Financial Performance - Consolidated net sales for Q3 2025 were $171.9 million, a decrease of $11.9 million, or 6.5%, compared to $183.8 million in Q3 2024[165]. - U.S. segment net sales for Q3 2025 were $158.1 million, down $12.1 million, or 7.1%, from $170.2 million in Q3 2024[166]. - Consolidated net sales for the nine months ended September 30, 2025 were $443.9 million, a decrease of $23.8 million, or 5.1%, compared to $467.7 million for the same period in 2024[187]. - U.S. segment net sales for the nine months ended September 30, 2025 were $406.0 million, a decrease of $25.2 million, or 5.8%, compared to $431.2 million for the same period in 2024[188]. - International segment net sales for the nine months ended September 30, 2025 were $37.9 million, an increase of $1.4 million, or 3.8%, compared to $36.5 million for the same period in 2024[192]. Gross Margin - Gross margin for Q3 2025 was $60.4 million, or 35.1%, compared to $67.4 million, or 36.7%, in Q3 2024[171]. - Gross margin for the nine months ended September 30, 2025 was $161.9 million, or 36.5%, down from $179.5 million, or 38.4%, for the same period in 2024[193]. - U.S. segment gross margin for the nine months ended September 30, 2025 was $148.9 million, or 36.7%, down from $166.5 million, or 38.6%, for the same period in 2024[194]. - International segment gross margin for the nine months ended September 30, 2025 was $13.0 million, or 34.3%, unchanged from $13.0 million, or 35.6%, for the same period in 2024[195]. Expenses - Distribution expenses for the nine months ended September 30, 2025 were $53.3 million, an increase of $2.0 million, or 3.9%, compared to $51.3 million for the same period in 2024[196]. - Selling, general and administrative expenses for the nine months ended September 30, 2025 were $104.5 million, a decrease of $12.1 million, or 10.4%, compared to $116.6 million for the same period in 2024[199]. Cash Flow and Liquidity - As of September 30, 2025, the Company had cash and cash equivalents of $12.1 million, an increase from $2.9 million at December 31, 2024, with working capital rising to $236.4 million[213]. - Net cash provided by operating activities was $3.9 million for the nine months ended September 30, 2025, compared to a net cash used of $1.7 million for the same period in 2024[243]. - Net cash used in investing activities increased to $3.1 million for the nine months ended September 30, 2025, from $1.6 million in 2024, driven by equipment purchases for the Hagerstown Facility[244]. - Net cash provided by financing activities was $8.3 million for the nine months ended September 30, 2025, compared to net cash used of $6.9 million in 2024, due to higher net proceeds from the revolving credit facility[245]. Capital Expenditures and Investments - The Hagerstown Facility will require capital expenditures of approximately $9.0 million and start-up costs of about $7.0 million[156]. - Capital expenditures for the nine months ended September 30, 2025, totaled $3.2 million[230]. Debt and Interest - Interest expense for the three months ended September 30, 2025 was $5.0 million, a decrease from $5.8 million for the same period in 2024[183]. - Interest expense decreased to $15.0 million for the nine months ended September 30, 2025, down from $16.6 million in 2024, due to lower average outstanding borrowings and interest rates[206]. - The interest rate on outstanding borrowings under the Term Loan was 9.75% as of September 30, 2025[226]. - The Company was in compliance with the covenants of the Debt Agreements at September 30, 2025, and expects to continue borrowing based on working capital needs[228]. Other Financial Metrics - Adjusted EBITDA for the trailing twelve months ended September 30, 2025, was $47.2 million[229]. - The effective income tax benefit rate for the nine months ended September 30, 2025, was 0.14%, compared to a provision rate of (8.2)% in 2024, primarily due to a partial valuation allowance on U.S. deferred tax assets[209]. Inventory and Receivables - Inventory turnover for the three months ended September 30, 2025, was 2.0 times (181 days), slightly down from 2.1 times (175 days) in the same period of 2024[214]. - As of September 30, 2025, $13.6 million of accounts receivables were available for sale to HSBC[235]. Strategic Initiatives - The company launched Project Concord in January 2025 to improve growth and streamline costs in its International operations[157].

