Agreements at March 31, 2025.

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 .

NOTE 7 — DERIVATIVES

The Company’s risk management strategy includes the use derivative financial instruments to manage its exposure to interest rate movements and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates primarily to offset the earnings impact related to inventory purchases.

The Company does not enter into derivative transactions for trading purposes.

The Company classifies cash flows from its derivative transactions as cash flows from operating activities in the consolidated statements of cash flows.

The Company’s derivatives expose it to credit risks from possible non-performance by counterparties.

The Company has limited its credit risk by entering into derivative transactions exclusively with investment-grade rated financial institutions and monitors the creditworthiness of these financial institutions on an ongoing basis.

The Company utilizes standard counterparty master netting agreements that net certain foreign currency and interest rate swap transactions in the event of the insolvency of one of the parties to the transaction.

These master netting arrangements permit the Company to net amounts due from the Company to counterparty with amounts due to the Company from the same counterparty.

Although all of the Company’s recognized derivative assets and liabilities are subject to enforceable master netting arrangements, the Company has elected to present these assets and liabilities on a gross basis.

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

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Interest Rate Swap Agreements

In June 2019 the Company entered into interest rate swap agreements, with an aggregate notional value of $ 25.0 million and expire in February 2025.

In March 2024, the Company entered into a new interest rate swap agreement, with an aggregate notional value of $ 25.0 million and expire in August 2027.

To manage its exposures to interest rate movements, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

These interest rate swaps involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

In March 2024 and October 2024, the Company entered into interest rate swap agreements, each with an aggregate notional value of $ 25.0 million and expire in August 2027.

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.

The Company’s total outstanding notional value of interest rate swaps was $ 50.0 million at September 30, 2024.

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 September 30, 2024.

The Company’s total outstanding notional value of interest rate swaps was $ 50.0 million at March 31, 2025.

Foreign Exchange Contracts

The Company is party from time to time to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases denominated in foreign currencies.

Fluctuations in the value of certain foreign currencies as compared to the USD may positively or negatively affect the Company’s revenues, gross margins, operating expenses, and retained earnings, all of which are expressed in USD.

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

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

The Company does not hedge the translation of foreign currency profits into USD, as the Company regards this as an accounting exposure rather than an economic exposure.

The aggregate gross notional value of foreign exchange contracts at September 30, 2024 was $ 2.8 million.

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

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

The Company attempts to minimize these risks primarily by using foreign currency forward contracts and by maintaining counterparty credit limits.

These hedging activities provide only limited protection against currency exchange and credit risk.

Factors that could influence the effectiveness of the Company’s hedging programs include those impacting currency markets and the availability of hedging instruments and liquidity of the credit markets.

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

The Company does not enter into such contracts for speculative purposes, and as of September 30, 2024, these foreign exchange contracts have been designated as hedges in to order to apply hedge accounting.

To reduce the impact of changes in foreign currency exchange rates on its results, from time to time the Company is a party to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases.

The Company designates these contracts for accounting purposes as cash flow hedges.

The Company purchases foreign currency forward contracts with terms less than 18 months.

The aggregate gross notional value of foreign exchange contracts at March 31, 2025 was $ 9.3 million.

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

Derivatives designated as hedging instruments Balance Sheet Location September 30, 2024 December 31, 2023

Derivatives designated as hedging instruments Balance Sheet Location March 31, 2025 December 31, 2024

Foreign exchange contracts Prepaid expenses and other current assets $ 20 $ 256

Accrued expenses 13 —

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

Derivatives not designated as hedging instruments Balance Sheet Location September 30, 2024 December 31, 2023

Derivatives not designated as hedging instruments Balance Sheet Location March 31, 2025 December 31, 2024

Interest rate swaps

3 unchanged sentences

The fair values of the foreign exchange contracts were based on Level 2 observable inputs using quoted market prices for similar assets in an active market.

The counterparties to the derivative financial instruments are major international financial institutions.

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

As of September 30, 2024, the Company did not anticipate non-performance by any of its counterparties.

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

Three Months Ended

September 30, Nine Months Ended

September 30,

Derivatives designated as hedging instruments 2025 2024

Interest rate swaps $ — $ — $ — $ ( 120 )

Foreign exchange contracts $ ( 129 ) $ 201

$ ( 203 ) $ 435 $ 20 $ ( 1,018 )

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 three and nine months ended September 30, 2024, the Company reclassified $ 0.03 million and $ 0.2 million, respectively, of cash flow hedges in accumulated other comprehensive losses to earnings, related to foreign exchange contracts recognized in cost of sales.

