Core Insights - Lifetime Brands, Inc. is participating in the Oppenheimer 25th Annual Consumer Growth and E-Commerce Conference from June 9-11, 2025 [1] - The CEO Robert Kay and CFO Laurence Winoker will host a fireside chat on June 10, 2025, at 1:30pm ET [2] - Management will be available for one-on-one investor meetings during the conference [3] Company Overview - Lifetime Brands is a leading global designer, developer, and marketer of a wide range of branded consumer products for the home [4] - The company markets products under well-known kitchenware brands such as Farberware, KitchenAid, and Sabatier, as well as tableware and giftware brands like Mikasa and Pfaltzgraff [4] - Lifetime Brands also provides exclusive private label products to major retailers worldwide [4]

Part I [Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This section provides a comprehensive overview of the company's financial performance, condition, and cash flows [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company reported an improved net loss of $4.2 million in Q1 2025, with total assets decreasing and operating cash flow increasing [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $594.6 million as of March 31, 2025, primarily due to reduced accounts receivable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $340,605 | $373,568 | | **Total Assets** | $594,593 | $634,310 | | **Total Current Liabilities** | $124,183 | $151,743 | | **Total Liabilities** | $368,917 | $404,387 | | **Total Stockholders' Equity** | $225,676 | $229,923 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net loss improved to $4.2 million from $6.3 million in Q1 2024, despite slightly lower net sales Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $140,085 | $142,242 | | Gross margin | $50,637 | $57,547 | | Income from operations | $1,099 | $1,830 | | Net Loss | $(4,201) | $(6,260) | | Diluted Loss per Share | $(0.19) | $(0.29) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased to $16.7 million in Q1 2025, leading to a $7.4 million increase in cash and equivalents Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $16,711 | $10,513 | | Net Cash Used in Investing Activities | $(1,573) | $(600) | | Net Cash Used in Financing Activities | $(7,767) | $(21,399) | | **Increase (Decrease) in Cash** | **$7,446** | **$(11,550)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue disaggregation, $63.2 million ABL availability, and a $6.4 million legal settlement gain Net Sales by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | U.S. segment | $128,510 | $130,480 | | International segment | $11,575 | $11,762 | | **Total net sales** | **$140,085** | **$142,242** | - The company recognized a net legal settlement gain of **$6.4 million** in Q1 2025, which consisted of a **$7.0 million** settlement less **$0.6 million** in legal fees[133](index=133&type=chunk) - As of March 31, 2025, the company was in compliance with its debt covenants, with ABL Agreement availability limited to **$63.2 million** by the Term Loan's maximum Total Net Leverage Ratio covenant, despite a total availability of **$99.7 million**[79](index=79&type=chunk)[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A discusses 1.5% net sales decrease, gross margin contraction, improved net loss, new tariffs, and distribution center relocation [Recent Developments](index=32&type=section&id=Recent%20Developments) New 145% tariffs on Chinese imports and east coast distribution facility relocation are key recent developments - As of April 9, 2025, the U.S. imposed an aggregate **145%** tariff on imports from China, which is expected to materially impact the company's supply chain and cost structure[153](index=153&type=chunk) - The company is relocating its east coast distribution facility to Hagerstown, Maryland, expecting to incur up to **$7.0 million** in exit costs, **$10.0 million** in capital expenditures, and **$7.0 million** in one-time relocation costs, offset by **$13.1 million** in tax abatements and incentives[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q1 2025 net sales decreased 1.5%, gross margin contracted, and SG&A fell due to a $6.4 million legal settlement gain Key Operational Metrics (% of Net Sales) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross margin | 36.1% | 40.5% | | Distribution expenses | 12.9% | 11.4% | | SG&A expenses | 22.4% | 27.8% | | Income from operations | 0.8% | 1.3% | - U.S. segment sales decreased by **1.5%**, driven by a **4.8%** decline in the Kitchenware category, partially offset by a **7.0%** increase in the Tableware category[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Unallocated corporate income was **$2.2 million** in Q1 2025, compared to an expense of **$4.5 million** in Q1 2024, primarily driven by a **$6.4 million** net legal settlement gain[178](index=178&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was $89.6 million as of March 31, 2025, with Adjusted EBITDA at $51.0 million for the trailing twelve months Liquidity Position as of March 31, 2025 (in millions) | Source | Amount | | :--- | :--- | | Cash and cash equivalents | $10.4 | | ABL Agreement availability (covenant limited) | $63.2 | | Receivables Purchase Agreement availability | $16.0 | | **Total Liquidity** | **$89.6** | Reconciliation to Adjusted EBITDA (Trailing Twelve Months Ended Mar 31, 2025, in thousands) | Metric | Amount | | :--- | :--- | | Net loss as reported | $(13,106) | | Adjustments (Interest, Taxes, D&A, etc.) | $64,069 | | **Adjusted EBITDA** | **$50,963** | - The company has a **$20.0 million** stock repurchase program with **$11.1 million** remaining available as of March 