10-Q 1 lcut-20220630.htm 10-Q lcut-20220630
false2022Q2--12-31000087439600008743962022-01-012022-06-3000008743962022-07-31xbrli:shares00008743962022-06-30iso4217:USD00008743962021-12-310000874396us-gaap:SeriesAPreferredStockMember2022-06-30iso4217:USDxbrli:shares0000874396us-gaap:SeriesBPreferredStockMember2022-06-300000874396us-gaap:SeriesBPreferredStockMember2021-12-310000874396us-gaap:SeriesAPreferredStockMember2021-12-3100008743962022-04-012022-06-3000008743962021-04-012021-06-3000008743962021-01-012021-06-300000874396us-gaap:CommonStockMember2021-12-310000874396us-gaap:AdditionalPaidInCapitalMember2021-12-310000874396us-gaap:RetainedEarningsMember2021-12-310000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000874396us-gaap:RetainedEarningsMember2022-01-012022-03-3100008743962022-01-012022-03-310000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000874396us-gaap:CommonStockMember2022-01-012022-03-310000874396us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310000874396us-gaap:CommonStockMember2022-03-310000874396us-gaap:AdditionalPaidInCapitalMember2022-03-310000874396us-gaap:RetainedEarningsMember2022-03-310000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100008743962022-03-310000874396us-gaap:RetainedEarningsMember2022-04-012022-06-300000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300000874396us-gaap:CommonStockMember2022-04-012022-06-300000874396us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300000874396us-gaap:CommonStockMember2022-06-300000874396us-gaap:AdditionalPaidInCapitalMember2022-06-300000874396us-gaap:RetainedEarningsMember2022-06-300000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000874396us-gaap:CommonStockMember2020-12-310000874396us-gaap:AdditionalPaidInCapitalMember2020-12-310000874396us-gaap:RetainedEarningsMember2020-12-310000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100008743962020-12-310000874396us-gaap:RetainedEarningsMember2021-01-012021-03-3100008743962021-01-012021-03-310000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000874396us-gaap:CommonStockMember2021-01-012021-03-310000874396us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310000874396us-gaap:CommonStockMember2021-03-310000874396us-gaap:AdditionalPaidInCapitalMember2021-03-310000874396us-gaap:RetainedEarningsMember2021-03-310000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100008743962021-03-310000874396us-gaap:RetainedEarningsMember2021-04-012021-06-300000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300000874396us-gaap:CommonStockMember2021-04-012021-06-300000874396us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300000874396us-gaap:CommonStockMember2021-06-300000874396us-gaap:AdditionalPaidInCapitalMember2021-06-300000874396us-gaap:RetainedEarningsMember2021-06-300000874396us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000008743962021-06-300000874396lcut:SwellMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMember2021-01-012021-06-300000874396lcut:TermLoanMember2022-01-012022-06-300000874396lcut:TermLoanMember2021-01-012021-06-3000008743962021-07-012021-12-31xbrli:pure00008743962020-07-012020-12-310000874396lcut:ReceivablesPurchaseAgreementMember2022-04-012022-06-300000874396lcut:ReceivablesPurchaseAgreementMember2022-01-012022-06-300000874396lcut:ReceivablesPurchaseAgreementMember2021-04-012021-06-300000874396lcut:ReceivablesPurchaseAgreementMember2021-01-012021-06-300000874396lcut:ReceivablesPurchaseAgreementMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012022-06-300000874396lcut:ReceivablesPurchaseAgreementMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-04-012021-06-300000874396lcut:ReceivablesPurchaseAgreementMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-06-300000874396lcut:ReceivablesPurchaseAgreementMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-06-300000874396lcut:ReceivablesPurchaseAgreementMember2022-06-300000874396lcut:ReceivablesPurchaseAgreementMember2021-06-300000874396us-gaap:ShippingAndHandlingMember2022-04-012022-06-300000874396us-gaap:ShippingAndHandlingMember2022-01-012022-06-300000874396us-gaap:ShippingAndHandlingMember2021-04-012021-06-300000874396us-gaap:ShippingAndHandlingMember2021-01-012021-06-300000874396lcut:UnitedStatesSegmentMemberlcut:KitchenwareMember2022-04-012022-06-300000874396lcut:UnitedStatesSegmentMemberlcut:KitchenwareMember2021-04-012021-06-300000874396lcut:UnitedStatesSegmentMemberlcut:KitchenwareMember2022-01-012022-06-300000874396lcut:UnitedStatesSegmentMemberlcut:KitchenwareMember2021-01-012021-06-300000874396lcut:UnitedStatesSegmentMemberlcut:TablewareMember2022-04-012022-06-300000874396lcut:UnitedStatesSegmentMemberlcut:TablewareMember2021-04-012021-06-300000874396lcut:UnitedStatesSegmentMemberlcut:TablewareMember2022-01-012022-06-300000874396lcut:UnitedStatesSegmentMemberlcut:TablewareMember2021-01-012021-06-300000874396lcut:UnitedStatesSegmentMemberlcut:HomeSolutionsMember2022-04-012022-06-300000874396lcut:UnitedStatesSegmentMemberlcut:HomeSolutionsMember2021-04-012021-06-300000874396lcut:UnitedStatesSegmentMemberlcut:HomeSolutionsMember2022-01-012022-06-300000874396lcut:UnitedStatesSegmentMemberlcut:HomeSolutionsMember2021-01-012021-06-300000874396lcut:UnitedStatesSegmentMember2022-04-012022-06-300000874396lcut:UnitedStatesSegmentMember2021-04-012021-06-300000874396lcut:UnitedStatesSegmentMember2022-01-012022-06-300000874396lcut:UnitedStatesSegmentMember2021-01-012021-06-300000874396lcut:InternationalSegmentMember2022-04-012022-06-300000874396lcut:InternationalSegmentMember2021-04-012021-06-300000874396lcut:InternationalSegmentMember2022-01-012022-06-300000874396lcut:InternationalSegmentMember2021-01-012021-06-300000874396country:US2022-04-012022-06-300000874396country:US2021-04-012021-06-300000874396country:US2022-01-012022-06-300000874396country:US2021-01-012021-06-300000874396country:GB2022-04-012022-06-300000874396country:GB2021-04-012021-06-300000874396country:GB2022-01-012022-06-300000874396country:GB2021-01-012021-06-300000874396lcut:RestOfWorldMember2022-04-012022-06-300000874396lcut:RestOfWorldMember2021-04-012021-06-300000874396lcut:RestOfWorldMember2022-01-012022-06-300000874396lcut:RestOfWorldMember2021-01-012021-06-300000874396lcut:SwellMember2022-03-022022-03-020000874396lcut:SwellMember2022-03-0200008743962022-03-022022-03-020000874396us-gaap:TradeNamesMember2022-01-012022-06-300000874396lcut:SwellMember2022-04-012022-06-300000874396lcut:YearAndDayMember2021-02-262021-02-260000874396lcut:YearAndDayMember2021-02-260000874396lcut:GrupoVasconiaSabMember2022-06-300000874396lcut:GrupoVasconiaSabMember2021-06-290000874396lcut:GrupoVasconiaSabMember2021-06-300000874396lcut:GrupoVasconiaSabMember2021-07-290000874396us-gaap:AccumulatedTranslationAdjustmentMemberlcut:GrupoVasconiaSabMember2021-01-012021-06-30iso4217:MXNiso4217:USD0000874396lcut:GrupoVasconiaSabMember2021-12-310000874396lcut:GrupoVasconiaSabMember2022-04-012022-06-300000874396lcut:GrupoVasconiaSabMember2021-04-012021-06-300000874396lcut:GrupoVasconiaSabMembersrt:MinimumMember2022-01-012022-06-300000874396lcut:GrupoVasconiaSabMembersrt:MaximumMember2022-01-012022-06-300000874396lcut:GrupoVasconiaSabMembersrt:MinimumMember2021-01-012021-06-300000874396lcut:GrupoVasconiaSabMembersrt:MaximumMember2021-01-012021-06-300000874396lcut:GrupoVasconiaSabMember2022-01-012022-06-300000874396lcut:GrupoVasconiaSabMember2021-01-012021-06-300000874396us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMemberlcut:GrupoVasconiaSabMember2022-04-012022-06-30iso4217:MXN0000874396us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMemberlcut:GrupoVasconiaSabMember2021-04-012021-06-300000874396us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMemberlcut:GrupoVasconiaSabMember2022-01-012022-06-300000874396us-gaap:EquityMethodInvestmentNonconsolidatedInvesteeOrGroupOfInvesteesMemberlcut:GrupoVasconiaSabMember2021-01-012021-06-300000874396lcut:GrupoVasconiaSabMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-06-300000874396lcut:GrupoVasconiaSabMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-12-310000874396us-gaap:AccountsPayableAndAccruedLiabilitiesMemberlcut:GrupoVasconiaSabMember2022-06-300000874396us-gaap:AccountsPayableAndAccruedLiabilitiesMemberlcut:GrupoVasconiaSabMember2021-12-310000874396us-gaap:TradeNamesMember2022-06-300000874396us-gaap:TradeNamesMember2021-12-310000874396us-gaap:LicensingAgreementsMember2022-06-300000874396us-gaap:LicensingAgreementsMember2021-12-310000874396us-gaap:TradeNamesMember2022-06-300000874396us-gaap:TradeNamesMember2021-12-310000874396us-gaap:CustomerRelationshipsMember2022-06-300000874396us-gaap:CustomerRelationshipsMember2021-12-310000874396us-gaap:OtherIntangibleAssetsMember2022-06-300000874396us-gaap:OtherIntangibleAssetsMember2021-12-310000874396lcut:SeniorSecuredAssetBasedRevolvingCreditFacilitiesMemberlcut:ABLCreditAgreementMember2022-06-300000874396lcut:DebtAgreementsMember2022-06-300000874396lcut:TermLoanMember2022-01-012022-06-300000874396lcut:SeniorSecuredAssetBasedRevolvingCreditFacilitiesMemberlcut:IncrementalFacilitiesMember2022-06-300000874396lcut:ABLCreditAgreementMember2022-06-300000874396lcut:ABLCreditAgreementMember2021-12-310000874396lcut:TermLoanMember2022-06-300000874396lcut:TermLoanMember2021-12-310000874396lcut:TermLoanMember2022-03-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:FederalFundsAndOvernightBankFundingBasedRateMemberlcut:ABLCreditAgreementMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMemberlcut:OneMonthLondonInterBankOfferedRateLIBORMembersrt:MinimumMember2022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMembersrt:MinimumMemberlcut:AlternateBaseRateMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMembersrt:MaximumMemberlcut:AlternateBaseRateMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMembersrt:MinimumMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMemberus-gaap:LondonInterbankOfferedRateLIBORMembersrt:MinimumMember2022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-06-300000874396us-gaap:RevolvingCreditFacilityMemberlcut:ABLCreditAgreementMembersrt:MinimumMember2022-01-012022-06-300000874396lcut:TermLoanMemberlcut:FederalFundsAndOvernightBankFundingBasedRateMember2022-01-012022-06-300000874396lcut:TermLoanMemberus-gaap:RevolvingCreditFacilityMemberlcut:OneMonthLondonInterBankOfferedRateLIBORMembersrt:MinimumMember2022-06-300000874396lcut:TermLoanMemberus-gaap:RevolvingCreditFacilityMemberlcut:OneMonthLondonInterBankOfferedRateLIBORMember2022-01-012022-06-300000874396lcut:TermLoanMembersrt:MinimumMemberlcut:AlternateBaseRateMember2022-06-300000874396lcut:TermLoanMemberlcut:AlternateBaseRateMember2022-01-012022-06-300000874396lcut:TermLoanMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMembersrt:MinimumMember2022-06-300000874396lcut:TermLoanMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-06-300000874396lcut:ABLCreditAgreementMember2022-01-012022-06-300000874396lcut:DebtAgreementsMember2022-01-012022-06-300000874396us-gaap:InterestRateSwapMember2022-06-300000874396us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-06-300000874396us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2022-06-300000874396us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-06-300000874396us-gaap:DesignatedAsHedgingInstrumentMemberlcut:PrepaidExpensesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2022-06-300000874396us-gaap:DesignatedAsHedgingInstrumentMemberlcut:PrepaidExpensesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2021-12-310000874396us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberlcut:AccruedExpensesMember2022-06-300000874396us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Memberlcut:AccruedExpensesMember2021-12-310000874396us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2022-06-300000874396us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2021-12-310000874396us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-06-300000874396us-gaap:ForeignExchangeContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-12-310000874396us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2022-06-300000874396us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:OtherNoncurrentAssetsMemberus-gaap:FairValueInputsLevel2Member2021-12-310000874396us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2022-06-300000874396us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:NondesignatedMemberus-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel2Member2021-12-310000874396us-gaap:InterestRateSwapMember2022-04-012022-06-300000874396us-gaap:InterestRateSwapMember2021-04-012021-06-300000874396us-gaap:InterestRateSwapMember2022-01-012022-06-300000874396us-gaap:InterestRateSwapMember2021-01-012021-06-300000874396us-gaap:ForeignExchangeContractMember2022-04-012022-06-300000874396us-gaap:ForeignExchangeContractMember2021-04-012021-06-300000874396us-gaap:ForeignExchangeContractMember2022-01-012022-06-300000874396us-gaap:ForeignExchangeContractMember2021-01-012021-06-300000874396us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-04-012022-06-300000874396us-gaap:ForeignExchangeContractMemberus-gaap:CostOfSalesMember2022-04-012022-06-300000874396us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-01-012022-06-300000874396us-gaap:ForeignExchangeContractMemberus-gaap:CostOfSalesMember2022-01-012022-06-300000874396us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-04-012021-06-300000874396us-gaap:ForeignExchangeContractMemberus-gaap:CostOfSalesMember2021-04-012021-06-300000874396us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