At September 30, 2024, the estimated amount of existing net losses expected to be reclassified into earnings within the next 12 months was $ 0.2 million.

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

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

During the nine months ended September 30, 2023, the Company reclassified $ 0.8 million of cash flow hedges in accumulated other comprehensive losses to earnings.

This was comprised of a gain of $ 0.1 million related to realized interest rate swap and a gain of $ 0.7 million related to foreign exchange contracts recognized in cost of sales.

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

During the three months ended March 31, 2025 and 2024, the Company reclassified $ 0.1 million of cash flow hedges in accumulated other comprehensive losses to earnings, related to foreign exchange contracts recognized in cost of sales.

At March 31, 2025, the estimated amount of existing net gains expected to be reclassified into earnings within the next 12 months was below $ 0.1 million.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

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

Three Months Ended

September 30, Nine Months Ended

September 30,

Derivatives not designated as hedging instruments Location of gain (loss) 2025 2024

3 unchanged sentences

$ ( 359 ) $ 47

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

NOTE 8 — STOCK COMPENSATION

On June 20, 2024, the stockholders of the Company approved an amendment and restatement of the Company's Amended and Restated 2000 Long Term Incentive Plan (the "Plan").

The amendment and restatement of the Plan revised the terms and conditions of the Plan to, among other things, increase the shares available for grant under the Plan by 1,500,000 shares.

As of September 30, 2024, there were 1,805,462 shares available for the grant of awards under the Plan, assuming maximum performance of performance-based awards.

As of March 31, 2025, there were 1,142,889 shares available for the grant of awards under the Company’s Amended and Restated 2000 Long Term Incentive Plan (“Plan”), assuming maximum performance of performance-based awards.

Option Awards

A summary of the Company’s stock option activity and related information for the nine months ended September 30, 2024 is as follows:

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2025 is as follows:

Options Weighted-

4 unchanged sentences

782,500 $ 11.41

Expirations ( 252,000 ) 18.68

Options outstanding, September 30, 2024 (1)

Grants 44,500 5.13

Options outstanding, March 31, 2025 (1)

827,000 11.07 4.8 $ —

Options exercisable, September 30, 2024

Options exercisable, March 31, 2025

688,750 $ 11.74 3.9 $ —

1 unchanged sentence

Weighted-average years expected to be recognized over 1.7

(1) Includes a non-plan stock option award of 15,000 stock options.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their stock options on September 30, 2024.

The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on September 30, 2024 and the exercise price.

(1) Includes a non-plan stock option award of 15,000 stock options granted in 2024.

The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on March 31, 2025 and the exercise price.

Restricted Stock

A summary of the Company’s restricted stock activity and related information for the nine months ended September 30, 2024 is as follows:

A summary of the Company’s restricted stock activity and related information for the three months ended March 31, 2025 is as follows:

Shares Weighted-

4 unchanged sentences

Vested ( 193,096 ) 10.42

Cancellations ( 9,150 ) 10.01

Non-vested restricted shares, September 30, 2024

Non-vested restricted shares, March 31, 2025

738,947 $ 7.23

1 unchanged sentence

Weighted-average years expected to be recognized over 1.9

The total fair value of restricted stock that vested during the nine months ended September 30, 2024 was $ 2.8 million.

Performance shares

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

The number of shares of common stock earned will be determined based on the attainment of specified performance goals at the end

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

of the performance period, as determined by the Compensation Committee of the Board.

March 31, 2025

The total fair value of restricted stock that vested during the three months ended March 31, 2025 was $ 1.0 million.

Performance shares

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

The number of shares of common stock earned will be determined based on the attainment of specified performance goals at the end of the performance period, as determined by the Compensation Committee of the Company’s board of directors (the “Board of Directors”).

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

A summary of the Company’s performance-based award activity and related information for the nine months ended September 30, 2024 is as follows:

A summary of the Company’s performance-based award activity and related information for the three months ended March 31, 2025 is as follows:

average grant

2 unchanged sentences

Grants 331,561 5.13

Vested ( 152,188 ) 14.18

Cancellations ( 24,315 ) 13.23

Non-vested performance-based awards, September 30, 2024

Forfeitures (2)

( 123,069 ) 12.19

Non-vested performance-based awards, March 31, 2025

737,899 $ 6.70

Total unrecognized compensation expense remaining (in thousands) $ 3,197

1 unchanged sentence

(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.