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Data and Key Metrics Changes - The net loss for Q3 2025 was $1.2 million or $0.05 per diluted share, compared to a net income of $0.3 million or $0.02 per diluted share in Q3 2024 [14] - Adjusted net income for Q3 2025 was $2.5 million or $0.11 per share, down from $4.5 million or $0.21 per diluted share in 2024 [15] - Consolidated sales declined by 6.5% to $171.9 million, with U.S. segment sales decreasing by 7.1% to $158.1 million [15][16] - Adjusted EBITDA for the trailing 12 months ended September 30 was $47.2 million [11] Business Line Data and Key Metrics Changes - U.S. segment gross margin decreased to 35.1% from 36.8%, primarily due to higher selling prices to offset tariffs [16][17] - International segment sales increased by 1.5% to $13.8 million, but decreased by 2.7% when excluding foreign exchange translation [16] - Selling, general and administrative expenses decreased by 8.5% to $35.5 million, with U.S. expenses decreasing by $1.5 million [18] Market Data and Key Metrics Changes - The general merchandise category saw a decline in shipments of approximately 6.1% for the quarter, with Lifetime's shipments aligning with this metric [5] - The company noted a slightly downtrend for the holiday season but expects shipments to two of its three largest customers to rebound in Q4 [6] Company Strategy and Development Direction - The company is focused on a tariff mitigation strategy, expanding sourcing in Mexico and Southeast Asia, and implementing targeted pricing actions [7][10] - Innovation remains central to the growth strategy, with new product launches aligned with consumer trends [10] - The company anticipates that the groundwork laid in 2025 will lead to stronger performance and renewed growth momentum in 2026 and beyond [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current macroeconomic backdrop and expects a return to normalcy in customer behavior and end markets [5][12] - The company is well-positioned to thrive as normalization returns to global and domestic markets [14] Other Important Information - Liquidity remains solid at $51 million, allowing for selective investments in long-term profitability [11][20] - The company has streamlined processes and captured tangible savings, reflected in disciplined cost management [7][11] Q&A Session Summary Question: Can you quantify the revenue shift for large customers? - Management stated they could not provide specifics at this time [22] Question: Can you provide more information about pricing versus unit volumes? - Management indicated that price increases approximately offset additional tariffs, with further impacts expected in Q4 [24] Question: What is the current status of product sourcing, especially regarding China? - Management noted fluctuations in sourcing, with some production shifting back to China due to favorable economics [27][28] Question: What types of M&A opportunities are being considered? - Management is actively engaged in M&A opportunities, seeing meaningful reductions in valuation due to market conditions [29]

Core Insights - Lifetime Brands (LCUT) reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, but down from $0.21 per share a year ago, indicating an earnings surprise of +10.00% [1] - The company posted revenues of $171.91 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.57% and down from $183.84 million year-over-year [2] - Lifetime Brands shares have declined approximately 47.9% year-to-date, contrasting with the S&P 500's gain of 15.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $204.45 million, while for the current fiscal year, the estimate is -$0.45 on revenues of $651.04 million [7] - The estimate revisions trend for Lifetime Brands was unfavorable prior to the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Consumer Products - Discretionary industry, to which Lifetime Brands belongs, is currently ranked in the bottom 29% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8]

Financial Performance - Consolidated net sales for Q3 2025 were $171.9 million, a decrease of $11.9 million, or 6.5%, compared to Q3 2024[3] - Gross margin for Q3 2025 was $60.4 million, or 35.1%, down from $67.4 million, or 36.7%, in Q3 2024[4] - Net loss for Q3 2025 was $(1.2) million, or $(0.05) per diluted share, compared to net income of $0.3 million, or $0.02 per diluted share, in Q3 2024[5] - Adjusted income from operations for Q3 2025 was $11.5 million, down from $13.2 million in Q3 2024[5] - Consolidated net sales for the nine months ended September 30, 2025 were $443.9 million, a decrease of $23.8 million, or 5.1%, compared to the same period in 2024[6] - Gross margin for the nine months ended September 30, 2025 was $161.9 million, or 36.5%, down from $179.5 million, or 38.4%, in the same period in 2024[6] - The net loss for the nine months ended September 30, 2025, was $45.089 million, compared to a net loss of $24.083 million in 2024, indicating an increase in losses of 87.2%[26] - For the three months ended September 30, 2025, the adjusted net income was $2,505,000, compared to $4,505,000 in 2024, reflecting a decrease of 44.4%[30] - For the nine months ended September 30, 2025, the adjusted net loss was $(5,406,000), compared to an adjusted net income of $674,000 in 2024[30] Expenses and Costs - Selling, general and administrative expenses for Q3 2025 were $35.5 million, a decrease of $3.3 million, or 8.5%, compared to Q3 2024[4] - Adjusted EBITDA for the twelve months ended September 30, 2025, was $47.217 million, compared to $22.973 million for the twelve months ended December 31, 2024, reflecting a significant increase[28] - The company reported a goodwill impairment of $33.237 million for the nine months ended September 30, 2025, which was not present in the same period in 2024[22] Assets and Liabilities - Cash and cash equivalents at the end of the period increased to $12.125 million from $5.984 million, representing a significant increase of 102.4%[26] - Total current assets as of September 30, 2025, were $374.968 million, slightly up from $373.568 million at the end of 2024[24] - Total liabilities decreased to $396.479 million as of September 30, 2025, from $404.387 million at the end of 2024, a reduction of 2.0%[24] - The company’s inventory increased to $221.185 million as of September 30, 2025, compared to $202.408 million at the end of 2024, marking an increase of 9.3%[24] Sales Breakdown - Net sales for the three months ended September 30, 2025, were $171.912 million, a decrease of 6.5% compared