-01-012021-06-300000874396us-gaap:ForeignExchangeContractMemberus-gaap:CostOfSalesMember2021-01-012021-06-300000874396lcut:MarkToMarketLossGainOnInterestRateDerivativesMemberus-gaap:InterestRateSwapMember2022-04-012022-06-300000874396lcut:MarkToMarketLossGainOnInterestRateDerivativesMemberus-gaap:InterestRateSwapMember2021-04-012021-06-300000874396lcut:MarkToMarketLossGainOnInterestRateDerivativesMemberus-gaap:InterestRateSwapMember2022-01-012022-06-300000874396lcut:MarkToMarketLossGainOnInterestRateDerivativesMemberus-gaap:InterestRateSwapMember2021-01-012021-06-300000874396lcut:AmendedAndRestatedLongTermIncentivePlanTwoThousandMemberus-gaap:PerformanceSharesMember2022-06-232022-06-230000874396lcut:AmendedAndRestatedLongTermIncentivePlanTwoThousandMemberus-gaap:PerformanceSharesMember2022-06-300000874396us-gaap:RestrictedStockMember2021-12-310000874396us-gaap:RestrictedStockMember2022-01-012022-06-300000874396us-gaap:RestrictedStockMember2022-06-300000874396lcut:CashSettledPerformanceBasedAwardsMember2022-01-012022-06-300000874396us-gaap:PerformanceSharesMember2021-12-310000874396us-gaap:PerformanceSharesMember2022-01-012022-06-300000874396us-gaap:PerformanceSharesMember2022-06-300000874396lcut:CashSettledPerformanceBasedAwardsMember2021-12-310000874396lcut:CashSettledPerformanceBasedAwardsMember2022-06-300000874396us-gaap:EmployeeStockOptionMember2022-04-012022-06-300000874396us-gaap:EmployeeStockOptionMember2021-04-012021-06-300000874396us-gaap:EmployeeStockOptionMember2022-01-012022-06-300000874396us-gaap:EmployeeStockOptionMember2021-01-012021-06-300000874396lcut:RestrictedStockAndPerformanceSharesMember2022-04-012022-06-300000874396lcut:RestrictedStockAndPerformanceSharesMember2021-04-012021-06-300000874396lcut:RestrictedStockAndPerformanceSharesMember2022-01-012022-06-300000874396lcut:RestrictedStockAndPerformanceSharesMember2021-01-012021-06-300000874396lcut:EquityBasedAwardMember2022-04-012022-06-300000874396lcut:EquityBasedAwardMember2021-04-012021-06-300000874396lcut:EquityBasedAwardMember2022-01-012022-06-300000874396lcut:EquityBasedAwardMember2021-01-012021-06-300000874396lcut:LiabilityBasedAwardMember2022-04-012022-06-300000874396lcut:LiabilityBasedAwardMember2021-04-012021-06-300000874396lcut:LiabilityBasedAwardMember2022-01-012022-06-300000874396lcut:LiabilityBasedAwardMember2021-01-012021-06-300000874396lcut:CashSettledPerformanceBasedAwardsMember2022-04-012022-06-300000874396lcut:CashSettledPerformanceBasedAwardsMember2021-04-012021-06-300000874396lcut:CashSettledPerformanceBasedAwardsMember2021-01-012021-06-300000874396lcut:StockOptionsAndRestrictedStockMember2022-04-012022-06-300000874396lcut:StockOptionsAndRestrictedStockMember2021-04-012021-06-300000874396lcut:StockOptionsAndRestrictedStockMember2022-01-012022-06-300000874396lcut:StockOptionsAndRestrictedStockMember2021-01-012021-06-30lcut:segment0000874396lcut:U.S.SegmentMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300000874396lcut:U.S.SegmentMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300000874396lcut:U.S.SegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300000874396lcut:U.S.SegmentMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300000874396lcut:InternationalOperationsMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300000874396lcut:InternationalOperationsMemberus-gaap:OperatingSegmentsMember2021-04-012021-06-300000874396lcut:InternationalOperationsMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300000874396lcut:InternationalOperationsMemberus-gaap:OperatingSegmentsMember2021-01-012021-06-300000874396us-gaap:CorporateNonSegmentMember2022-04-012022-06-300000874396us-gaap:CorporateNonSegmentMember2021-04-012021-06-300000874396us-gaap:CorporateNonSegmentMember2022-01-012022-06-300000874396us-gaap:CorporateNonSegmentMember2021-01-012021-06-300000874396country:USus-gaap:OperatingSegmentsMember2022-06-300000874396country:USus-gaap:OperatingSegmentsMember2021-12-310000874396lcut:InternationalGeographicLocationsMemberus-gaap:OperatingSegmentsMember2022-06-300000874396lcut:InternationalGeographicLocationsMemberus-gaap:OperatingSegmentsMember2021-12-310000874396us-gaap:CorporateNonSegmentMember2022-06-300000874396us-gaap:CorporateNonSegmentMember2021-12-310000874396lcut:CapitalCostMemberlcut:SanGermanGroundWaterContaminationSiteInitialOperableUnitMember2022-01-012022-06-300000874396lcut:SanGermanGroundWaterContaminationSiteSecondOperableUnitMemberlcut:CapitalCostMember2022-01-012022-06-30lcut:tablewareCollection00008743962020-06-08lcut:protest00008743962020-10-150000874396lcut:EstimatedDutiesThatCouldBeOwedMember2022-06-300000874396lcut:NegligenceMember2022-06-300000874396lcut:GrossNegligenceMember2022-06-3000008743962022-03-082022-03-0800008743962022-06-232022-06-230000874396us-gaap:DividendPaidMember2022-01-012022-06-300000874396us-gaap:DividendPaidMember2022-02-142022-02-140000874396us-gaap:DividendPaidMember2022-05-162022-05-1600008743962022-02-142022-02-140000874396us-gaap:SubsequentEventMember2022-08-022022-08-020000874396us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310000874396us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310000874396us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310000874396us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310000874396us-gaap:AccumulatedTranslationAdjustmentMember2022-04-012022-06-300000874396us-gaap:AccumulatedTranslationAdjustmentMember2021-04-012021-06-300000874396us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-06-300000874396us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-06-300000874396us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300000874396us-gaap:AccumulatedTranslationAdjustmentMember2021-06-300000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-310000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-04-012022-06-300000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-04-012021-06-300000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-06-300000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-06-300000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-300000874396us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-06-300000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-04-012022-06-300000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-04-012021-06-300000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-06-300000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-06-300000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-06-300000874396us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-06-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 10-Q
__________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 0-19254
__________________________
LIFETIME BRANDS, INC.