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

The total fair value of performance-based awards that vested during the nine months ended September 30, 2024 was $ 1.5 million.

(2) Includes the forfeiture of performance-based awards granted in 2022 as the performance metric was not attained.

Cash-settled performance-based awards

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

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

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

A summary of the Company’s cash-settled performance-based awards activity and related information for the nine months ended September 30, 2024 is as follows:

A summary of the Company’s cash-settled performance-based awards activity and related information for the three months ended March 31, 2025 is as follows:

Cash-settled performance-based awards (1)

1 unchanged sentence

82,176 $ 5.91

Cancellations ( 1,419 ) 6.77

Non-vested cash-settled performance-based awards, September 30, 2024

Forfeitures (2)

( 82,176 ) 5.91

Non-vested cash-settled performance-based awards, March 31, 2025

Total unrecognized compensation expense remaining (in thousands) $ —

1 unchanged sentence

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

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

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

(2) Includes the forfeiture of performance-based awards granted in 2022 as the performance metric was not attained.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

Stock Compensation Expense Components 2025 2024

4 unchanged sentences

Total Stock Compensation Expense $ 1,062 $ 807

NOTE 9 — INCOME (LOSS) PER COMMON SHARE

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

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

NOTE 9 — LOSS PER COMMON SHARE

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

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

Anti-dilutive securities are not included in the computation of diluted earnings per share under the treasury stock method.

The calculations of basic and diluted income (loss) per common share for the three and nine months ended September 30, 2024 and 2023 are as follows:

The calculations of basic and diluted loss per common share for the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands, except per share amounts)

Net income (loss) – Basic and Diluted

Net loss – Basic and Diluted

$ ( 4,201 ) $ ( 6,260 )

3 unchanged sentences

Weighted-average shares outstanding – Diluted 21,592 21,377

Basic income (loss) per common share

Basic loss per common share

$ ( 0.19 ) $ ( 0.29 )

Diluted income (loss) per common share

Diluted loss per common share

$ ( 0.19 ) $ ( 0.29 )

Antidilutive Securities (1)

1,231 1,237 1,504 1,600

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 10— INCOME TAXES

Income tax provision of $ 1.5 million and $ 1.7 million for the three and nine months ended September 30, 2024, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax provision rate of 81.4 % and ( 8.2 )%, respectively.

The effective tax rate for the three months ended September 30, 2024 differs from the federal statutory income tax rate of 21.0 % primarily due to foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

The negative rate for the nine months ended September 30, 2024 reflects tax expense on a pretax financial reporting loss.

The effective tax rate for the nine months ended September 30, 2024 differs from the federal statutory income tax rate of 21.0 % primarily due to the impact of non-deductible expenses and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

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

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

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

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

Income tax benefit of $ 0.1 million and provision of $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively, represent taxes on both U.S.

and foreign earnings at a combined effective income tax benefit rate of 3.3 % and provision rate of ( 5.3 )%, respectively.

The negative rate for the three months ended March 31, 2024 reflects tax expense on a pretax financial reporting loss.

The effective tax rate for the three months ended March 31, 2025 differs from the federal statutory income tax rate of 21.0 % primarily due to foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

The effective tax rate for the three months ended March 31, 2024 differs from the federal statutory income tax rate of 21.0 % primarily due to the expiration of non-qualified stock options and the vesting of equity-based awards, where the book expense exceeded the tax deduction upon vesting, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

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

1 unchanged sentence

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

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended September 30, 2024 and September 30, 2023.

There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three-month periods ended March 31, 2025 and March 31, 2024.

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 11 – BUSINESS SEGMENTS

The Company has two reportable segments, U.S.

Segment information

The Company operates in two reportable segments:

and International.

The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations.

segment includes the Company’s primary domestic business that designs, markets and distributes its products to retailers, distributors and directly to consumers through its own websites.

The International segment consists of certain business operations conducted outside the U.S..

Management evaluates the performance of the U.S.