to $183.837 million for the same period in 2024[22] - The U.S. net sales for the three months ended September 30, 2025, were $158,121,000, down 7.1% from $170,222,000 in 2024[35] - The international net sales for the nine months ended September 30, 2025, increased by 0.9% to $37,913,000 compared to $36,540,000 in 2024[35] - The total net sales for the nine months ended September 30, 2025, were $443,859,000, a decrease of $23,886,000 or 5.3% from $467,745,000 in 2024[35] Future Outlook - The company will refrain from issuing formal financial guidance for 2025 due to ongoing uncertainty surrounding tariffs and trade dynamics[12] - The company is evaluating M&A opportunities to strengthen market share and long-term competitive positioning[2] Dividends - The Board of Directors declared a quarterly dividend of $0.0425 per share, payable on February 13, 2026[13] Share Information - The diluted weighted-average shares outstanding for the three months ended September 30, 2025, were 21,834, compared to 21,610 in 2024[31] - The adjusted diluted income per common share for the three months ended September 30, 2025, was $0.11, down from $0.21 in 2024, a decline of 47.6%[30]

Core Insights - The company is well-positioned to capitalize on industry dislocation despite current tariff volatility, leveraging a fully implemented tariff-mitigation strategy and disciplined cost management [3][4][14] - The financial results for the third quarter of 2025 show a decrease in consolidated net sales and gross margin compared to the same period in 2024, indicating challenges in the current market environment [4][5][6] - The company continues to explore M&A opportunities to strengthen market share and competitive positioning as the broader market stabilizes [3][14] Financial Performance - Consolidated net sales for Q3 2025 were $171.9 million, a decrease of $11.9 million or 6.5% from $183.8 million in Q3 2024 [4] - Gross margin for Q3 2025 was $60.4 million, or 35.1%, down from $67.4 million, or 36.7%, in Q3 2024 [5] - The net loss for Q3 2025 was $(1.2) million, or $(0.05) per diluted share, compared to net income of $0.3 million, or $0.02 per diluted share, in Q3 2024 [6] Year-to-Date Results - For the nine months ended September 30, 2025, consolidated net sales were $443.9 million, a decrease of $23.8 million or 5.1% from $467.7 million in the same period of 2024 [7] - Gross margin for the nine months ended September 30, 2025, was $161.9 million, or 36.5%, compared to $179.5 million, or 38.4%, in the same period of 2024 [8] - The net loss for the nine months ended September 30, 2025, was $(45.1) million, or $(2.08) per diluted share, compared to a net loss of $(24.1) million, or $(1.12) per diluted share, in the same period of 2024 [11] Cost Management and Strategic Initiatives - Selling, general and administrative expenses for Q3 2025 were $35.5 million, a decrease of $3.3 million or 8.5% from $38.8 million in Q3 2024 [5] - The company reported an adjusted income from operations of $11.5 million for Q3 2025, down from $13.2 million in Q3 2024 [6][10] - Project Concord is expected to enhance efficiency and improve long-term performance in the International segment [14] Liquidity and Financial Position - As of September 30, 2025, the company had liquidity of $50.9 million, consisting of $12.1 million in cash and cash equivalents, $25.2 million available under the ABL Agreement, and $13.6 million under the Receivables Purchase Agreement [13] - The company declared a quarterly dividend of $0.0425 per share, payable on February 13, 2026 [15]

Core Points - Lifetime Brands, Inc. will release its third quarter 2025 financial results on November 6, 2025, before market open [1] - A conference call to discuss the results will take place on the same day at 11:00 a.m. Eastern Time [1] - Investors and analysts can access the live conference call via specific dialing numbers or through the investor relations website [2] Company Overview - Lifetime Brands is a leading global designer, developer, and marketer of a wide range of branded consumer products used in the home [4] - The company markets products under well-known kitchenware brands such as Farberware, KitchenAid, and Sabatier, as well as respected tableware and giftware brands like Mikasa and Pfaltzgraff [4] - Lifetime Brands also provides exclusive private label products to leading retailers worldwide [4]

Core Viewpoint - Lifetime Brands, Inc. is participating in the LD Micro Main Event XIX Investor Conference scheduled for October 19-21, 2025, in San Diego, CA, highlighting its commitment to engaging with investors and showcasing its product offerings [1][2]. Company Overview - Lifetime Brands is a leading global designer, developer, and marketer of a wide range of branded consumer products used in the home, including kitchenware, tableware, and home solutions [3]. - The company markets products under well-known brands such as Farberware, KitchenAid, Mikasa, and S'well, among others, and also provides exclusive private label products to major retailers worldwide [3]. Conference Participation - The CEO Robert Kay and Senior VP of Finance Scott Rabinowitz will represent the company at the conference, available for one-on-one meetings with investors [2]. - Interested investors can schedule meetings through their LD Micro representative or contact the company's investor relations [2]. Contact Information - For further inquiries, investors can reach out to Laurence Winoker, CFO of Lifetime Brands, or Shannon Devine from MZ North America [4].

Summary of Lifetime Brands Conference Call (September 25, 2025) Company Overview - **Company**: Lifetime Brands (NasdaqGS: LCUT) - **Industry**: Consumer Goods, specifically in product development and design Key Points Mergers and Acquisitions Strategy - The company is focusing on acquiring businesses in adjacent markets, such as pet products, leveraging its strong product development capabilities [2][3] - Acquisitions are seen as financially accretive, allowing the company to utilize its existing distribution infrastructure for cost savings [4][6] Distribution and Operational Efficiency - Lifetime Brands has a unique distribution system that allows for cost-effective servicing of major clients like Walmart without needing to expand its sales force [5][6] - The company is restructuring its distribution centers to improve efficiency, moving from New Jersey to Maryland to take advantage of lower costs and state incentives of $18 million [13][38] International Operations and Project Concord - The company has faced