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What changed in LIFETIME BRANDS, INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of LIFETIME BRANDS, INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+246 added−276 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-12)

Top changes in LIFETIME BRANDS, INC's 2024 10-K

246 paragraphs added · 276 removed · 194 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

23 edited+3 added−3 removed17 unchanged
Biggest changeThe U.S. segment includes the domestic operations of the Company’s business that design, market and distribute its products to retailers, distributors and directly to consumers through retail websites. The International segment consists of certain business operations conducted outside the U.S.
Biggest changeThe Company has manufacturing operations in Mexico to manufacture certain of the Company’s products. 5 Table of Contents BUSINESS SEGMENTS The Company has two reportable operating segments, U.S. and International. The U.S. segment includes the domestic operations of the Company’s business that design, market and distribute its products to retailers, distributors and directly to consumers through retail websites.
The Company’s product categories include two categories of products used to prepare, serve and consume foods, Kitchenware (kitchen tools and gadgets, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks and bakeware) and Tableware (dinnerware, stemware, flatware and giftware); and one category, Home Solutions, which comprises other products used in the home (thermal beverageware, bath scales, weather and outdoor household products, food storage, neoprene travel products and home décor).
The Company’s product categories include two categories of products used to prepare, serve and consume foods, Kitchenware (kitchen tools, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks and bakeware) and Tableware (dinnerware, stemware, flatware and giftware); and one category, Home Solutions, which comprises other products used in the home (thermal beverageware, bath scales, weather and outdoor household products, food storage, neoprene travel products and home décor).
The Company operates distribution facilities at the following locations: Location Size (square feet) Rialto, California 703,000 Robbinsville, New Jersey 700,000 Aston, England 228,000 Winchendon, Massachusetts 175,000 Las Cruces, New Mexico 47,000 Medford, Massachusetts 5,600 Additionally, the Company uses third-party operated distribution facilities to supplement its distribution capacity, including a major distribution facility located in Rotterdam, Netherlands.
The Company operates distribution facilities at the following locations: Location Size (square feet) Rialto, California 703,000 Robbinsville, New Jersey 700,000 Aston, England 228,000 Winchendon, Massachusetts 175,000 Las Cruces, New Mexico 47,000 Medford, Massachusetts 5,600 Additionally, the Company uses third-party operated distribution facilities to supplement its distribution capacity, including a distribution facility located in Rotterdam, Netherlands.
The Company holds certain rights to use the Farberware brand for kitchen tools and gadgets, cutlery, cutting boards, shears and certain other products which together represent a material portion of its sales, through a fully-paid, royalty-free license for a term that expires in 2195, subject to earlier termination under certain circumstances.
The Company holds certain rights to use the Farberware brand for kitchen tools, cutlery, cutting boards, shears and certain other products which together represent a material portion of its sales, through a fully-paid, royalty-free license for a term that expires in 2195, subject to earlier termination under certain circumstances.
The Company’s products are sold globally to a diverse customer base including mass market merchants (such as Walmart and Target), specialty stores (such as Williams Sonoma and Dunelm), department stores (such as Macy’s, Kohl’s and Belk), warehouse clubs (such as Costco, and BJs), grocery stores (such as Publix, Kroger, Meijer, and Winn-Dixie), off-price retailers (such as TJX Companies, Ross Stores and Big Lots), food service distributors (such as US Foods, Clark Food Service and Jetro), food and beverage outlets (such as Starbucks) and e-commerce (such as Amazon).
The Company’s products are sold globally to a diverse customer base including mass market merchants (such as Walmart and Target), specialty stores (such as Williams Sonoma and Dunelm), department stores (such as Macy’s, Kohl’s and Belk), warehouse clubs (such as Costco, and BJs), grocery stores (such as Publix, Kroger, Meijer, and Winn-Dixie), off-price retailers (such as TJX Companies and Ross Stores), food service distributors (such as US Foods, Clark Food Service and Jetro), food and beverage outlets (such as Starbucks) and e-commerce (such as Amazon).
The Company also holds a license to use the KitchenAid brand for certain products, including products for kitchen tools and gadgets, cutlery and bakeware, subject to a license agreement that will expire in December 2026.
The Company also holds a license to use the KitchenAid brand for certain products, including products for kitchen tools, cutlery and bakeware, subject to a license agreement that will expire in December 2026.