(Exact name of registrant as specified in its charter)
__________________________
Delaware11-2682486
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1000 Stewart Avenue, Garden City, New York, 11530
(Address of principal executive offices) (Zip Code)
(516) 683-6000
(Registrant’s telephone number, including area code)
__________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange
on which registered
Common Stock, $.01 par valueLCUTThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  ☒
The number of shares of the registrant’s common stock outstanding as of July 31, 2022 was 22,057,258.



LIFETIME BRANDS, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2022
INDEX
Page No.
Part I.
Item 1.
Condensed Consolidated Statements of Comprehensive (Loss) Income (unaudited) – Three and Six Months Ended June 30, 2022 and 2021
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) –Three and Six Months Ended June 30, 2022 and 2021
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.
























PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30,
2022
December 31,
2021
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents$7,197 $27,982 
Accounts receivable, less allowances of $13,876 at June 30, 2022 and $16,544 at December 31, 2021
106,164 175,076 
Inventory295,139 270,516 
Prepaid expenses and other current assets14,934 11,499 
Income taxes receivable3,729  
TOTAL CURRENT ASSETS427,163 485,073 
PROPERTY AND EQUIPMENT, net18,740 20,748 
OPERATING LEASE RIGHT-OF-USE ASSETS81,100 86,487 
INVESTMENTS22,098 22,295 
INTANGIBLE ASSETS, net221,306 212,678 
OTHER ASSETS2,281 1,793 
TOTAL ASSETS$772,688 $829,074 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturity of term loan$4,581 $5,771 
Current maturity of revolving credit facility20,347  
Short-term loan30  
Accounts payable61,848 82,573 
Accrued expenses79,514 112,741 
Income taxes payable 604 
Current portion of operating lease liabilities13,874 12,612 
TOTAL CURRENT LIABILITIES180,194 214,301 
OTHER LONG-TERM LIABILITIES11,633 12,116 
INCOME TAXES PAYABLE, LONG-TERM1,472 1,472 
OPERATING LEASE LIABILITIES83,401 90,824 
DEFERRED INCOME TAXES13,056 12,842 
TERM LOAN237,564 241,873 
STOCKHOLDERS’ EQUITY
Preferred stock, $1.00 par value, shares authorized: 100 shares of Series A and 2,000,000 shares of Series B; none issued and outstanding
  
Common stock, $0.01 par value, shares authorized: 50,000,000 at June 30, 2022 and December 31, 2021; shares issued and outstanding: 22,058,883 at June 30, 2022 and 22,018,016 at December 31, 2021
221 220 
Paid-in capital273,279 271,556 
Retained earnings
8,224 17,419 
Accumulated other comprehensive loss
(36,356)(33,549)
TOTAL STOCKHOLDERS’ EQUITY245,368 255,646 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$772,688 $829,074 
See accompanying notes to unaudited condensed consolidated financial statements.
- 2 -

LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net sales$151,314 $186,636 $334,031 $382,289 
Cost of sales96,147 120,475 215,796 250,128 
Gross margin55,167 66,161 118,235 132,161 
Distribution expenses17,373 18,931 36,598 37,577 
Selling, general and administrative expenses38,258 36,229 77,746 74,337 
(Loss) income from operations
(464)11,001 3,891 20,247 
Interest expense(3,732)(3,819)(7,499)(7,833)
Mark to market gain on interest rate derivatives
304 46 1,353 544 
(Loss) income before income taxes and equity in earnings
(3,892)7,228 (2,255)12,958 
Income tax benefit (provision)
98 (1,832)(1,575)(4,248)
Equity in earnings, net of taxes
334 393 750 146 
NET (LOSS) INCOME
$(3,460)$5,789 $(3,080)$8,856 
BASIC (LOSS) INCOME PER COMMON SHARE
$(0.16)$0.27 $(0.14)$0.42 
DILUTED (LOSS) INCOME PER COMMON SHARE
$(0.16)$0.26 $(0.14)$0.40 
See accompanying notes to unaudited condensed consolidated financial statements.
- 3 -

LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
 2022202120222021
Net (loss) income
$(3,460)$5,789 $(3,080)$8,856 
Other comprehensive (loss) income, net of taxes:
Translation adjustment(4,307)2,394 (4,423)4,223 
Net change in cash flow hedges950 236 1,558 63 
Effect of retirement benefit obligations29 41 58 68 
Other comprehensive (loss) income, net of taxes
(3,328)2,671 (2,807)4,354 
Comprehensive (loss) income
$(6,788)$8,460 $(5,887)$13,210 
See accompanying notes to unaudited condensed consolidated financial statements.