challenges in its UK operations, which accounted for 90% of its international revenue, leading to a restructuring initiative called Project Concord aimed at achieving breakeven [10][11] - The company is shifting its manufacturing strategy, moving production out of China to Southeast Asia while still maintaining some operations in China due to cost advantages [21][23] Supply Chain and Tariffs - The company acknowledges the decoupling of China and the West, impacting its supply chain strategy, but still finds China advantageous for certain products due to its established infrastructure [19][22] - The company plans to have 80% of its supply chain out of China by the end of the year, while still moving some operations back into China [23][24] Financial Performance and Capital Allocation - Lifetime Brands has a strong cash flow generation capability, even during economic downturns, and maintains a focus on dividends and capital allocation for M&A [25][29] - The company aims to keep its leverage below three, having achieved a low of 2.4 in 2021, and continues to generate predictable cash flow [33] Growth Opportunities - The company is exploring new product innovations and has successfully launched products in the Dollar General channel, projecting a $40 million opportunity [41][42] - New product lines, such as the Build A Board, have shown strong market performance and are being expanded internationally [45] Market Positioning - Lifetime Brands positions itself defensively in a disruptive market, anticipating growth as market conditions improve [39] - The company is committed to innovation and expanding its product offerings across various categories [44] Additional Insights - The company has a strong focus on maintaining operational efficiency and cost management in response to rising industrial real estate costs [13] - The management emphasizes the importance of adapting to market changes and consumer preferences to sustain growth [40][46]

[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial items for the periods ended June 30, 2025 and December 31, 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, at specific points in time Table: Condensed Consolidated Balance Sheets Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $12,045 | $2,929 | | Accounts receivable, net | $89,554 | $156,743 | | Inventory | $218,208 | $202,408 | | Total Current Assets | $336,981 | $373,568 | | Total Assets | $551,877 | $634,310 | | Total Current Liabilities | $126,926 | $151,743 | | Revolving Credit Facility | $37,683 | $42,693 | | Term Loan | $128,456 | $130,949 | | Total Stockholders' Equity | $185,768 | $229,923 | - **Total assets** decreased by **$82.4 million** from December 31, **2024**, to June 30, **2025**, primarily due to a significant reduction in accounts receivable and intangible assets[11](index=11&type=chunk) - **Total stockholders' equity** decreased by **$44.1 million**, largely driven by an accumulated deficit increase[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods Table: Condensed Consolidated Statements of Operations Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $131,862 | $141,666 | $271,947 | $283,908 |\n| Gross margin | $50,839 | $54,550 | $101,476 | $112,097 |\n| (Loss) income from operations | $(37,207) | $1,167 | $(36,108) | $2,997 |\n| Net loss | $(39,699) | $(18,167) | $(43,900) | $(24,427) |\n| Basic loss per common share | $(1.83) | $(0.85) | $(2.03) | $(1.14) |\n| Diluted loss per common share | $(1.83) | $(0.85) | $(2.03) | $(1.14) | - The company reported a significant **net loss** of **$39.7 million** for the three months ended June 30, **2025**, compared to **$18.2 million** in the prior year, primarily due to a **$33.2 million** **goodwill impairment** charge[13](index=13&type=chunk) - **Net sales** decreased by **6.9%** for the three months and **4.2%** for the six months ended June 30, **2025**, compared to the respective prior periods[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the company's net loss and other comprehensive income/loss, leading to total comprehensive loss Table: Condensed Consolidated Statements of Comprehensive Loss Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(39,699) | $(18,167) | $(43,900) | $(24,427) |\n| Other comprehensive (loss) income, net of taxes | $(262) | $14,239 | $30 | $14,493 |\n| Comprehensive loss | $(39,961) | $(3,928) | $(43,870) | $(9,934) | - **Comprehensive loss** significantly increased to **$39.96 million** for the three months ended June 30, **2025**, from **$3.93 million** in the prior year, mainly due to the higher **net loss** and a shift from other comprehensive income to loss[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section outlines changes in the company's equity, including common stock and accumulated deficit Table: Condensed Consolidated Statements of Stockholders' Equity Summary | Metric (in thousands) | December 31, 2024 | June 30, 2025 | | :-------------------- | :---------------- | :------------ | | Total Stockholders' Equity | $229,923 | $185,768 |\n| Accumulated deficit | $(32,550) | $(78,426) |\n| Common stock shares outstanding | 22,155,735 | 22,657,435 | - **Total stockholders' equity** decreased by **$44.155 million** from December 31, **2024**, to June 30, **2025**, primarily due to **net losses** and dividend payments[19](index=19&type=chunk) - The **accumulated deficit** increased significantly from **$(32.550) million** at December 31, **2024**, to **$(78.426) million** at June 30, **2025**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by operating, investing, and financing activities Table: Condensed Consolidated Statements of Cash Flows Summary | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $26,057 | $20,930 |\n| Net cash used in investing activities | $(2,746) | $(1,098) |\n| Net cash used in financing activities | $(14,363) | $(32,546) |\n| Increase (decrease) in cash and cash equivalents | $9,116 | $(12,793) |\n| Cash and cash equivalents at end of period | $12,045 | $3,396 | - **Net cash provided by operating activities** increased to **$26.06 million** for the six months ended June 30, **2025**, from **$20.93 million** in the prior year, driven by a **net legal settlement gain** and improved accounts receivable collection[21](index=21&type=chunk)[246](index=246&type=chunk) - **Cash and cash equivalents** at the end of the period increased to **$12.05 million** from **$3.40 million** year-over-year[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [NOTE 1 — Basis of Presentation and Summary of Accounting