31, 2025, with no shares repurchased during the quarter[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures since the 2024 Annual Report on Form 10-K disclosures - There were no material changes in market risk for changes in foreign currency exchange rates and interest rates from the information provided in the 2024 Annual Report on Form 10-K[218](index=218&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[219](index=219&type=chunk) - No material changes were made to the company's internal controls over financial reporting during the most recent fiscal quarter[220](index=220&type=chunk) Part II [Other Information](index=41&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, and other disclosures not included in Part I [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 for details on legal proceedings, including an EPA matter and a settled case - For a description of legal proceedings, the report refers to NOTE 12 — CONTINGENCIES in the financial statements[221](index=221&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) New U.S. international trade policy tariffs on Chinese imports pose a material risk to the business - A key risk factor is the uncertainty of international trade agreements, particularly new tariffs on goods imported from China, which are expected to have a material impact on the business[223](index=223&type=chunk) - The company is taking mitigating actions, such as adjusting pricing, product configurations, and inventory management, but warns these may not fully offset the negative impact of the tariffs[225](index=225&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No public share repurchases, but 80,247 shares acquired from employees at $5.18 to cover tax liabilities Issuer Purchases of Equity Securities (March 1 - March 31, 2025) | Period | Total Shares Purchased | Average Price Paid per Share ($) | Shares Purchased as Part of Public Program | Max Value Remaining for Repurchase ($) | | :--- | :--- | :--- | :--- | :--- | | Mar 1 - Mar 31, 2025 | 80,247 | $5.18 | — | $11,140,752 | [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2025[227](index=227&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including CEO/CFO certifications and key agreements - The Exhibit Index lists all documents filed with the report, including required CEO/CFO certifications, a lease agreement dated January 23, 2025, and an amendment to the Shares Subscription Agreement with Grupo Vasconia[229](index=229&type=chunk)

Financial Data and Key Metrics Changes - The net loss for the first quarter of 2025 was $4.2 million or $0.19 per diluted share, compared to a loss of $6.3 million or $0.29 per diluted share in the first quarter of 2024 [21] - Adjusted net loss was $5.3 million for Q1 2025 or $0.25 per diluted share, compared to $3.2 million or $0.15 per diluted share in 2024 [21] - Consolidated sales declined by 1.5% to $140.1 million, with US segment sales also decreasing by 1.5% to $128.5 million [22] - Gross margin decreased to 36.1% from 40.5%, driven by customer and product mix [23] Business Line Data and Key Metrics Changes - The major product line decreases were in kitchenware, largely offset by increases in tableware and home solution products, particularly in warehouse clubs, e-commerce, and the dollar channel [22] - In food service, revenue growth was noted despite delays in product launches and capital projects [14] - International segment sales were approximately flat year over year, with operating results improving due to implemented actions [15] Market Data and Key Metrics Changes - The mass retail channel experienced a pronounced decline, while e-commerce, the dollar channel, and club sales showed strong gains [6] - The Asia Pacific region saw an increase, offset by a small decrease from UK national accounts [22] Company Strategy and Development Direction - The company is transitioning to a geographically distributed sourcing and manufacturing model to mitigate risks from US trade policy changes, aiming to relocate 80% of manufacturing out of China by the end of 2025 [10][11] - Cost management measures have been tightened, with over $10 million in annual costs identified for elimination [17] - The company is actively pursuing M&A opportunities but is being conservative in its approach due to the current environment [18] Management's Comments on Operating Environment and Future Outlook - The management highlighted ongoing economic headwinds and a volatile tariff policy impacting pricing, promotions, and product planning [7] - The company is well-positioned to absorb near-term pressures and aims to emerge stronger when economic trends stabilize [19] - No formal guidance for the full year 2025 was issued due to a lack of visibility in the current environment [20] Other Important Information - The company has a strong balance sheet with liquidity of approximately $90 million at quarter-end [28] - Adjusted EBITDA for the trailing twelve months ended March 31, 2025, was $51 million [22] Q&A Session Summary Question: Can you provide additional numbers regarding the sales decline at mass retail and the sales increase in e-commerce and other channels? - The swing was approximately $15 million [32] Question: Can you give an update on the Dolly Parton program? - Shipments occurred as expected, and the program remains strong with anticipated year-over-year growth [34] Question: What is the magnitude of the planned price increases? - The bulk of the increases is between 6-16%, with the impact on volume currently unknown [36] Question: Why was the decision made not to provide guidance? - The main reason is the lack of visibility in the current environment, making it difficult to provide accurate guidance [44] Question: Why hasn't the transition out of China been completed already? - The company has been ramping up production in other geographies and is actively shipping from multiple locations [48] Question: How does the company expect demand to react to significant price increases? - Historically, the company has seen relatively little impact on demand from price increases, particularly in essential product categories [49] Question: What message would the company convey to shareholders regarding stock performance? - The company believes there is a significant intrinsic value gap and is focused on realizing this value in the stock price [52]