DESIGN AND INNOVATION At the heart of the Company is a culture of innovation and new product development. The Company’s global in-house design and development teams currently consist of approximately 90 professional designers, artists and engineers. Utilizing the latest available design tools, technology and materials, these teams create new products, redesign existing products and create packaging and merchandising concepts.
DESIGN AND INNOVATION At the heart of the Company is a culture of innovation and new product development. The Company’s global in-house design and development teams currently consist of approximately 70 professional designers, artists and engineers. Utilizing the latest available design tools, technology and materials, these teams create new products, redesign existing products and create packaging and merchandising concepts.
The Company’s top brands and their respective product categories as of December 31, 2023 are: Brand Licensed/Owned Product Category Farberware® Licensed (1) Kitchenware KitchenAid® Licensed Kitchenware Mikasa® Owned Tableware and Home Solutions Taylor® Owned Kitchenware and Home Solutions Pfaltzgraff® Owned Kitchenware, Tableware and Home Solutions BUILT NY® Owned Home Solutions S'well® Owned Home Solutions Fred® & Friends Owned Kitchenware KitchenCraft® Owned Kitchenware Rabbit® Owned Kitchenware Kamenstein® Owned Kitchenware (1) The Company has a royalty free license to utilize the Farberware® brand, primarily for its kitchenware products, for a term that expires in 2195, subject to earlier termination under certain circumstances.
The Company’s top brands and their respective product categories as of December 31, 2024 are: Brand Licensed/Owned Product Category Farberware® Licensed (1) 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 (1) The Company has a royalty free license to utilize the Farberware® brand, primarily for its kitchenware products, for a term that expires in 2195, subject to earlier termination under certain circumstances.
As of December 31, 2023, the Company occupied 27,000 square feet of this facility. SALES AND MARKETING The Company’s sales and marketing staff coordinates directly with its wholesale customers to devise marketing strategies and merchandising concepts and to furnish advice on advertising and product promotion.
As of December 31, 2024, the Company occupied 27,000 square feet of this facility. SALES AND MARKETING The Company’s sales and marketing staff coordinates directly with its wholesale customers to devise marketing strategies and merchandising concepts and to furnish advice on advertising and product promotion.
Further, the Company offers professional development opportunities to cultivate talent throughout the Company. The Company also values diversity and inclusion and aims to foster an inclusive community. 7 Table of Contents REGULATORY MATTERS The Company and its affiliates are subject to significant regulation by various governmental, regulatory and other administrative authorities.
Further, the Company offers professional development opportunities to cultivate talent throughout the Company. The Company also aims to foster an inclusive community. 7 Table of Contents REGULATORY MATTERS The Company and its affiliates are subject to significant regulation by various governmental, regulatory and other administrative authorities.
During the year ended December 31, 2023, 2022 and 2021, Amazon.com Inc., (“Amazon”), accounted for 11%, 11% and 12% of consolidated net sales. Sales to Costco and Amazon are included in the Company’s U.S. and International segments. No other customers accounted for 10% or more of the Company’s sales during these periods.
During the year ended December 31, 2024, 2023 and 2022, Amazon.com Inc., (“Amazon”), accounted for 13%, 11% and 11% of consolidated net sales. Sales to Costco and Amazon are included in the Company’s U.S. and International segments. No other customers accounted for 10% or more of the Company’s sales during these periods.
SEASONALITY The Company’s business and working capital needs are seasonal with a majority of sales occurring in the third and fourth quarters. In 2023, net sales for the third and fourth quarters accounted for 57% of total annual net sales, respectively.
SEASONALITY The Company’s business and working capital needs are seasonal with a majority of sales occurring in the third and fourth quarters. In 2024, net sales for the third and fourth quarters accounted for 58% of total annual net sales, respectively.
SOURCES OF SUPPLY The Company sources its products from hundreds of suppliers, almost all of which are located outside the United States (other than the suppliers for the Company’s sterling silver products). Most of the Company’s suppliers are located in China.
SOURCES OF SUPPLY The Company sources its products from hundreds of suppliers, almost all of which are located outside the United States. Most of the Company’s suppliers are located in China.