Policies](index=10&type=section&id=NOTE%201%20%E2%80%94%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20ACCOUNTING%20POLICIES) This note describes the basis of financial statement presentation and significant accounting policies - The Company designs, sources, and sells branded kitchenware, tableware, and other home products, marketing them under owned or licensed brands and private labels[24](index=24&type=chunk) - The business is seasonal, with a majority of sales (**57-58%**) occurring in the third and fourth quarters, leading to increased inventory levels from June to October[27](index=27&type=chunk) - A **$33.2 million** non-cash **goodwill impairment** charge was recognized in Q2 **2025** for the U.S. reporting unit due to a sustained decline in market valuation and revised downward near-term forecasts impacted by U.S. tariff policies[45](index=45&type=chunk)[46](index=46&type=chunk) - New accounting pronouncements, ASU **2023-09** (Income Taxes) and ASU **2024-03** (Expense Disaggregation), are being evaluated for their impact on financial statements, with effective dates in **2024** and **2026**, respectively[57](index=57&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [NOTE 2 — Revenue](index=14&type=section&id=NOTE%202%20%E2%80%94REVENUE) This note details the company's revenue recognition policies and disaggregated revenue by segment and product category - **Revenue** is primarily recognized at the point of shipment (FOB Shipping Point) when the customer obtains control of the products[61](index=61&type=chunk) Table: NOTE 2 — Revenue Summary | Segment/Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | **Net Sales** | | | | |\n| U.S. segment | $119,315 | $130,503 | $247,825 | $260,983 |\n| International segment | $12,547 | $11,163 | $24,122 | $22,925 |\n| **Total net sales** | **$131,862** | **$141,666** | **$271,947** | **$283,908** |\n| | | | | |\n| **U.S. Product Categories** | | | | |\n| Kitchenware | $82,549 | $80,787 | $162,070 | $164,317 |\n| Tableware | $21,323 | $26,341 | $48,900 | $52,100 |\n| Home Solutions | $15,443 | $23,375 | $36,855 | $44,566 |\n| | | | | |\n| **Geographic Region** | | | | |\n| United States | $115,046 | $123,695 | $239,251 | $249,829 |\n| United Kingdom | $7,233 | $7,150 | $14,187 | $14,616 |\n| Rest of World | $9,583 | $10,821 | $18,509 | $19,463 | - For the three months ended June 30, **2025**, **U.S. segment net sales** decreased by **8.6%**, while **International segment net sales** increased by **12.5%** (**6.6%** in constant currency)[65](index=65&type=chunk)[175](index=175&type=chunk)[179](index=179&type=chunk) [NOTE 3 — Leases](index=15&type=section&id=NOTE%203%20%E2%80%94%20LEASES) This note provides information on the company's lease arrangements and related expenses Table: NOTE 3 — Leases Summary | Lease Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fixed lease expense | $4,318 | $4,265 | $8,576 | $8,528 |\n| Variable lease expense | $1,812 | $1,650 | $3,565 | $3,018 |\n| **Total lease expense** | **$6,130** | **$5,915** | **$12,141** | **$11,546** | - The Company entered into a new lease agreement for a distribution center in Hagerstown, Maryland, with a term of **180 months** starting Q1 **2026**, including **$7.2 million** in rent abatement and **$5.1 million** in tenant improvement allowance[69](index=69&type=chunk) - **Operating cash flows** for operating leases were **$9.71 million** for the six months ended June 30, **2025**, up from **$9.49 million** in the prior year[67](index=67&type=chunk) [NOTE 4 — Investment](index=16&type=section&id=NOTE%204%20%E2%80%94INVESTMENT) This note describes the company's investment in Grupo Vasconia S.A.B. and related accounting treatment - The Company holds a **24.7%** interest in Grupo Vasconia S.A.B., a Mexican housewares company[70](index=70&type=chunk) - In Q2 **2024**, the Company lost significant influence over Vasconia due to bankruptcy proceedings, discontinuing the equity method and reclassifying accumulated other comprehensive losses, resulting in a **$14.2 million** non-cash loss on equity securities[70](index=70&type=chunk)[192](index=192&type=chunk)[213](index=213&type=chunk) - The fair value of the Vasconia investment was not material as of June 30, **2025**, and was measured using the income approach based on Level **3** unobservable inputs[70](index=70&type=chunk)[71](index=71&type=chunk) [NOTE 5 — Intangible Assets](index=17&type=section&id=NOTE%205%20%E2%80%94%20INTANGIBLE%20ASSETS) This note details the company's intangible assets, including goodwill, and any impairment charges Table: NOTE 5 — Intangible Assets Summary | Intangible Asset (in thousands) | June 30, 2025 Net | December 31, 2024 Net | | :------------------------------ | :---------------- | :-------------------- | | Goodwill | $0 | $33,237 |\n| Licenses | $3,053 | $3,281 |\n| Trade names | $72,591 | $75,840 |\n| Customer relationships | $64,733 | $69,652 |\n| Other | $1,280 | $1,517 |\n| **Total** | **$141,657** | **$183,527** | - A **$33.2 million** non-cash **goodwill impairment** charge was recognized in Q2 **2025** for the U.S. reporting unit, fully reducing its goodwill carrying value to zero, due to declining market valuation and revised forecasts impacted by U.S. tariff policies[75](index=75&type=chunk)[76](index=76&type=chunk) - The impairment test was performed using discounted cash flow and market multiple methods, classified as Level **3** fair value measurement[76](index=76&type=chunk) [NOTE 6 — Debt](index=17&type=section&id=NOTE%206%20%E2%80%94%20DEBT) This note provides information on the company's debt facilities, including revolving credit and term loans - The Company has a **$200.0 million** senior secured asset-based revolving credit facility (**ABL Agreement**) and a **$150.0 million** **Term Loan**, both maturing on August 26, **2027**[77](index=77&type=chunk)[78](index=78&type=chunk) Table: NOTE 6 — Debt Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total availability under ABL Agreement | $110,867 | $124,808 |\n| ABL availability limited by Term Loan covenant | $65,700 | N/A |\n| Current portion of Term Loan | $4,952 | $4,891 |\n| Non-current portion of Term Loan | $128,456 | $130,949 | - **Interest rates** at June 30, **2025**, were between **3.30%** and **5.79%** for the **ABL Agreement** and **9.93%** for the **Term Loan**[88](index=88&type=chunk)[89](index=89&type=chunk) - The Company was in compliance with all debt covenants at June 30, **2025**, including a Total Net Leverage Ratio not exceeding **5.00** to **1.00**[90](index=90&type=chunk)[91](index=91&type=chunk) [NOTE 