Financial Data and Key Metrics Changes - The net loss for the first quarter of 2025 was $4.2 million, or $0.19 per diluted share, compared to a loss of $6.3 million, or $0.29 per diluted share in the first quarter of 2024 [20] - Adjusted net loss was $5.3 million for Q1 2025, or $0.25 per diluted share, compared to $3.2 million, or $0.15 per diluted share in 2024 [20] - Consolidated sales declined by 1.5% to $140.1 million, with US segment sales also decreasing by 1.5% to $128.5 million [21][22] - Gross margin decreased to 36.1% from 40.5%, driven by customer and product mix [22] Business Line Data and Key Metrics Changes - The major product line decrease was in kitchenware, offset by increases in tableware and home solution products, particularly in warehouse clubs, e-commerce, and the dollar channel [21] - Revenue in the food service segment showed growth despite macro-driven delays in product launches and capital projects [13] - International segment sales were flat year over year, with operating results improving due to implemented actions [14] Market Data and Key Metrics Changes - The Asia Pacific region saw an increase in sales, which was offset by a small decrease from UK national accounts [22] - The mass retail channel experienced a significant sales decline, estimated at around $15 million, while e-commerce, club, and dollar store channels saw increases [30] Company Strategy and Development Direction - The company is transitioning to a geographically distributed sourcing and manufacturing model to mitigate risks from US trade policy changes, aiming to relocate 80% of manufacturing out of China by the end of 2025 [10][19] - Cost management measures have been tightened, with over $10 million in annual costs identified for elimination [15] - The company is actively pursuing M&A opportunities but is being conservative in its approach due to the current economic environment [17] Management's Comments on Operating Environment and Future Outlook - The management highlighted ongoing economic headwinds and a volatile tariff policy affecting the retail environment, leading to slower purchasing and cautious reordering [6][18] - The decision to withhold formal guidance for the full year 2025 was made due to a lack of visibility in the current environment [19][41] - Management expressed confidence in the company's positioning and resilience, stating that they are well-prepared to absorb near-term pressures [18] Other Important Information - The company has taken early actions to build import inventory from China ahead of tariff increases, which has helped mitigate some risks [12] - The transition to a new distribution facility in Maryland is on track, expected to generate long-term efficiencies despite short-term financial impacts [16] Q&A Session Summary Question: Can you provide additional numbers regarding the sales decline at mass retail and the increase in e-commerce? - The sales decline in the mass retail channel was approximately $15 million [30] Question: Can you give an update on the Dolly Parton shipments? - Shipments occurred as expected, and the program remains strong with anticipated year-over-year growth [32] Question: What is the magnitude of the planned price increases? - Price increases are expected to be between 6-16%, with some items subject to higher increases due to tariffs [34] Question: Why did the company decide not to provide guidance? - The decision was based on a lack of visibility in the current environment, making it difficult to provide accurate guidance [41][42] Question: What is the company's strategy for moving out of China? - The company is actively ramping up production in Mexico and other regions, with positive feedback from retail customers regarding the transition [46] Question: How does the company expect demand to react to significant price increases? - Historically, the company's products have shown resilience in high-cost environments, with minimal impact on demand [47] Question: What message does the company have for shareholders regarding stock performance? - The company believes there is a significant intrinsic value gap and is focused on realizing this value in the stock price [50]

Core Viewpoint - Lifetime Brands (LCUT) reported a quarterly loss of $0.25 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.14, indicating a significant earnings surprise of -78.57% [1][2] Financial Performance - The company posted revenues of $140.09 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 3.07% and down from $142.24 million a year ago [2] - Over the last four quarters, Lifetime Brands has surpassed consensus EPS estimates only once [2] - The company's shares have declined approximately 44.3% since the beginning of the year, compared to a -4.3% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.14 on revenues of $139.54 million, and for the current fiscal year, it is $0.30 on revenues of $677.27 million [7] - The estimate revisions trend for Lifetime Brands is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Discretionary industry, to which Lifetime Brands belongs, is currently ranked in the bottom 24% of over 250 Zacks industries, indicating potential challenges ahead [8]