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

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

Certain general and administrative expenses, such as senior executive salaries and benefits, stock compensation, director fees, and accounting, legal fees and consulting fees, are not allocated to the specific segments and are reflected as unallocated corporate expenses.

segment is the Company’s domestic business that designs, markets and distributes its products to retailers and distributors, as well as directly to consumers through third parties and its own internet websites primarily in the U.S..

The International segment is the Company’s international business that sells and distributes products to consumers primarily in the U.K., the European Union and the Asia Pacific region.

The Company’s chief operation decision maker (“CODM”) is the Company’s Chief Executive Officer.

The Company has segmented its operations to reflect the manner in which the CODM reviews and evaluates the results of its operations.

The CODM allocates operating and capital resources and evaluates the performance of the Company’s segments based on segment net sales, segment gross margin, and segment income from operations.

Such measures give recognition to specifically identifiable operating costs.

Significant segment expenses that are included in segment operating income consist of cost of sales, distribution expenses (which include freight-out expenses and warehouse expenses) and selling, general and administrative expenses.

Certain general and administrative expenses are not allocated to the Company’s segments as these represent corporate level activities and are reflected below as unallocated corporate expenses.

These costs primarily include senior executive salaries and benefits, stock compensation, director fees and accounting, legal fees and consulting fees.

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Segment Performance Measures:

(in thousands)

2 unchanged sentences

Total net sales $ 140,085 $ 142,242

Gross Margin:

$ 46,564 $ 53,283

International 4,073 4,264

Total gross margin $ 50,637 $ 57,547

Income from operations

1 unchanged sentence

International ( 2,952 ) ( 3,089 )

Unallocated corporate expenses ( 4,286 ) ( 4,873 ) ( 13,899 ) ( 15,252 )

Unallocated corporate income (expenses) (1)

2,153 ( 4,523 )

Income from operations

$ 1,099 $ 1,830

(1) Unallocated corporate income for the three months ended March 31, 2025 included a net legal settlement gain of $ 6.4 million.

Details see NOTE 12 — CONTINGENCIES

LIFETIME BRANDS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Three Months Ended

Supplemental information for significant segment expenses:

(in thousands)

Cost of sales:

$ 81,946 $ 77,197

International 7,502 7,498

Total cost of sales $ 89,448 $ 84,695

Freight-out expenses:

$ 3,279 $ 3,312

International 545 798

Total freight-out expenses $ 3,824 $ 4,110

Warehouse expenses:

$ 11,512 $ 9,691

International 2,734 2,380

Total warehouse expenses $ 14,246 $ 12,071

Selling, general and administrative expenses:

$ 29,875 $ 30,838

International 3,746 4,175

Unallocated corporate (income) expenses (1)

( 2,153 ) 4,523

Total selling, general and administrative expenses $ 31,468 $ 39,536

(1) Unallocated corporate income for the three months ended March 31, 2025 included a net legal settlement gain of $ 6.4 million.

Details see NOTE 12 — CONTINGENCIES

Three Months Ended

(in thousands)

Depreciation and amortization:

2 unchanged sentences

Total depreciation and amortization $ 5,698 $ 4,939

September 30,

Capital expenditures:

$ 1,567 $ 516

International 6 84

Total capital expenditures $ 1,573 $ 600

2025 December 31,

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 12 — CONTINGENCIES

39 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

to Enter the Decree, and the court entered the Decree into order on December 14, 2023, thereby effectuating the Decree.

1 unchanged sentence

The Company thereafter commenced remedial work on OU-1 in accordance with the 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.

The Company 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 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

By letter dated August 26, 2019, the Company was advised that U.S.

Customs and Border Protection ("CBP") had commenced an investigation, pursuant to 19 U.S.C.

§1592, regarding the Company’s tariff classification of certain tableware and kitchenware.

The issue centers on whether such merchandise meets the criteria for reduced duty rates as specified sets as those terms are defined in Chapter 69, Note 6(b), Harmonized Tariff System of the United States.

The period of investigation is stated to be from August 26, 2014 to the present.

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

The Company's counsel filed a Lead 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.

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 protests was approved on October 15, 2020;

the other two remain pending.

If the CBP approves these additional claims and accepts the evidence presented, then no additional duties will be owed for the remaining protested shipments.

Because the period of investigation covers a five-year period, the Company is compiling supporting documentation packages for all tableware collections imported during this period.

In the third quarter of fiscal 2024, the statute of limitations has expired for the collection of nearly all of the duties and penalties related to this matter.