- 4 -


LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
 Common stockPaid-in
capital
Retained earnings
Accumulated other
comprehensive
 loss
Total
SharesAmount
BALANCE AT DECEMBER 31, 2021
22,018 $220 $271,556 $17,419 $(33,549)$255,646 
Net income
— — — 380 — 380 
Other comprehensive income, net of taxes
— — — — 521 521 
Performance shares issued to employees167 2 (2)— — — 
Net issuance of restricted shares granted to employees207 2 (2)— — — 
Stock compensation expense— — 1,151 — — 1,151 
Net exercise of stock options22 — 233 — — 233 
Shares effectively repurchased for required employee withholding taxes(45) (568)— — (568)
Stock repurchase(51)(1)(670)— — (671)
Dividends (1)
— — — (960)— (960)
BALANCE AT MARCH 31, 2022
22,318 $223 $271,698 $16,839 $(33,028)$255,732 
Net loss
— — — (3,460)— (3,460)
Other comprehensive loss, net of taxes
— — — — (3,328)(3,328)
Net issuance of restricted shares granted to employees and directors54 1 (1)— — — 
Stock compensation expense— — 1,280 — — 1,280 
Net exercise of stock options3   — —  
Shares effectively repurchased for required employee withholding taxes(30)(1)(369)— — (370)
Stock repurchase(286)(2)671 (4,197)— (3,528)
Dividends (1)
— — — (958)— (958)
BALANCE AT JUNE 30, 2022
22,059 $221 $273,279 $8,224 $(36,356)$245,368 

Common stockPaid-in
capital
Retained earnings
Accumulated other
comprehensive
 loss
 Total
SharesAmount
BALANCE AT DECEMBER 31, 2020
21,755 $218 $268,666 $424 $(39,172)$230,136 
Net income
— — — 3,067 — 3,067 
Other comprehensive income, net of taxes
— — — — 1,6831,683 
Performance shares issued to employees150 1 (1)— — — 
Net issuance of restricted shares granted to employees177 2 (2)— — — 
Stock compensation expense— — 1,439 — — 1,439 
Net exercise of stock options44 — 184 — — 184 
Shares effectively repurchased for required employee withholding taxes(146)(1)(2,159)— — (2,160)
Dividends (1)
— — — (943)— (943)
BALANCE AT MARCH 31, 2021
21,980 $220 $268,127 $2,548 $(37,489)$233,406 
Net income
— — — 5,789 — 5,789 
Total comprehensive income
2,6712,671 
Net issuance of restricted shares granted to employees and directors44 0 0 — — — 
Stock compensation expense— — 1,323 — — 1,323 
Net exercise of stock options50 1 550 — — 551 
Shares effectively repurchased for required employee withholding taxes(67)(1)(1,024)— — (1,025)
Dividends (1)
— — — (914)— (914)
BALANCE AT JUNE 30, 2021
22,007 $220 $268,976 $7,423 $(34,818)$241,801 
(1) Cash dividends declared per share of common stock were $0.085 and $0.085 in the six months ended June 30, 2022 and 2021, respectively.
See accompanying notes to unaudited condensed consolidated financial statements.
- 5 -

LIFETIME BRANDS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
June 30,
 20222021
OPERATING ACTIVITIES
Net (loss) income
$(3,080)$8,856 
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization9,937 11,723 
Amortization of financing costs843 876 
Mark to market (gain) on interest rate derivatives
(1,353)(544)
Non-cash lease expense(690)(768)
Recovery for doubtful accounts
(258)(146)
Stock compensation expense2,539 2,772 
Undistributed (earnings) from equity investment, net of taxes
(750)(146)
Changes in operating assets and liabilities (excluding the effects of business acquisitions)
Accounts receivable69,500 49,943 
Inventory(25,325)(14,305)
Prepaid expenses, other current assets and other assets(816)2,931 
Accounts payable, accrued expenses and other liabilities(55,117)(12,516)
Income taxes receivable(3,729)(1,750)
Income taxes payable(558)(4,795)
 NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
(8,857)42,131 
INVESTING ACTIVITIES
Purchases of property and equipment(1,479)(2,497)
Acquisitions(17,956)(178)
NET CASH USED IN INVESTING ACTIVITIES
(19,435)(2,675)
FINANCING ACTIVITIES
Proceeds from revolving credit facility157,751 10,845 
Repayments of revolving credit facility(136,970)(38,131)
Repayments of term loan(6,216)(10,478)
Proceeds from short-term loan30 31 
Repayments of short-term loan (31)
Payments for finance lease obligations(17)(43)
Payments of tax withholding for stock based compensation(938)(3,185)
Proceeds from the exercise of stock options233 735 
Payments for stock repurchase(4,199) 
Cash dividends paid(1,929)(1,957)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
7,745 (42,214)
Effect of foreign exchange on cash(238)140 
DECREASE IN CASH AND CASH EQUIVALENTS
(20,785)(2,618)
Cash and cash equivalents at beginning of period27,982 35,963 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$7,197 $33,345 
See accompanying notes to unaudited condensed consolidated financial statements.
- 6 -


LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)

NOTE 1 — BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES
Organization and business
Lifetime Brands, Inc. (“the Company”) designs, sources and sells branded kitchenware, tableware and other products used in the home and markets its products under a number of widely-recognized brand names and trademarks, which are either owned or licensed by the Company or through retailers’ private labels and their licensed brands. The Company’s products, which are targeted primarily towards consumers purchasing moderately priced kitchenware, tableware and housewares, are sold through virtually every major level of trade. The Company generally markets several lines within each of its product categories under more than one brand. The Company sells its products directly to retailers (who may resell the Company’s products through their websites) and, to a lesser extent, to distributors. The Company also sells a limited selection of its products directly to consumers through its own websites.
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which consist of normal recurring accruals and non-recurring adjustments, considered necessary for a fair presentation have been included.
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
The Company’s business and working capital needs are highly seasonal, with a majority of sales occurring in the third and fourth quarters. In 2021 and 2020, net sales for the third and fourth quarters accounted for 56% and 62% of total annual net sales, respectively. The increase in the Company's net sales in the first half of the year in 2021 compared to historical trend was a result of increased demand for the Company's products due to shifts in consumer purchasing patterns. In anticipation of the pre-holiday shipping season, inventory levels increase primarily in the June through October time period.
The Company’s current estimates contemplate current and expected future conditions, as applicable, however it is reasonably possible that actual conditions could differ from expectations, which could materially affect the Company’s results of operations and financial position.
Revenue recognition
The Company sells products wholesale, to retailers and distributors, and retail, directly to the consumer. Wholesale sales and retail sales are primarily recognized at the point in time the customer obtains control of the products, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products.
The Company offers various sales incentives and promotional programs to its customers in the normal course of business. These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts. These arrangements and an estimate for products expected to be returned are reflected as reductions of revenue at the time of sale. See NOTE 2 —REVENUE to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Cost of sales
Cost of sales consist primarily of costs associated with the production and procurement of product, inbound freight costs, purchasing costs, royalties, and other product procurement related charges.