[First Quarter 2025 Financial Results](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results) This report details Lifetime Brands' financial performance for the first quarter of 2025, including management commentary, financial highlights, and reconciliations [Management Commentary](index=1&type=section&id=Management%20Commentary) Q1 2025 sales declined slightly with lower gross margin, prompting expense controls and a strategic shift of manufacturing out of China - First quarter sales were slightly down, with a notable decrease in gross margin attributed to customer and product mix[2](index=2&type=chunk) - Sales declines in the mass channel were offset by gains in e-commerce, the dollar channel, and the club channel[2](index=2&type=chunk) - The company is tightening controls on variable expenses, with the impact expected in the second half of the year[2](index=2&type=chunk) - To mitigate risks and diversify, the company plans to move the majority of its manufacturing out of China by the end of 2025 to countries including Malaysia, Indonesia, Vietnam, Cambodia, India, and Mexico[3](index=3&type=chunk) [First Quarter Financial Highlights](index=1&type=section&id=First%20Quarter%20Financial%20Highlights) Q1 2025 net sales decreased to $140.1 million, with a net loss of $4.2 million, improved by a legal settlement, while TTM Adjusted EBITDA reached $51.0 million Q1 2025 vs Q1 2024 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Sales** | $140.1 million | $142.2 million | | **Gross Margin** | $50.6 million (36.1%) | $57.5 million (40.5%) | | **Income from Operations** | $1.1 million | $1.8 million | | **Net Loss** | $(4.2) million | $(6.3) million | | **Diluted Loss Per Share** | $(0.19) | $(0.29) | - Selling, general and administrative (SG&A) expenses decreased **20.3%** to **$31.5 million**, primarily due to a net legal settlement gain of **$6.4 million**[5](index=5&type=chunk) - Adjusted EBITDA for the trailing twelve months ended March 31, 2025, was **$51.0 million**[8](index=8&type=chunk) - Total liquidity as of March 31, 2025, was **$89.6 million**, comprising cash, ABL availability, and available funding under the Receivables Purchase Agreement[8](index=8&type=chunk) [2025 Outlook](index=2&type=section&id=Full%20Year%202025%20Guidance%20%26%20Investor%20Day) The company withdrew its 2025 financial guidance due to macroeconomic shifts, while Project Concord remains on track and Investor Day is postponed - The Company has decided not to provide financial guidance for the Full Year 2025 due to the shifting macro environment[10](index=10&type=chunk) - Project Concord, aimed at improving the financial results of the International segment, remains on track[10](index=10&type=chunk) - The company has decided to pause its planned Investor Day[11](index=11&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the condensed consolidated statements of operations, balance sheets, and cash flows for the period [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 net sales decreased to $140.1 million with lower gross margin, resulting in a net loss of $4.2 million, an improvement from prior year Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | **2025** | **2024** | | **Net sales** | $140,085 | $142,242 | | Cost of sales | 89,448 | 84,695 | | **Gross margin** | **50,637** | **57,547** | | Distribution expenses | 18,070 | 16,181 | | Selling, general and administrative expenses | 31,468 | 39,536 | | **Income from operations** | **1,099** | **1,830** | | Interest expense | (4,915) | (5,614) | | Mark to market loss on interest rate derivatives | (527) | (174) | | **Loss before income taxes and equity in losses** | **(4,343)** | **(3,958)** | | Income tax benefit (provision) | 142 | (210) | | Equity in losses, net of taxes | — | (2,092) | | **NET LOSS** | **$(4,201)** | **$(6,260)** | | **BASIC/DILUTED LOSS PER COMMON SHARE** | **$(0.19)** | **$(0.29)** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets and liabilities decreased, with total stockholders' equity slightly lower Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :---: | :---: | | **TOTAL CURRENT ASSETS** | **$340,605** | **$373,568** | | **TOTAL ASSETS** | **$594,593** | **$634,310** | | **TOTAL CURRENT LIABILITIES** | **$124,183** | **$151,743** | | Revolving Credit Facility | 39,328 | 42,693 | | Term Loan | 129,707 | 130,949 | | **TOTAL LIABILITIES** | **$368,917** | **$404,387** | | **TOTAL STOCKHOLDERS' EQUITY** | **$225,676** | **$229,923** | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$594,593** | **$634,310** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 saw improved cash from operating activities at $16.7 million, leading to a $7.4 million increase in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | **2025** | **2024** | | **Net loss** | $(4,201) | $(6,260) | | **NET CASH PROVIDED BY OPERATING ACTIVITIES** | **$16,711** | **$10,513** | | **NET CASH USED IN INVESTING ACTIVITIES** | **$(1,573)** | **$(600)** | | **NET CASH USED IN FINANCING ACTIVITIES** | **$(7,767)** | **$(21,399)** | | **INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS** | **$7,446** | **$(11,550)** | | **CASH AND CASH EQUIVALENTS AT END OF PERIOD** | **$10,375** | **$4,639** | [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Operating%20Results) This section reconciles reported GAAP financial measures to non-GAAP adjusted figures for a clearer operational view [Adjusted