At December 31, 2023, the Company had approximately 1,230 full-time employees, of whom approximately 140 were located in Asia, 200 were located in Europe and 890 were located in the United States and Puerto Rico. The Company also hires seasonal workers at its distribution centers through temporary staffing agencies.
At December 31, 2024, the Company had approximately 1,180 full-time employees, of whom approximately 130 were located in Asia, 190 were located in Europe and 860 were located in the United States and Puerto Rico. The Company also hires seasonal workers at its distribution centers through temporary staffing agencies.
The Company also has a subsidiary in the People’s Republic of China (“China”) to supply kitchenware and tableware products to the Chinese market and a subsidiary based in Hong Kong to facilitate the sale of its products to Australia, other parts of Asia and smaller markets elsewhere in the world.
The Company also has a subsidiary in the People’s Republic of China (“China”) to supply the Company’s products to the Chinese market and subsidiaries based in Hong Kong, Australia and New Zealand to facilitate the sale of its products to Asia Pacific region and smaller markets elsewhere in the world.
The Company also does business with independent retailers, including through business-to-business websites aimed at independent retailers. The Company also operates its own consumer websites that provide information about the Company’s products and offer consumers the opportunity to purchase a limited selection of the Company’s products directly.
The Company also does business with independent retailers, including through business-to-business websites aimed at independent retailers. The Company also operates its own consumer websites that provide information about the Company’s products and offer consumers the opportunity to purchase a limited selection of the Company’s products directly. During the years ended December 31, 2024, 2023 and 2022, Wal-Mart Stores, Inc.
The Company also sources products from suppliers across various countries including, Hong Kong, Taiwan, Japan, South Korea, Vietnam, Myanmar, Singapore, Malaysia, Philippines, Thailand, India, Bangladesh, the United States, Mexico, the U.K., Italy, Portugal, Poland, Sweden, Turkey, Belgium, Germany, Czech Republic, Slovakia, Cambodia, Indonesia, and New Zealand.
The Company also sources products from suppliers across various countries including, Hong Kong, Taiwan, Japan, South Korea, Vietnam, Cambodia, Malaysia, Philippines, Thailand, India, the United States, Canada, Mexico, Argentina, Chile, Paraguay, Uruguay, the U.K., Italy, Portugal, Netherlands, Poland, Turkey, Czech Republic, Indonesia, Australia and New Zealand.
PATENTS AND LICENSES The Company owns approximately 1,090 design and utility patents. The Company does not believe that the expiration of any of its patents would have a material adverse effect on either of the Company’s segments.
The Company does not believe that the expiration of any of its patents would have a material adverse effect on either of the Company’s segments.
During the years ended December 31, 2023, 2022 and 2021, Wal-Mart Stores, Inc., including Sam’s Club, (“Walmart”), accounted for 21%, 19% and 18% of consolidated net sales, respectively. During the years ended December 31, 2023, 2022, and 2021, sales to Costco Wholesale Corporation (“Costco”) accounted for 11%, 13%, and 12% of consolidated net sales.
(“Walmart”), accounted for 19%, 21% and 19% of consolidated net sales, respectively. During the years ended December 31, 2024, 2023, and 2022, sales to Costco Wholesale Corporation (“Costco”) accounted for 11%, 11%, and 13% of consolidated net sales.
Additional information regarding the Company’s reportable segments is included in NOTE 13 — BUSINESS SEGMENTS of the Notes to the consolidated financial statements included in Item 15. CUSTOMERS The Company’s wholesale customers include mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, food service distributors, food and beverage outlets, corporate sales and e-commerce.
CUSTOMERS The Company’s wholesale customers include mass market merchants, specialty stores, department stores, warehouse clubs, grocery stores, off-price retailers, food service distributors, food and beverage outlets, corporate sales and e-commerce.
The Company manufactures its sterling silver products at a leased facility in San Germán, Puerto Rico and fills canisters with spices and assembles spice racks at its owned distribution facility in Winchendon, Massachusetts. 5 Table of Contents BUSINESS SEGMENTS The Company has two reportable operating segments, U.S. and International.
The Company sources almost all of its products from suppliers located outside the United States, primarily in China. The Company manufactures its sterling silver products at a leased facility in San Germán, Puerto Rico and fills canisters with spices and assembles spice racks at its owned distribution facility in Winchendon, Massachusetts.