- 7 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
Distribution expenses
Distribution expenses consist primarily of warehousing expenses and freight-out expenses. Handling costs of products sold are included in cost of sales.
Accounts receivable
The Company periodically reviews the collectability of its accounts receivable and establishes allowances for estimated losses that could result from the inability of its customers to make required payments, taking into consideration customer credit history and financial condition, industry and market segment information, credit reports, and economic trends and conditions such as the impacts of the COVID-19 pandemic. A considerable amount of judgment is required to assess the ultimate realization of these receivables, including assessing the initial and on-going creditworthiness of the Company’s customers.
The Company also maintains an allowance for anticipated customer deductions. The allowances for deductions are primarily based on contracts with customers. However, in certain cases, the Company does not have a formal contract and, therefore, customer deductions are non-contractual. To evaluate the reasonableness of non-contractual customer deductions, the Company analyzes currently available information and historical trends of deductions.
Receivable purchase agreement
The Company has an uncommitted Receivables Purchase Agreement with HSBC Bank USA, National Association (“HSBC”) as Purchaser (the “Receivables Purchase Agreement”). The sale of accounts receivable, under the Receivables Purchase Agreement with HSBC, is excluded from the Company’s unaudited condensed consolidated balance sheets at the time of sale and the related sale expense is included in selling, general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations. Pursuant to the Receivable Purchase Agreement, the Company sold to HSBC $33.5 million and $79.8 million of receivables during the three and six months ended June 30, 2022, respectively and $38.9 million and $79.5 million of receivables during three and six months ended June 30, 2021, respectively. Charges of $0.2 million and $0.1 million related to the sale of the receivables are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the three months ended June 30, 2022 and 2021, respectively. Charges of $0.3 million and $0.2 million related to the sale of the receivables are included in selling, general and administrative expenses in the unaudited condensed consolidated statements of operations for the six months ended June 30, 2022 and 2021, respectively. At June 30, 2022 and 2021, $25.6 million and $14.6 million, respectively, of receivables sold were outstanding and due to HSBC from customers.
Inventory
Inventory consists principally of finished goods sourced from third-party suppliers. Inventory also includes finished goods, work in process and raw materials related to the Company’s manufacture of sterling silver products. Inventory is priced using the lower of cost (first-in, first-out basis) or net realizable value. The Company estimates the selling price of its inventory on a product by product basis based on the current selling environment. If the estimated selling price is lower than the inventory’s cost, the Company reduces the value of the inventory to its net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation.
The components of inventory were as follows (in thousands):
June 30,
2022
December 31, 2021
Finished goods$283,764 $259,916 
Work in process90 159 
Raw materials11,285 10,441 
Total$295,139 $270,516 
- 8 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
Fair value of financial instruments
The Company determined that the carrying amounts of cash and cash equivalents, accounts receivable and accounts payable are reasonable estimates of their fair values because of their short-term nature. The Company determined that the carrying amounts of borrowings outstanding under its ABL Agreement and Term Loan (each as defined in NOTE 7 — DEBT to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q) approximate fair value since such borrowings bear interest at variable market rates.
Derivatives
The Company accounts for derivative instruments in accordance with Accounting Standard Codification (“ASC”) Topic 815, Derivatives and Hedging (“ASC 815”). ASC 815 requires that all derivative instruments be recognized on the balance sheet at fair value as either an asset or liability. Changes in the fair value of derivatives that qualify as hedges and have been designated as part of a hedging relationship for accounting purposes have no net impact on earnings until the hedged item is recognized in earnings. The changes in the fair value of hedges are included in accumulated other comprehensive loss and are subsequently recognized in the Company’s unaudited condensed consolidated statements of operations to mirror the location of the hedged items impacting earnings. Changes in fair value of derivatives that do not qualify as hedging instruments for accounting purposes are recorded in the Company’s unaudited condensed consolidated statements of operations.
Goodwill, intangible assets and long-lived assets
Goodwill and intangible assets deemed to have indefinite lives are not amortized but, instead, are subject to an annual impairment assessment. Additionally, if events or conditions were to indicate the carrying value of a reporting unit may not be recoverable, the Company would evaluate goodwill and other intangible assets for impairment at that time.
As it relates to the goodwill assessment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment testing described in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Update No. (“ASU”) Topic 350, Intangibles – Goodwill and Other. If, after assessing qualitative factors, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative test is unnecessary and the Company’s goodwill is considered to be unimpaired. However, if based on the Company’s qualitative assessment it concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company elects to bypass the qualitative assessment, the Company will proceed with performing the quantitative impairment test.
The Company reviews goodwill and other intangibles that have indefinite lives for impairment annually as of October 1 or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. Impairment testing is based upon the best information available, including estimates of fair value which incorporate assumptions marketplace participants would use in making their estimates of fair value.
The significant assumptions used under the income approach, or discounted cash flow method, are projected net sales, projected earnings before interest, tax, depreciation and amortization (“EBITDA”), terminal growth rates, and the cost of capital. Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are three primary drivers of the projected cash flows in the discounted cash flow fair value model. Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows. For the guideline public company method, significant assumptions relate to the selection of appropriate guideline companies and related valuation multiples used in the market analysis.
Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results. In addition, sustained declines in the Company’s stock price and related market capitalization could impact key assumptions in the overall estimated fair values of its reporting units and could result in non-cash impairment charges that could be material to the Company’s consolidated balance sheet or results of operations. Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, an impairment charge will be recorded to reduce the reporting unit to fair value.
- 9 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
The Company also evaluates qualitative factors to determine whether impairment indicators exist for its indefinite lived intangibles and performs quantitative tests if required. These tests can include the relief from royalty model or other valuation models.
Long-lived assets, including intangible assets deemed to have finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit or material adverse changes in the business climate that indicate that the carrying amount of an asset may be impaired. When impairment indicators are present, the recoverability of the asset is measured by comparing the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset is not recoverable, the impairment to be recognized is measured by the amount by which the carrying amount of each long-lived asset exceeds the fair value of the asset. See NOTE 6 — INTANGIBLE ASSETS to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
Leases
The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use (“ROU”) assets are included in operating lease right-of-use assets on the condensed consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liability and operating lease liabilities, respectively, on the condensed consolidated balance sheets. Finance leases are included in property and equipment, net, accrued expenses and other long-term liabilities. The Company’s finance leases are not material to the Company’s condensed consolidated balance sheets.