EBITDA Reconciliation](index=8&type=section&id=Adjusted%20EBITDA%20Reconciliation) Trailing twelve months Adjusted EBITDA reached $51.0 million, derived by adjusting net loss for various non-cash and non-recurring items Adjusted EBITDA for the twelve months ended March 31, 2025 (in thousands) | | Twelve Months Ended March 31, 2025 | | :--- | :---: | | Net loss as reported | $(13,106) | | Loss on equity securities | 14,152 | | Income tax provision | 2,979 | | Interest expense | 21,509 | | Depreciation and amortization | 23,073 | | Mark to market loss on interest rate derivatives | 819 | | Stock compensation expense | 4,175 | | Legal settlement gain, net | (4,578) | | Acquisition related expenses | 994 | | Warehouse redesign expenses | 946 | | **Adjusted EBITDA** | **$50,963** | [Adjusted Net Loss and Adjusted Diluted Loss per Share Reconciliation](index=9&type=section&id=Adjusted%20Net%20Loss%20and%20Adjusted%20Diluted%20Loss%20per%20Share%20Reconciliation) Q1 2025 adjusted net loss was $5.3 million, or ($0.25) per share, compared to $3.2 million, or ($0.15) per share, in Q1 2024 Adjusted Net Loss Reconciliation (in thousands) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | **2025** | **2024** | | Net loss as reported | $(4,201) | $(6,260) | | Adjustments: | | | | Acquisition intangible amortization expense | 4,365 | 3,778 | | Legal settlement gain, net | (6,400) | — | | Mark to market loss on interest rate derivatives | 527 | 174 | | Other adjustments | — | 113 | | Income tax effect on adjustments | 395 | (998) | | **Adjusted net loss** | **$(5,314)** | **$(3,193)** | | **Adjusted diluted loss per common share** | **$(0.25)** | **$(0.15)** | [Adjusted (Loss) Income from Operations Reconciliation](index=9&type=section&id=Adjusted%20%28Loss%29%20Income%20from%20Operations%20Reconciliation) Q1 2025 adjusted loss from operations was $0.9 million, a decline from $5.7 million adjusted income in Q1 2024 Adjusted (Loss) Income from Operations Reconciliation (in thousands) | | Three Months Ended March 31, | | :--- | :---: | :---: | | | **2025** | **2024** | | Income from operations | $1,099 | $1,830 | | Adjustments: | | | | Acquisition intangible amortization expense | 4,365 | 3,778 | | Legal settlement gain, net | (6,400) | — | | Acquisition related expenses | — | 95 | | Warehouse redesign expenses | — | 18 | | **Adjusted (loss) income from operations** | **$(936)** | **$5,721** | [Constant Currency Net Sales Reconciliation](index=10&type=section&id=Constant%20Currency%20Net%20Sales%20Reconciliation) Q1 2025 total net sales decreased by 1.4% on a constant currency basis, with U.S. and International segments showing declines Constant Currency Net Sales Year-Over-Year Change (Q1 2025) | Segment | As Reported Change | Constant Currency Change | | :--- | :---: | :---: | | U.S. | (1.5)% | (1.5)% | | International | (1.6)% | (0.2)% | | **Total net sales** | **(1.5)%** | **(1.4)%** |

Core Insights - Lifetime Brands, Inc. reported consolidated net sales of $140.1 million for the first quarter of 2025, a decrease of $2.1 million or 1.5% compared to $142.2 million in the same period of 2024 [5][19] - The company experienced a gross margin of $50.6 million, or 36.1%, down from $57.5 million, or 40.5%, in the prior year [6][19] - Adjusted EBITDA for the trailing twelve months ended March 31, 2025, was $51.0 million [8] Financial Performance - The decrease in sales was attributed to a decline in the mass channel, which was affected by slower retail sales and overstocking at key retailers [3][4] - Selling, general and administrative expenses decreased by $8.0 million, or 20.3%, to $31.5 million, which included a net legal settlement gain of $6.4 million [6][19] - The net loss for the quarter was $(4.2) million, or $(0.19) per diluted share, an improvement from a net loss of $(6.3) million, or $(0.29) per diluted share, in the same period last year [7][19] Strategic Initiatives - The company is moving the majority of its manufacturing out of China to countries like Malaysia, Indonesia, Vietnam, Cambodia, India, and Mexico by the end of 2025 to mitigate risks associated with geopolitical factors and tariffs [4][10] - Project Concord, a comprehensive plan aimed at improving financial results in the International segment, is on track [10] Market Conditions - The current economic environment is characterized by uncertainty, which is expected to continue impacting the consumer products industry [4] - The company has tightened controls on variable expenses in response to a slowdown in consumer demand [3][4] Liquidity and Guidance - As of March 31, 2025, the company had liquidity of $89.6 million, consisting of $10.4 million in cash and cash equivalents and $63.2 million available under the ABL Agreement [9] - The company has opted not to provide financial guidance for the full year 2025 due to the shifting macro environment [10]

Core Viewpoint - Lifetime Brands, Inc. is set to release its first quarter 2025 financial results on May 8, 2025, before market open, followed by a conference call to discuss the results at 11:00 a.m. Eastern Time [1]. Company Overview - Lifetime Brands, Inc. 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 [4]. - 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 [4]. Conference Call Details - Investors and analysts can access the live conference call by dialing 1-877-451-6152 (USA) or 1-201-389-0879 (International) [2]. - A live webcast of the conference call will be available through the investor relations website [2]. - For those unable to attend the live broadcast, an audio replay will be accessible on the investor relations website or via telephone replay [3].