7 — Derivatives](index=19&type=section&id=NOTE%207%20%E2%80%94%20DERIVATIVES) This note describes the company's use of interest rate swaps and foreign exchange contracts to manage market risks - The Company uses interest rate swaps to manage exposure to interest rate movements and foreign exchange contracts to reduce volatility from currency exchange rates on inventory purchases[92](index=92&type=chunk)[96](index=96&type=chunk)[98](index=98&type=chunk) - **Total outstanding notional value** of interest rate swaps was **$50.0 million** at June 30, **2025**, and the **aggregate gross notional value** of foreign exchange contracts was **$6.1 million**[97](index=97&type=chunk)[98](index=98&type=chunk) Table: NOTE 7 — Derivatives Summary | Derivative Type | Balance Sheet Location | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------- | :--------------------- | :--------------------------- | :------------------------------- | | Foreign exchange contracts (hedging) | Accrued expenses | $385 | $0 |\n| Foreign exchange contracts (hedging) | Prepaid expenses and other current assets | $0 | $256 |\n| Interest rate swaps (non-hedging) | Other long-term liabilities | $430 | $154 |\n| Interest rate swaps (non-hedging) | Other assets | $10 | $379 | - **Mark to market loss** on non-designated interest rate derivatives was **$0.2 million** for the three months and **$0.7 million** for the six months ended June 30, **2025**[103](index=103&type=chunk)[191](index=191&type=chunk)[211](index=211&type=chunk) [NOTE 8 — Stock Compensation](index=21&type=section&id=NOTE%208%20%E2%80%94%20STOCK%20COMPENSATION) This note details the company's stock-based compensation plans and related expenses Table: NOTE 8 — Stock Compensation Summary | Stock Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equity based stock option expense | $64 | $60 | $134 | $110 |\n| Restricted and performance-based stock awards expense | $980 | $984 | $1,973 | $1,733 |\n| Liability based stock option expense | $0 | $(7) | $(1) | $1 |\n| **Total Stock Compensation Expense** | **$1,044** | **$1,037** | **$2,106** | **$1,844** | - As of June 30, **2025**, there were **827,000** stock options outstanding, **889,153** non-vested restricted shares, and **732,172** non-vested performance-based awards (target shares)[105](index=105&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) - **Total unrecognized compensation expense** remaining for restricted and performance-based awards was **$4.776 million** and **$2.606 million**, respectively, as of June 30, **2025**[108](index=108&type=chunk)[110](index=110&type=chunk) [NOTE 9 — Loss Per Common Share](index=23&type=section&id=NOTE%209%20%E2%80%94LOSS%20PER%20COMMON%20SHARE) This note presents the calculation of basic and diluted loss per common share Table: NOTE 9 — Loss Per Common Share Summary | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss – Basic and Diluted (in thousands) | $(39,699) | $(18,167) | $(43,900) | $(24,427) |\n| Weighted-average shares outstanding – Basic (in thousands) | 21,686 | 21,421 | 21,639 | 21,399 |\n| Basic loss per common share | $(1.83) | $(0.85) | $(2.03) | $(1.14) |\n| Diluted loss per common share | $(1.83) | $(0.85) | $(2.03) | $(1.14) | - **Basic and diluted loss per common share** increased significantly to **$(1.83)** for the three months and **$(2.03)** for the six months ended June 30, **2025**, compared to the prior year periods, reflecting the higher **net losses**[115](index=115&type=chunk) - Anti-dilutive securities, totaling **1.583 million** for the three months and **1.500 million** for the six months ended June 30, **2025**, were excluded from diluted EPS calculation[115](index=115&type=chunk) [NOTE 10 — Income Taxes](index=24&type=section&id=NOTE%2010%E2%80%94%20INCOME%20TAXES) This note provides information on the company's income tax benefit/provision and effective tax rates Table: NOTE 10 — Income Taxes Summary | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax benefit (provision) (in thousands) | $2,782 | $57 | $2,924 | $(153) |\n| Effective income tax benefit (provision) rate | 6.5% | 0.3% | 6.2% | (0.7)% | - The **effective tax rate** for Q2 **2025** was **6.5%** (benefit), differing from the **21.0%** federal statutory rate primarily due to a partial valuation allowance on U.S. deferred tax assets resulting from **goodwill impairment**[117](index=117&type=chunk) - The recently enacted One Big Beautiful Bill Act (OBBBA) in the U.S., which includes tax reform provisions, is currently being evaluated for its impact on the Company's financial statements[120](index=120&type=chunk) [NOTE 11 – Business Segments](index=25&type=section&id=NOTE%2011%20%E2%80%93%20BUSINESS%20SEGMENTS) This note presents financial information disaggregated by the company's operating segments - The Company operates in two reportable segments: U.S. (domestic design, marketing, and distribution) and International (sales and distribution primarily in the U.K., EU, and Asia Pacific)[123](index=123&type=chunk) Table: NOTE 11 – Business Segments Summary | Segment Performance (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Net Sales:** | | | | |\n| U.S. | $119,315 | $130,503 | $247,825 | $260,983 |\n| International | $12,547 | $11,163 | $24,122 | $22,925 |\n| **Gross Margin:** | | | | |\n| U.S. | $46,769 | $50,478 | $93,333 | $103,761 |\n| International | $4,070 | $4,072 | $8,143 | $8,336 |\n| **(Loss) income from operations:** | | | | |\n| U.S. | $(29,620) | $9,189 | $(27,722) | $18,631 |\n| International | $(3,328) | $(2,932) | $(6,280) | $(6,021) |\n| Unallocated corporate expenses | $(4,259) | $(5,090) | $(2,106) | $(9,613) | - **U.S. segment operating income** shifted to a **loss** of **$29.62 million** in Q2 **2025** from an income of **$9.19 million** in Q2 **2024**, largely due to the **goodwill impairment** charge[126](index=126&type=chunk) - Unallocated corporate expenses decreased significantly for the six months ended June 30, **2025**, to **$2.11 million** from **$9.61 million**, primarily due to a **$6.4 million** **net legal settlement gain**[126](index=126&type=chunk)[208](index=208&type=chunk) [NOTE 12 — Contingencies](index=28&type=section&id=NOTE%2012%20%E2%80%94%20CONTINGENCIES) This note describes the company's legal proceedings and other contingent liabilities - The Company's subsidiary, WSPR, is involved in the Wallace EPA Matter concerning groundwater contamination in Puerto Rico, with a **reserved liability** of **$5.4 million** as of June 30, **2025**, for remedial design and