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset may also include any lease payments made, adjusted for any prepaid or accrued rent payments, lease incentives, and initial direct costs incurred. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
For certain equipment leases, the Company applies a portfolio approach to effectively account for any ROU assets and lease liabilities. Leases with an initial term of twelve months or less are not recorded on the balance sheet.
The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized.
Employee healthcare
The Company self-insures certain portions of its health insurance plan. The Company maintains an accrual for estimated unpaid claims and claims incurred but not yet reported (“IBNR”). Although management believes that it uses the best information available to estimate IBNR claims, actual claims may vary significantly from estimated claims.
Restructuring expenses
Costs associated with restructuring activities are recorded at fair value when a liability has been incurred. Generally, a liability has been incurred at the communication date for severance. Charges associated with lease terminations, related to restructuring activities, are recognized at the effective date of the lease modification.
Adoption of new accounting pronouncements
Effective January 1, 2022, the Company adopted ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

- 10 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
New accounting pronouncements
Updates not listed below were assessed and either determined to not be applicable or are expected to have a minimal effect on the Company’s financial position, results of operations, and disclosures.
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This guidance introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. ASU 2016-13 also provides updated guidance regarding the impairment of available-for-sale debt securities and includes additional disclosure requirements. The new guidance is effective for public business entities that meet the definition of a Smaller Reporting Company, as defined by the Securities and Exchange Commission for interim and annual periods beginning after December 15, 2022. The Company met the definition of a Smaller Reporting Company as of the one-time determination date of November 15, 2019. Early adoption is permitted. Management is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to account for contract modifications, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”) or another reference rate that is expected to be discontinued as a result of reference rate reform. The guidance in ASU 2020-04 may be applied to contract modifications and hedging relationships as of any date from March 12, 2020, but no later than December 31, 2022, and should be applied on a prospective basis. The Company has not yet applied the guidance in ASU 2020-04 and is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
NOTE 2 —REVENUE
The Company sells products wholesale, to retailers and distributors, and sells products retail, directly to consumers. Wholesale sales and retail sales are recognized at the point in time the customer obtains control of the products in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership, and where acceptance is not a formality, the customer must have accepted the product or service. The Company’s principal terms of sale are Free On Board (“FOB”) Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations. Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $1.0 million and $2.0 million for the three and six months ended June 30, 2022, respectively, and $0.7 million and $1.4 million for the three and six months ended June 30, 2021, respectively. Net sales exclude taxes that are collected from customers and remitted to the taxing authorities.
The Company offers various sales incentives and promotional programs to its wholesale customers from time to time in the normal course of business. These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts. These arrangements, which represent forms of variable consideration and an estimate of sales returns, are reflected as reductions in net sales in the Company’s unaudited condensed consolidated statements of operations. These estimates are based on historical experience and other known factors or as the most likely amount in a range of possible outcomes. On a quarterly basis, variable consideration is assessed on a portfolio approach in estimating the extent to which the components of variable consideration are constrained. Payment terms vary by customer, but generally range from 30 to 90 days or at the point of sale for the Company’s retail direct sales.
The Company incurs certain direct incremental costs to obtain contracts with customers, such as sales-related commissions, where the recognition period for the related revenue is less than one year. These costs are expensed as incurred and recorded within selling, general and administrative expenses in the unaudited condensed consolidated statements of operations. Incidental items that are immaterial in the context of the contract are expensed as incurred.
- 11 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
The following tables present the Company’s net sales disaggregated by segment, product category and geographic region for the three and six months ended June 30, 2022 and 2021 (in thousands):
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
U.S. segment
Kitchenware$84,345 $103,627 $198,475 $223,622 
Tableware29,943 37,289 56,520 67,521 
Home Solutions22,903 25,667 48,414 51,621 
Total U.S. segment137,191 166,583 303,409 342,764 
International segment14,123 20,053 30,622 39,525 
Total net sales$151,314 $186,636 $334,031 $382,289 
United States$131,650 $161,946 $291,052 $332,714 
United Kingdom8,053 9,855 18,839 22,635 
Rest of World11,611 14,835 24,140 26,940 
Total net sales$151,314 $186,636 $334,031 $382,289 
NOTE 3 —ACQUISITION
S'well
On March 2, 2022, the Company acquired certain assets of Can't Live Without It, LLC. (dba S'well Bottle and which the Company refers to as “S'well”). The Company paid cash consideration of $18.0 million. The transaction also includes up to $5.0 million in contingent consideration, subject to the acquired brand reaching certain milestones.
The purchase price was comprised of the following (in thousands):
Cash paid$17,956 
Value of contingent consideration650 
Total purchase price$18,606 
The value of contingent consideration represents the present value of estimated contingent payments of $0.7 million, related to the attainment of certain gross contribution targets for the year 2024. The maximum undiscounted contingent consideration to be paid under the agreement is $5.0 million. Acquisition related costs of $0.9 million were recorded within selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.








- 12 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
The purchase price was allocated based on the Company’s preliminary estimate of the fair values of the assets acquired and liabilities assumed, as follows (in thousands):
Purchase Price Allocation
Accounts receivable$2,280 
Inventory4,005 
Fixed assets40 
Intangible assets13,000 
Goodwill2,966 
Accounts payable and accrued expenses(3,685)
Total allocated value$18,606 
The acquisition is being accounted for as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805, Business Combinations (“ASC Topic 805”), which established a new basis of accounting for all identifiable assets acquired and liabilities assumed at fair value. ASC Topic 805 allows the acquiring company to adjust preliminary amounts recognized at the acquisition date to their subsequently determined final fair values during a measurement period, generally up to one year from the date of the acquisition. The fair values of net assets acquired are based on the Company’s preliminary estimate of the respective fair values. The preliminary estimated fair values that are not yet finalized relate to the valuation of accounts receivable, inventory, accounts payable, accrued expenses, intangibles, deferred taxes and valuation of the contingent consideration.
The goodwill recognized results from such factors as assembled workforce and the value of other synergies expected from combining operations with the Company. The associated goodwill is deductible for tax purposes. Goodwill and the trade name intangible asset are included in the U.S. segment. The trade name intangible asset is amortized on a straight-line basis over its estimated useful life of 12 years (see Note 6).
The condensed consolidated statement of operations includes $3.5 million and $4.4 million of net sales attributable to the S'well brand for the three and six months ended June 30, 2022, respectively.