Part I [Business](index=7&type=section&id=Item%201.%20Business) Lifetime Brands, Inc. designs, sources, and sells kitchenware, tableware, and home products through U.S. and International segments, relying on global sourcing and diverse customer channels, with seasonal sales concentrated in Q3 and Q4 - The company's business is divided into three main product categories: Kitchenware, Tableware, and Home Solutions[33](index=33&type=chunk) Top Brands and Product Categories | Brand | Licensed/Owned | Product Category | | :--- | :--- | :--- | | Farberware® | (1) Licensed | Kitchenware | | Mikasa® | Owned | Tableware and Home Solutions | | KitchenAid® | Licensed | Kitchenware | | Taylor® | Owned | Kitchenware and Home Solutions | | Pfaltzgraff® | Owned | Kitchenware, Tableware and Home Solutions | | Fred® & Friends | Owned | Kitchenware | | Kamenstein® | Owned | Kitchenware | | BUILT NY® | Owned | Home Solutions | | S'well® | Owned | Home Solutions | | Rabbit® | Owned | Kitchenware | - The company operates through two reportable segments: U.S. and International, with the U.S. segment handling domestic operations and the International segment covering business primarily in the U.K., E.U., and Asia Pacific[40](index=40&type=chunk)[166](index=166&type=chunk) Key Customer Sales Concentration (2022-2024) | Customer | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Walmart | 19% | 21% | 19% | | Costco | 11% | 11% | 13% | | Amazon | 13% | 11% | 11% | - The business is seasonal, with **58% of total annual net sales in 2024** occurring in the third and fourth quarters, leading to increased inventory levels from June to October[63](index=63&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces macroeconomic, financial, customer, supply chain, intellectual property, and operational risks, including substantial debt, customer concentration, and reliance on international suppliers and key licenses - Macroeconomic risks include adverse effects from market conditions, inflation, and the imposition of duties and tariffs by governments, which could significantly increase product costs[65](index=65&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - The company has substantial indebtedness of **$185.2 million as of December 31, 2024**, and its debt agreements contain financial covenants, such as a maximum Total Net Leverage Ratio, which could limit its operational flexibility[71](index=71&type=chunk)[75](index=75&type=chunk) - A significant portion of sales is concentrated with three major customers: **Walmart (19%)**, **Costco (11%)**, and **Amazon (13%) in 2024**, where a material reduction in sales could have a significant adverse effect[98](index=98&type=chunk)[99](index=99&type=chunk) - The company relies heavily on international suppliers, primarily in China, subjecting it to geopolitical, regulatory, and economic risks, including supply chain disruptions from conflicts in regions like the Red Sea[106](index=106&type=chunk) - The business is dependent on key licenses, with the Farberware® license representing a material portion of sales and expiring in 2195 (subject to earlier termination), and the KitchenAid® license expiring in December 2026[113](index=113&type=chunk)[115](index=115&type=chunk) - The company is subject to cybersecurity risks and must comply with complex data protection regulations like GDPR and the California Consumer Privacy Act, where a failure or compromise of its IT systems could disrupt business and cause losses[131](index=131&type=chunk)[132](index=132&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[141](index=141&type=chunk) [Cybersecurity](index=26&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risk management is integrated into the company's ERM, overseen by the Board, with day-to-day management by the Infrastructure Director, and supported by third-party experts - Cybersecurity risk management is integrated into the company's broader enterprise risk management (ERM) through defined training and incident response plans[144](index=144&type=chunk) - The full Board of Directors is responsible for overseeing cybersecurity risk management, with regular updates from the EVP, Global Supply Chain & Import[146](index=146&type=chunk) - The company engages third-party experts, including a Security Operations Center (SOC) and Endpoint Detection and Response (EDR) providers, to assist in evaluating and detecting security risks[148](index=148&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company utilizes owned and leased properties for operations, including key distribution centers, and plans to relocate its primary East Coast distribution facility to Hagerstown, Maryland by Q2 2026 Principal Properties as of December 31, 2024 | Location | Description | Size (sq ft) | Owned/Leased | | :--- | :--- | :--- | :--- | | Rialto, California | West Coast warehouse and distribution facility | 703,000 | Leased | | Robbinsville, New Jersey | Principal East Coast warehouse and distribution facility | 700,000 | Leased | | Aston, England | Offices, showroom, warehouse and distribution facility | 250,000 | Leased | | Winchendon, Massachusetts | Warehouse, distribution, and spice packing | 175,000 | Owned | | Garden City, New York | Corporate headquarters/main showroom | 159,000 | Leased | - In January 2025, the company entered a lease for a new primary east coast distribution facility in Hagerstown, Maryland, which will replace the existing Robbinsville, New Jersey facility whose lease expires in November 2026[152](index=152&type=chunk) [Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding the company's legal proceedings is incorporated by reference from Note 13 of the consolidated financial statements - For a description of legal proceedings, refer to NOTE 13 — COMMITMENTS AND CONTINGENCIES in the consolidated financial statements[154](index=154&type=chunk) [Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[155](index=155&type=chunk) Part II [Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "LCUT", with approximately 3,782 record holders, and the Board intends to continue paying cash dividends - The company's common stock trades on the Nasdaq Global Select Market