action[133](index=133&type=chunk)[141](index=141&type=chunk) - A **net legal settlement gain** of **$6.4 million** was recognized in Q1 **2025** from a **2015** legal action related to a prior acquisition, which consisted of a **$7.0 million** settlement less **$0.6 million** in legal fees[142](index=142&type=chunk) [NOTE 13 — Other](index=30&type=section&id=NOTE%2013%20%E2%80%94%20OTHER) This note includes information on dividends, stock repurchase programs, and supplemental cash flow data Table: NOTE 13 — Other Summary | Dividend per share | Date declared | Date of record | Payment date | | :----------------- | :------------ | :------------- | :----------- | | $0.0425 | 3/11/2025 | 5/1/2025 | 5/15/2025 |\n| $0.0425 | 6/18/2025 | 8/1/2025 | 8/15/2025 | - The Company paid **$1.9 million** in dividends during the six months ended June 30, **2025**[146](index=146&type=chunk) - The Board authorized a **$20.0 million** stock repurchase program on March 14, **2022**, with **$11.1 million** remaining available as of June 30, **2025**; no shares were repurchased in the first six months of **2025**[148](index=148&type=chunk)[249](index=249&type=chunk) Table: NOTE 13 — Other Summary | Supplemental Cash Flow (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Cash paid for interest | $8,922 | $9,853 |\n| Cash paid for taxes, net of refunds | $2,980 | $4,193 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including an overview of the business, recent developments, segment performance, and liquidity. It highlights key financial trends, the impact of tariffs, and strategic initiatives [Forward-Looking Statements](index=32&type=section&id=Forward-Looking%20Statements) This section highlights the inherent risks and uncertainties associated with forward-looking statements in the report - The report contains forward-looking statements subject to risks and uncertainties, including macroeconomic conditions, supply chain costs, tariffs, indebtedness, market competition, and geopolitical conditions[152](index=152&type=chunk)[153](index=153&type=chunk)[156](index=156&type=chunk) [About the Company](index=33&type=section&id=About%20the%20Company) This section provides an overview of the company's business, product categories, brands, and growth strategy - The Company designs, sources, and sells branded kitchenware, tableware, and other home products across three categories: Kitchenware, Tableware, and Home Solutions[159](index=159&type=chunk) - Key brands include Farberware, KitchenAid, Mikasa, Taylor, Pfaltzgraff, Built NY, S'well, Fred & Friends, KitchenCraft, Rabbit, Kamenstein, and Dolly[160](index=160&type=chunk) - Growth strategy focuses on expanding product offerings, developing existing brands, acquiring new brands, and establishing new product categories, supported by in-house design and development[160](index=160&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) This section outlines recent significant events impacting the company, including tariffs, facility relocation, and strategic initiatives - New U.S. tariffs on imports from China (**145%** initially, reduced to **30%**) and universal/reciprocal tariffs are impacting the Company's supply chain and cost structure, leading to mitigation efforts like price negotiations and import diversification[161](index=161&type=chunk)[162](index=162&type=chunk) - The Company is relocating its east coast distribution facility to Hagerstown, Maryland, incurring up to **$7.0 million** in one-time exit costs (**2025-2026**) and **$7.0 million** in relocation costs (**2026**), but expects **$13.1 million** in tax abatements and incentives[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - Project Concord, launched in January **2025**, aims to propel growth and streamline the International segment's cost structure, including a workforce reorganization in July **2025** with estimated severance expenses of **$0.3 million**[166](index=166&type=chunk) - The One Big Beautiful Bill Act (OBBBA), enacted in July **2025**, introduces tax reform provisions that the Company is currently evaluating for financial statement impact[167](index=167&type=chunk) [Business Segments](index=34&type=section&id=Business%20Segments) This section describes the company's operational structure across its U.S. and International business segments - The Company operates in two reportable segments: U.S. (domestic business) and International (U.K., European Union, and Asia Pacific)[168](index=168&type=chunk) [Seasonality](index=34&type=section&id=Seasonality) This section explains the seasonal nature of the company's business operations and its impact on sales and inventory - The Company's business is seasonal, with most sales occurring in the third and fourth quarters (**58%** and **57%** of total annual **net sales** in **2024** and **2023**, respectively)[170](index=170&type=chunk) - Inventory levels typically increase from June through October in anticipation of the pre-holiday shipping season[170](index=170&type=chunk) [Critical Accounting Estimates](index=34&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to the company's critical accounting estimates since the last annual report - There have been no material changes to the Company's critical accounting estimates discussed in the **2024** Annual Report on Form **10-K**[172](index=172&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over specific periods, highlighting key drivers and changes [Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=36&type=section&id=THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20COMPARED%20TO%20THE%20THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202024) This section compares the company's financial results for the three-month periods ended June 30, 2025 and 2024 Table: Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024 Summary | Metric (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Consolidated Net Sales | $131,862 | $141,666 | $(9,804) | (6.9)% |\n| U.S. Segment Net Sales | $119,315 | $130,503 | $(11,188) | (8.6)% |\n| International Segment Net Sales | $12,547 | $11,163 | $1,384 | 12.5)% |\n| Consolidated Gross Margin | $50,839 | $54,550 | $(3,711) | (6.8)% |\n| Distribution Expenses | $17,314 | $15,052 | $2,262 | 15.0)% |\n| Selling, General and Administrative Expenses | $37,495 | $38,331 | $(836) | (2.2)% |\n| Goodwill Impairment | $33,237 | $0 | $33,237 | N/A |\n| Interest Expense | $5,054 | $5,157 | $(103) | (2.0)% |\n| Mark to Market Loss on Interest Rate Derivatives | $220 | $82 | $138 | 168.3)% |\n| Loss on Equity Securities | $0 | $14,152 | $(14,152) | (100.0)% |\n| Income Tax Benefit | $2,782 | $57 | $2,725 | 4780.7)% | - **U.S. Kitchenware sales** increased by **2.1%**, while **Tableware and Home Solutions sales** decreased by **19.0%** and **33.8%** respectively, for the three months ended June 30, **2025**[176](index=176&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) - **Consolidated gross margin percentage** remained stable at **38.6%** in Q2 **2025** compared to **38.5%** in Q2 **2024**, with U.S. segment **gross margin** percentage improving due to customer mix[180](index=180&type=chunk) - **Distribution expenses** as a percentage of **net sales** increased to **13.1%** from **10.6%** due to lower shipment volume, higher fixed expenses, new warehouse management system software costs, and increased freight-out expenses[182](index=182&type=chunk)[183](index=183&type=chunk) [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=39&type=section&id=SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20COMPARED%20TO%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030%2C%202024) This section compares the company's financial results for the six-month periods ended June 30, 2025 and 2024 Table: Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024 Summary | Metric (in thousands) | H1 2025 | H1 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Consolidated Net Sales | $271,947 | $283,908 | $(11,961) | (4.2)% |\n| U.S. Segment Net Sales | $247,825 | $260,983 | $(13,158) | (5.1)% |\n| International Segment Net Sales | $24,122 | $22,925 | $1,197 | 5.2)% |\n| Consolidated Gross Margin | $101,476 | $112,097 | $(10,621) | (9.5)% |\n| Distribution Expenses | $35,384 | $31,233 | $4,151 | 13.3)% |\n| Selling, General and Administrative Expenses | $68,963 | $77,867 | $(8,904) | (11.4)% |\n| Goodwill Impairment | $33,237 | $0 | $33,237 | N/A |\n| Interest Expense | $9,969 | $10,771 | $(802) | (7.4)% |\n| Mark to Market Loss on Interest Rate Derivatives | $747 | $256 | $491 | 191.8)% |\n| Loss on Equity Securities | $0 | $14,152 | $(14,152) | (100.0)% |\n| Income Tax Benefit (Provision) | $2,924 | $(153) | $3,077 | N/A |\n| Equity in Losses, net of taxes | $0 | $2,092 | $(2,092) | (100.0)% | - **U.S. Kitchenware sales** decreased by **1.4%**, Tableware by **6.1%**, and Home Solutions by **17.3%** for the six months ended June 30, **2025**[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - **Consolidated gross margin percentage** decreased to **37.3%** in H1 **2025** from **39.5%** in H1 **2024**, primarily due to unfavorable customer and product mix in both U.S. and International segments[200](index=200&type=chunk)[201](index=201&type=chunk) - **Selling, general and administrative expenses** decreased by **11.4%** for the six months ended June 30, **2025**, largely due to a **$6.4 million** **legal settlement gain** and lower incentive compensation[205](index=205&type=chunk)[208](index=208&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's ability to generate and manage cash, including its working capital and debt facilities Table: Liquidity and Capital Resources Summary | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $12,045 | $2,929 |\n| Working capital | $210,100 | $221,800 |\n| Total liquidity | $96,900 | N/A |\n| ABL availability limited by Term Loan covenant | $65,700 | N/A |\n| Available for sale accounts receivable | $19,200 | N/A | - **Inventory turnover** slowed to **1.5 times (241 days)** for the three months ended June 30, **2025**, from **1.8 times (208 days)** in the prior year, due to lower sales and higher inventory purchases to mitigate tariff impacts[218](index=218&type=chunk) - **Adjusted EBITDA** for the trailing twelve months ended June 30, **2025**, was **$50.7 million**[233](index=233&type=chunk) - **Net cash provided by operating activities** increased to **$26.1 million** for the six months ended June 30, **2025**, from **$20.9 million** in the prior year, driven by a **legal settlement gain** and improved accounts receivable collection[246](index=246&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, particularly foreign currency and interest rate fluctuations - No material changes in market risk for foreign currency exchange rates and interest rates from the **2024** Annual Report on Form **10-K**[250](index=250&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and internal controls over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, **2025**[251](index=251&type=chunk) - There were no material changes in the Company's internal controls over financial reporting during the most recent fiscal quarter[252](index=252&type=chunk) [Part II. Other Information](index=49&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, other information, and exhibits [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to detailed disclosures regarding the company's legal and environmental contingencies - Legal proceedings are described in detail in NOTE **12** — CONTINGENCIES of the financial statements[253](index=253&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section updates and highlights significant risks, especially those related to international trade and tariffs - The Company faces significant risks from uncertainty regarding international trade agreements and U.S. trade policies, especially new tariffs on imports from China[255](index=255&type=chunk) - New tariffs are expected to materially impact the business, market share, revenue, and **gross margins**, requiring mitigation actions that may not fully offset the impact[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) This section reports on Rule 10b5-1 trading arrangements by directors and officers - No directors or officers adopted, modified, or terminated Rule **10b5-1** trading arrangements during the fiscal quarter ended June 30, **2025**[258](index=258&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the quarterly report, including certifications and XBRL data - The report includes certifications by the CEO and CFO (Exhibits **31.1**, **31.2**, **32.1**) and Inline XBRL documents (Exhibits **101.INS**, **101.SCH**, **101.DEF**, **101.CAL**, **101.LAB**, **101.PRE**, **104**)[261](index=261&type=chunk) [Signatures](index=52&type=section&id=Signatures) This section contains the official signatures of the company's authorized officers for the report submission - The report is signed by Robert B. Kay, Chief Executive Officer and Director, and Laurence Winoker, Executive Vice President, Treasurer and Chief Financial Officer, on August 7, **2025**[263](index=263&type=chunk)