Lifetime Brands Europe Limited’s brand development and design teams, administrative teams, and distribution operate out of a state of the art facility in Aston, England.
The brand development and design teams, administrative teams, and distribution for its international operations operate out of a state of the art facility in Aston, England as well as a third-party distribution facility located in Rotterdam, Netherlands.
COMPETITION The markets for kitchenware, tableware and other products used in the home are highly competitive and include numerous domestic and foreign competitors, some of which are larger than the Company. The primary competitive factors in selling such products are innovative products, brand, quality, aesthetic appeal to consumers, packaging, breadth of product line, distribution capability and selling price.
The Company has manufacturing operations in Mexico to manufacture certain of the Company’s products. COMPETITION The markets for kitchenware, tableware and other products used in the home are highly competitive and include numerous domestic and foreign competitors, some of which are larger than the Company.
Removed
Lifetime Brands Europe Limited is a wholly-owned subsidiary doing business as Kitchen Craft. Kitchen Craft is a leading supplier of kitchenware and tableware products and accessories in the United Kingdom (“U.K.”) and in over 80 other countries.
Added
In Europe, the Company operates two wholly-owned subsidiaries to sell the Company’s products in the United Kingdom (“U.K.”) and countries within the European Union.
Removed
With the exception of the Company’s sterling silver products, the Company sources almost all of its products from suppliers located outside the United States, primarily in China.
Added
The International segment consists of certain business operations conducted outside the U.S. Additional information regarding the Company’s reportable segments is included in NOTE 12 — BUSINESS SEGMENTS of the Notes to the consolidated financial statements included in Item 15.
Removed
The Company is planning to expand its manufacturing into Mexico to manufacture certain of the Company’s products. The Company expects these operations to be fully operational in fiscal year 2024.
Added
The primary competitive factors in selling such products are innovative products, brand, quality, aesthetic appeal to consumers, packaging, breadth of product line, distribution capability and selling price. PATENTS AND LICENSES The Company owns approximately 1,050 design and utility patents.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+10 added−22 removed192 unchanged
Biggest changeThese general economic factors include, among others: • recession, inflation, deflation, unemployment and other factors adversely affecting consumer spending patterns generally; • conditions affecting the retail environment for the home and other matters that influence consumer spending in the home retail industry specifically; • conditions affecting the housing markets; • consumer credit availability and consumer debt levels; • material input costs, including fuel and energy costs, freight costs, and labor cost inflation; • foreign currency translation; • interest rates and the ability to hedge interest rate risks; • government policies including tax policies relating to value-added taxes, import and export duties and quotas, anti-dumping regulations and related tariffs, import and export controls and social compliance standards; • the impact of natural disasters, conflicts and terrorist activities; • public health epidemics, such as the COVID-19 pandemic; • unfavorable economic conditions in the United States, the U.K., continental Europe, Asia and elsewhere; • political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the repercussions of the military conflict in Ukraine, Israel and surrounding areas (and any broadening of the conflict); • the impact of the U.K.’s exit from the European Union; • unstable economic and political conditions, lack of legal regulation enforcement, civil unrest and potential accompanying shifts in laws and regulations; and The occurrence of negative events related to any of the foregoing may adversely impact the Company’s results of operations and financial condition .
Biggest changeThese general economic factors include, among others: • recession, inflation, deflation, unemployment and other factors adversely affecting consumer spending patterns generally; • government policies, including tax policies relating to value-added taxes, import and export duties and quotas, anti-dumping regulations and related tariffs, import and export controls and social compliance standards; • conditions affecting the retail environment for the home and other matters that influence consumer spending in the home retail industry specifically; • conditions affecting the housing markets; • consumer credit availability and consumer debt levels; • material input costs, including fuel and energy costs, freight costs, and labor cost inflation; • foreign currency translation; • interest rates and the ability to hedge interest rate risks; • the impact of natural disasters, conflicts and terrorist activities; • public health epidemics, such as the COVID-19 pandemic; • unfavorable economic conditions in the United States, the U.K., continental Europe, Asia and elsewhere; • political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the repercussions of the military conflict in Ukraine, Israel and surrounding areas (and any broadening of the conflict); • unstable economic and political conditions, lack of legal regulation enforcement, civil unrest and potential accompanying shifts in laws and regulations; and The occurrence of negative events related to any of the foregoing may adversely impact the Company’s results of operations and financial condition .