under the symbol "**LCUT**"[157](index=157&type=chunk) - As of February 28, 2025, there were approximately **3,782 record holders** of the company's common stock[158](index=158&type=chunk) - The Board of Directors intends to continue paying cash dividends for the foreseeable future, but this is subject to change at their discretion[159](index=159&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2024, net sales slightly decreased to $683.0 million, gross margin improved to 38.2%, but a net loss of $15.2 million was recorded, significantly impacted by a non-cash loss on an equity investment [Results of Operations (2024 vs 2023)](index=33&type=section&id=Results%20of%20Operations%20(2024%20vs%202023)) For 2024, consolidated net sales decreased by 0.5% to $683.0 million, gross margin improved to 38.2%, but a net loss of $15.2 million was reported, primarily due to a $14.2 million non-cash loss on equity securities Net Sales Performance (2024 vs 2023) | Metric | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | **Consolidated Net Sales** | **$683.0M** | **$686.7M** | **-0.5%** | | U.S. Segment Sales | $627.2M | $633.1M | -0.9% | | International Segment Sales | $55.8M | $53.6M | +4.1% | - Gross margin increased to **38.2% in 2024** from 37.1% in 2023, primarily due to lower inbound freight costs and a favorable product mix in the U.S. segment, and lower inventory reserves in the International segment[190](index=190&type=chunk)[191](index=191&type=chunk) - A non-cash loss of **$14.2 million** was recorded in Q2 2024 after the company lost significant influence over its investment in Vasconia and discontinued the equity method of accounting, reducing the investment to its fair value[203](index=203&type=chunk) - The effective tax rate for 2024 was **(34.2)%**, reflecting tax expense on a pretax financial reporting loss, compared to 59.4% for 2023[204](index=204&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in goodwill and intangible asset impairment testing, with the U.S. reporting unit's fair value exceeding carrying value by 5.4% in 2024, and revenue recognized upon transfer of control - Goodwill and indefinite-lived intangible assets are tested for impairment annually on October 1, with the 2024 test for the U.S. reporting unit's goodwill showing its fair value exceeded its carrying value by **5.4%**[208](index=208&type=chunk)[216](index=216&type=chunk) - Following the October 1, 2024 impairment analysis, a trade name previously classified as indefinite-lived was reclassified to a finite-lived asset and will be amortized over an estimated useful life of **15 years**[218](index=218&type=chunk) - Revenue is recognized when control transfers to the customer, typically upon shipment (FOB Shipping Point), with net sales reduced by variable consideration, which includes estimates for sales incentives, promotions, and returns[220](index=220&type=chunk)[221](index=221&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, total liquidity was $111.7 million, with net cash from operating activities decreasing to $18.6 million, and significant future cash requirements for debt service and distribution facility relocation - Total liquidity was **$111.7 million** as of December 31, 2024, consisting of **$2.9 million in cash**, **$82.8 million available** under the ABL Agreement, and **$26.0 million** under the Receivables Purchase Agreement[229](index=229&type=chunk) - Net cash from operating activities decreased significantly to **$18.6 million in 2024** from $56.4 million in 2023, attributed to higher inventory purchases and timing of accounts payable[264](index=264&type=chunk) Adjusted EBITDA Reconciliation (Non-GAAP) | (in thousands) | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net loss as reported | $(15,165) | $(8,412) | | Loss on equity securities | 14,152 | — | | Equity in losses, net of taxes | 2,092 | 12,665 | | Income tax provision | 3,331 | 6,222 | | Interest expense | 22,208 | 21,728 | | Depreciation and amortization | 22,314 | 19,571 | | Other adjustments | 6,439 | 5,534 | | **Adjusted EBITDA** | **$55,371** | **$57,308** | - The company plans to relocate its east coast distribution center to Hagerstown, MD, which will require approximately **$10.0 million in capital expenditures** and up to **$14.0 million in one-time exit and relocation costs**[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and foreign currency risks, with a hypothetical 10% exchange rate change impacting SG&A by $0.8 million and a 100 basis point interest rate increase raising annual interest expense by $2.2 million - The company is exposed to foreign currency risk, primarily from sales denominated in U.K. pounds, Euros, and Canadian dollars, where a hypothetical **10% change in exchange rates** would result in an approximate **$0.8 million change in SG&A expenses**[276](index=276&type=chunk) - The company is exposed to interest rate risk on its variable-rate debt, and as of December 31, 2024, a hypothetical **100 basis point increase in variable rates** would increase annual interest expense by approximately **$2.2 million**[278](index=278&type=chunk) - To manage risk, the company uses interest rate swaps with a total notional value of **$75.0 million** and foreign exchange forward contracts with a notional value of **$8.0 million** as of December 31, 2024[277](index=277&type=chunk)[278](index=278&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes during the quarter - The CEO and CFO concluded that as of December 31, 2024, the company's disclosure controls and procedures were effective[283](index=283&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[284](index=284&type=chunk) - Management's report on internal control over financial reporting concluded that the controls were effective as of December 31, 2024, based on the COSO 2013 framework, and this assessment was audited by Ernst & Young LLP, which issued an unqualified opinion[289](index=289&type=chunk)[290](index=290&type=chunk)[293](index=293&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=49&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section includes consolidated financial statements, independent auditor's report, and