At this time, the Company considers any potential losses related to this matter would not have a material adverse effect on the Company’s results of operations.

As of March 31, 2025, the remaining liability is $ 5.4 million.

Legal Settlement Gain

In 2015, Taylor Precision Products, Inc.

(“Taylor” and/or the “Plaintiff”), acquired by the Company on March 2, 2018, commenced a legal action related to a 2013 acquisition, alleging that the seller failed to sufficiently disclose certain adverse information as part of the acquisition.

In February 2025, the Company received a net settlement of $ 6.4 million, which consisted of a $ 7.0 million settlement less $ 0.6 million in legal fees related to this case.

The Company recognized the gain in selling, general and administrative expenses in the condensed consolidated statement of operations for the quarter ended March 31, 2025.

The Company is, from time to time, involved in other legal proceedings.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 13 — OTHER

Cash dividends

Dividends declared in the nine months ended September 30, 2024 were as follows:

Dividends declared in the three months ended March 31, 2025 were as follows:

Dividend per share Date declared Date of record Payment date

$ 0.0425 3/11/2025 5/1/2025 5/15/2025

$ 0.0425 6/20/2024 8/1/2024 8/15/2024

$ 0.0425 8/6/2024 11/1/2024 11/15/2024

During the nine months ended September 30, 2024, the Company paid dividends of $ 2.9 million.

This included payments made on February 15, 2024, May 15, 2024 and August 15, 2024 of $ 0.9 million, $ 0.9 million and $ 0.9 million to stockholders of record on February 1, 2024, May 1, 2024 and August 1, 2024 respectively, and payments of $ 0.2 million for dividends payable upon the vesting of restricted shares and performance shares.

In the three months ended September 30, 2024, the Company reduced retained earnings for the accrual of $ 1.0 million relating to the dividend payable on November 15, 2024.

On November 5, 2024, the Board declared a quarterly dividend of $ 0.0425 per share of common stock payable on February 14, 2025 to stockholders of record on January 31, 2025.

During the three months ended March 31, 2025, the Company paid dividends of $ 1.0 million.

This included payments made on February 14, 2025 of $ 0.9 million to stockholders of record on January 31, 2025 and payments of $ 0.1 million for dividends payable upon the vesting of restricted shares.

In the three months ended March 31, 2025, the Company reduced retained earnings for the accrual of $ 1.0 million relating to the dividend payable on May 15, 2025.

Stock repurchase program

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

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

No repurchases were effected during the nine months ended September 30, 2024.

As of September 30, 2024, the remaining dollar amount available for repurchases under the Board authorized plan was $ 11.1 million.

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

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

No shares were repurchased during the three months ended March 31, 2025.

As of March 31, 2025, the remaining dollar amount available for repurchases under the Board of Directors’ authorized plan was $ 11.1 million.

Supplemental cash flow information

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

Components of accumulated other comprehensive loss, net

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(in thousands)

2 unchanged sentences

Translation adjustment during period 417 40

Amounts reclassified from accumulated other comprehensive loss (1)

Net change in translation adjustment 872 ( 1,242 ) 15,117 1,556

Balance at end of period $ ( 17,967 ) $ ( 32,574 )

Accumulated deferred losses on cash flow hedges:

Accumulated deferred gains on cash flow hedges:

Balance at beginning of period $ 247 $ ( 134 )

Change in unrealized (losses) gains

( 235 ) 254 ( 163 ) ( 257 )

Amounts reclassified from accumulated other comprehensive loss:

Settlement of cash flow hedge (1)

32 181 183 ( 761 )

Net change in cash flow hedges, net of taxes of $ 0 , $ 0

( 203 ) 435 20 ( 1,018 )

Balance at end of period $ 118 $ 67

6 unchanged sentences

$ ( 18,023 ) $ ( 33,245 )

(1) Amounts reclassified to the Vasconia investment carrying value as a result of the discontinuation of the equity method investment of accounting and subsequently recognized as a loss on equity securities in the unaudited condensed consolidated statements of operations, to reduce the Vasconia investment to its fair value.

Refer to NOTE 4 —INVESTMENT for additional information.

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

(1) Amounts reclassified are recorded in cost of sales on the unaudited condensed consolidated statement of operations.

(2) Amounts are recorded in selling, general and administrative expense on the unaudited condensed consolidated statements of operations.

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

What changed 10-Q

Item 1. Financial Statements