Accordingly, the Company is subject to various risks, including: • U.S.-imposed embargoes of sales to specific countries; • foreign import controls (which may be arbitrarily imposed or enforced); • import regulations and duties; • export regulations (which require the Company to comply with stringent licensing regimes); • anti-dumping regulations; • price and currency controls; • exchange rate fluctuations; • dividend remittance restrictions; • expropriation of assets; • war, civil uprisings and riots; • government instability; • the necessity of obtaining governmental approval for new and continuing products and operations; • legal systems or decrees, laws, taxes, regulations, interpretations and court decisions that are not always fully developed and that may be retroactively or arbitrarily applied; 19 Table of Contents • restructuring and integration of the Company's European operations; • public health epidemics; • unanticipated income taxes, excise duties, import taxes, export taxes or other governmental assessments • locating and entering into agreements with third-party logistics providers to assist in certain locations outside the United States.
Accordingly, the Company is subject to various risks, including: • U.S.-imposed embargoes of sales to specific countries; • foreign import controls (which may be arbitrarily imposed or enforced); • import regulations and duties; • export regulations (which require the Company to comply with stringent licensing regimes); • anti-dumping regulations; • price and currency controls; • exchange rate fluctuations; • dividend remittance restrictions; • expropriation of assets; • war, civil uprisings and riots; • government instability; • the necessity of obtaining governmental approval for new and continuing products and operations; • legal systems or decrees, laws, taxes, regulations, interpretations and court decisions that are not always fully developed and that may be retroactively or arbitrarily applied; • restructuring and integration of the Company's European operations; • public health epidemics; 19 Table of Contents • unanticipated income taxes, excise duties, import taxes, export taxes or other governmental assessments • locating and entering into agreements with third-party logistics providers to assist in certain locations outside the United States.
The Company holds certain rights to use the Farberware brand for kitchen tools and gadgets, cutlery, cutting boards, shears and certain other products which together represent a material portion of its sales, through a fully-paid, royalty-free license for a term that expires in 2195, subject to earlier termination under certain circumstances.
The Company holds certain rights to use the Farberware brand for kitchen tools, cutlery, cutting boards, shears and certain other products which together represent a material portion of its sales, through a fully-paid, royalty-free license for a term that expires in 2195, subject to earlier termination under certain circumstances.
Sales of KitchenAid branded products, to a lesser extent, also represent a material portion of the Company’s sales. The Company also holds a license to use the KitchenAid brand for certain products, including products for kitchen tools and gadgets, cutlery and bakeware, subject to a license agreement that will expire in December 2026.
Sales of KitchenAid branded products, to a lesser extent, also represent a material portion of the Company’s sales. The Company also holds a license to use the KitchenAid brand for certain products, including products for kitchen tools, cutlery and bakeware, subject to a license agreement that will expire in December 2026.
As a result of the Company’s acquisition of Filament, Taylor Parent has significant influence over the Company and its interests may conflict with the Company’s or its stockholders in the future. As a result of the issuance of common stock to Taylor Parent, Taylor Parent has significant influence over the Company.
As a result of the Company’s prior acquisition of Filament, Taylor Parent has significant influence over the Company and its interests may conflict with the Company’s or its stockholders in the future. As a result of the issuance of common stock to Taylor Parent, Taylor Parent has significant influence over the Company.
Under the Stockholders Agreement, for so long as Taylor Parent continues to beneficially own at least 50% of the shares it received at the consummation of the acquisition, neither the Company nor any of its subsidiaries may take any of the following actions without the approval of the directors designated by Taylor Parent, such approval not to be unreasonably withheld: (i) enter into any agreement for a transaction that would result in a change of control of the Company; (ii) consummate any transaction for the sale of all or substantially all of the Company’s assets; (iii) file for reorganization pursuant to Chapter 11, or for liquidation pursuant to Chapter 7, of the U.S.
Under the Stockholders Agreement, for so long as Taylor Parent continues to beneficially own at least 50% of the shares it received at the consummation of the acquisition, neither the Company nor any of its subsidiaries may take any of the following actions without the approval of the directors designated by Taylor Parent, such approval not to be unreasonably withheld: (i) enter into any agreement 22 Table of Contents for a transaction that would result in a change of control of the Company; (ii) consummate any transaction for the sale of all or substantially all of the Company’s assets; (iii) file for reorganization pursuant to Chapter 11, or for liquidation pursuant to Chapter 7, of the U.S.