detailed notes covering significant accounting policies, revenue, debt, derivatives, and contingencies [Financial Statements](index=58&type=section&id=Financial%20Statements) The consolidated financial statements for 2024 show total assets of $634.3 million, a net loss of $15.2 million, and a decrease in cash to $2.9 million, with total stockholders' equity at $229.9 million Consolidated Statement of Operations Highlights (in thousands) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net sales | $682,952 | $686,683 | $727,662 | | Gross margin | $260,703 | $254,639 | $260,316 | | Income from operations | $27,084 | $31,941 | $24,263 | | **Net Loss** | **$(15,165)** | **$(8,412)** | **$(6,166)** | | Diluted Loss Per Share | $(0.71) | $(0.40) | $(0.29) | Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $373,568 | $376,355 | | **Total Assets** | **$634,310** | **$667,142** | | Total Current Liabilities | $151,743 | $151,968 | | Total Debt (Revolver + Term Loan) | $173,642 | $196,229 | | **Total Stockholders' Equity** | **$229,923** | **$230,879** | Consolidated Cash Flow Highlights (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $18,569 | $56,431 | | Net Cash from Investing Activities | $(2,227) | $(2,801) | | Net Cash from Financing Activities | $(29,490) | $(61,062) | | **Decrease in Cash** | **$(13,260)** | **$(7,409)** | [Notes to Financial Statements](index=63&type=section&id=Notes%20to%20Financial%20Statements) The notes detail revenue disaggregation, debt covenants, derivative use, goodwill impairment, the $14.2 million loss on Vasconia investment, and a $5.4 million liability for the Wallace EPA matter Net Sales by Segment (in thousands) | Segment | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | U.S. segment | $627,202 | $633,079 | $669,179 | | International segment | $55,750 | $53,604 | $58,483 | | **Total net sales** | **$682,952** | **$686,683** | **$727,662** | - In Q2 2024, the company lost significant influence over its investment in Grupo Vasconia S.A.B, leading to the discontinuation of the equity method of accounting and a non-cash loss of **$14.2 million** to reduce the investment to its fair value[422](index=422&type=chunk) - As of December 31, 2024, the company was in compliance with all covenants of its Debt Agreements, which include a maximum Total Net Leverage Ratio of **5.00 to 1.00**[453](index=453&type=chunk)[454](index=454&type=chunk) - The company has a remaining liability of **$5.4 million** as of December 31, 2024, related to the San Germán Ground Water Contamination site (Wallace EPA Matter)[532](index=532&type=chunk) - In February 2025, the company received a net settlement of **$6.4 million** related to a legal action commenced in 2015 by Taylor Precision Products, Inc., with this gain to be recognized in Q1 2025[533](index=533&type=chunk)

Financial Data and Key Metrics Changes - The company reported a 6% increase in net sales for Q4 2024, reaching $215 million compared to $203 million in the same period last year [7][39] - Gross margin expanded by 130 basis points to 37.7% from 36.4% year-over-year [41] - Net income for Q4 2024 was $8.9 million or $0.41 per diluted share, up from $2.7 million or $0.13 per diluted share in Q4 2023 [38] Business Line Data and Key Metrics Changes - US segment sales increased by 5.8% to $196 million, driven by strong online sales and seasonal demand [39] - International segment sales rose by 7.2% to $19.2 million, supported by e-commerce growth and new regional brand launches [40][16] - E-commerce sales accounted for 24% of total sales in Q4, with US e-commerce sales growing by 10% year-over-year [10][11] Market Data and Key Metrics Changes - The company experienced a decline in the mass channel, particularly affecting KitchenAid products, which impacted overall performance [51] - The international business showed positive momentum in Europe and Asia Pacific, although UK markets remained soft [19][20] Company Strategy and Development Direction - The company is focusing on organic growth through the Dolly Parton program, which is expected to generate $4 million in incremental sales in Q1 2025 [13][15] - Project Concorde was launched to accelerate international business profitability and streamline operations [33][34] - The company is actively pursuing M&A opportunities in new product adjacencies and food services, with a focus on maintaining financial discipline [23][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a cautious consumer environment due to macroeconomic factors and inflation but expressed confidence in the resilience of the business model [12] - The company expects to achieve breakeven in the international segment by 2026, with significant improvements anticipated in 2025 [58][60] - Management highlighted the importance of adapting to tariff changes and reducing dependency on China-sourced products [30][64] Other Important Information - The company announced a strategic relocation of its East Coast distribution center to Maryland, which is expected to enhance operational efficiency [25][28] - The effective tax rate for the full year 2024 was reported at 75.5%, influenced by foreign losses and local income taxes [44] Q&A Session Summary Question: Can you provide more detail about the mass channel softness? - Management noted a loss of market share in the KitchenAid side, which affected performance, but they expect to rebound [51] Question: What is the update on your exposure to China regarding tariffs? - The company is working to reduce its production dependency on China, aiming to move the majority of production out by the end of 2025 [55][64] Question: What is the expected operating loss for the international segment? - The EBITDA loss for the international segment was just under $10 million, with a goal to reach breakeven by 2026 [59][58] Question: Can you quantify your tariff exposure? - The company is looking to reduce its production in China from 75% to below 50% by the end of the year [64] Question: What brands performed well last year? - Brands like Makasa and Farberware saw growth, while Taylor and False Graph experienced declines, with plans to revitalize the lagging brands [72][74]