Year & Day
On February 26, 2021, the Company acquired the business and certain assets of Year & Day, a designer and distributor of ceramic dinnerware, stainless steel flatware and Italian glassware for cash in the amount of $0.2 million. The assets and operating results of the Year & Day brand are reflected in the Company’s condensed consolidated financial statements in accordance with ASC Topic No. 805, Business Combinations, commencing from the acquisition date. The purchase price was allocated based on the fair values of the assets acquired which consisted of inventory of $0.3 million and liabilities assumed of $(0.1) million.
NOTE 4 — LEASES
The Company has operating leases for corporate offices, distribution facilities, a manufacturing plant, and certain vehicles.
The components of lease expense for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Operating lease expenses(1):
Fixed lease expense$4,521 $4,501 $8,929 $8,996 
Variable lease expense1,174 949 2,345 1,927 
Total$5,695 $5,450 $11,274 $10,923 
(1) Expenses are recorded within distribution expenses and selling, general and administrative expenses on the unaudited condensed consolidated statement of operations.
- 13 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
Supplemental cash flow information for lease related liabilities and assets for the six months ended June 30, 2022 and 2021 were as follows (in thousands):
Six Months Ended
June 30,
2022
2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases$9,618 $9,764 
Six Months Ended
June 30,
2022
2021
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$2,452 $1,248 
The aggregate future lease payments for operating leases as of June 30, 2022 were as follows (in thousands):
 Operating
2022 (excluding the six months ended June 30, 2022)
$9,753 
202319,067 
202418,541 
202517,935 
202617,233 
202713,154 
Thereafter23,703 
Total lease payments119,386 
Less: Interest(22,111)
Present value of lease payments$97,275 
Average lease terms and discount rates were as follows:
 June 30, 2022
Operating leases:
Weighted-average remaining lease term (years)6.7
Weighted-average discount rate6.1 %
NOTE 5 —INVESTMENTS
As of June 30, 2022, the Company owned 24.7% of the outstanding capital stock of Grupo Vasconia S.A.B. (“Vasconia”), an integrated manufacturer of aluminum products and one of Mexico’s largest housewares companies. Shares of Vasconia’s capital stock are traded on the Bolsa Mexicana de Valores, the Mexican Stock Exchange. The Quotation Key is VASCONI. For the period ended June 30, 2021, the Company's investment ownership was 30.0%. The Company's investment ownership decreased to approximately 27.0% on June 30, 2021 and was further reduced to 24.7% on July 29, 2021 as a result of transactions that occurred in those periods. The Company accounts for its investment in Vasconia using the equity method of accounting and records its proportionate share of Vasconia’s net income in the Company’s condensed consolidated statements of operations. Accordingly, the Company has recorded its proportionate share of Vasconia’s net income (reduced for amortization expense related to the customer relationships acquired) for the three and six months ended June 30, 2022 and 2021 in the accompanying unaudited condensed consolidated statements of operations.
On June 30, 2021, Vasconia issued additional shares of its stock, which diluted the Company’s investment ownership from approximately 30% to approximately 27%. The Company recorded a non-cash gain of $1.7 million, increasing the Company’s
- 14 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
investment balance. Additionally, a loss of $2.0 million was recognized for the proportionate share of the diluted ownership for amounts previously recognized in accumulated other comprehensive loss. The net loss of $0.3 million was included in equity in earnings, net of taxes, in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021.
The value of the Company’s investment balance has been translated from Mexican Pesos (“MXN”) to U.S. Dollars (“USD”) using the spot rates of MXN 20.15 and MXN 20.46 at June 30, 2022 and December 31, 2021, respectively.
The Company’s proportionate share of Vasconia’s net income has been translated from MXN to USD using the following exchange rates:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Average exchange rate (USD to MXN)
20.02
20.02
20.02 - 20.50
20.02 - 20.33
The effect of the translation of the Company’s investment, as well as the translation of Vasconia’s balance sheet, resulted in a decrease to the investment of $0.9 million and an increase of $1.6 million during the six months ended June 30, 2022 and 2021, respectively. These translation effects are recorded in accumulated other comprehensive loss.
Summarized income statement information for the three and six months ended June 30, 2022 and 2021 for Vasconia in USD and MXN is as follows (in thousands):
Three Months Ended
June 30,
20222021
USDMXNUSDMXN
Net sales$66,195 $1,325,237 $59,079 $1,182,752 
Gross profit
10,804 216,297 15,921 318,737 
Income from operations
518 10,366 6,499 130,110 
Net income
1,403 28,091 2,380 47,661 
Six Months Ended
June 30,
20222021
USDMXNUSDMXN
Net Sales$130,513 $2,643,750 $112,685 $2,272,569 
Gross profit
25,224 511,915 27,879 561,840 
Income from operations
5,203 106,406 10,283 207,043 
Net income
3,134 63,570 1,610 32,000 
The Company recorded equity in earnings of Vasconia, net of taxes, of $0.3 million and $0.8 million for the three and six months ended June 30, 2022, respectively. The Company recorded equity in earnings of Vasconia, net of taxes, of $0.7 million and $0.5 million for the three and six months ended June 30, 2021, respectively.
Included within the Company's unaudited condensed consolidated balance sheets were the following amounts due to and due from Vasconia (in thousands):
Vasconia due to and due from balancesBalance Sheet LocationJune 30, 2022December 31, 2021
Amounts due from VasconiaPrepaid expenses and other current assets$168 $80 
Amounts due to VasconiaAccrued expenses and Accounts payable(13)(146)
- 15 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
As of June 30, 2022 and December 31, 2021, the fair value (based on Level 1 inputs using the quoted stock price) of the Company’s investment in Vasconia was $21.3 million and $31.5 million, respectively. The carrying value of the Company’s investment in Vasconia was $22.1 million and $22.3 million as of June 30, 2022 and December 31, 2021, respectively The Company evaluated the decline in fair value of the investment and concluded that the decline is temporary.
- 16 -

LIFETIME BRANDS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2022
(unaudited)
NOTE 6 — INTANGIBLE ASSETS
Intangible assets consisted of the following as of June 30, 2022 and December 31, 2021 (in thousands):
 June 30, 2022December 31, 2021
GrossAccumulated
Amortization
NetGrossImpairmentAccumulated
Amortization
Net
Goodwill$33,237 $— $33,237 $30,271 $ $— $30,271 
Indefinite-lived intangible assets:
Trade names49,600 — 49,600 49,600  —