The Company has made significant efforts to secure its computer network to mitigate the risk 21 Table of Contents of possible cyber-attacks, including, but not limited to, data breaches, and is continuously working to upgrade its existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches.
The Company has made significant efforts to secure its computer network to mitigate the risk of possible cyber-attacks, including, but not limited to, data breaches, and is continuously working to upgrade its existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches.
A disruption from such third‑party suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and products could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.
A disruption from such third‑party suppliers, 16 Table of Contents manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control issues, recalls or other decreased availability of parts and products could adversely affect our ability to meet our commitments to customers and have a material adverse effect on our business, financial condition and results of operations.
To the extent that consultants, vendors, key employees or other third parties apply technology independently developed by them or by others to the Company’s proposed products in the absence of a valid license or suitable non-disclosure or assignment of inventions provisions, 18 Table of Contents disputes may arise as to the ownership of or rights to use such technology, which may not be resolved in the Company’s favor.
To the extent that consultants, vendors, key employees or other third parties apply technology independently developed by them or by others to the Company’s proposed products in the absence of a valid license or suitable non-disclosure or assignment of inventions provisions, disputes may arise as to the ownership of or rights to use such technology, which may not be resolved in the Company’s favor.
If other parties breach confidentiality or other agreements, or if the Company’s registered intellectual property is not protected in the U.S. or foreign jurisdictions, this could harm the Company by enabling the Company’s competitors and other entities, who may have greater experience and financial resources, to copy or use the Company’s proprietary information in the advancement of their products, methods or technologies.
If other parties breach confidentiality or other agreements, or if the Company’s registered intellectual property is not protected in the U.S. or foreign jurisdictions, this could harm the Company by enabling the Company’s competitors and other entities, who may have greater 18 Table of Contents experience and financial resources, to copy or use the Company’s proprietary information in the advancement of their products, methods or technologies.
In the event that the U.S. government or foreign governments enact new climate change laws or regulations or make changes to existing laws or regulations, compliance with applicable laws or regulations may result in increased manufacturing costs for the Company’s products, such as by requiring investment in new pollution control equipment or changing the ways in which certain of the Company’s products 22 Table of Contents are made.
In the event that the U.S. government or foreign governments enact new climate change laws or regulations or make changes to existing laws or regulations, compliance with applicable laws or regulations may result in increased manufacturing costs for the Company’s products, such as by requiring investment in new pollution control equipment or changing the ways in which certain of the Company’s products are made.
The Company is also subject to the risks of currency controls and devaluations. Currency controls may limit the Company’s ability to convert currencies into U.S. dollars or other currencies, as needed, to pay dividends or make other payments from funds held by subsidiaries in countries imposing such controls, which could adversely affect the Company’s liquidity.
The Company is also subject to the risks of currency controls and devaluations. Currency controls may limit the Company’s ability to convert currencies into U.S. dollars or 12 Table of Contents other currencies, as needed, to pay dividends or make other payments from funds held by subsidiaries in countries imposing such controls, which could adversely affect the Company’s liquidity.
For further discussion of the Company’s legal proceedings refer to NOTE 14 — COMMITMENTS AND CONTINGENCIES to the Company ’ s consolidated financial statements included in this Annual Report on Form 10-K.
For further discussion of the Company’s legal proceedings refer to NOTE 13 — COMMITMENTS AND CONTINGENCIES to the Company ’ s consolidated financial statements included in this Annual Report on Form 10-K.
In particular, the concentration of the Company’s business with Walmart, Costco and Amazon extends to its international business as well as through Vasconia in Mexico and the Company’s strategic alliance in Canada, due to the market presence of Walmart, Costco and Amazon in these foreign countries.
In particular, the concentration of the Company’s business with Walmart, Costco and Amazon extends to its international business as well as through the Company’s strategic alliance in Canada, due to the market presence of Walmart, Costco and Amazon in these foreign countries.
The cost of compliance with customers’ demands could have a material adverse effect on the Company’s business, results of operations and financial condition. 14 Table of Contents Many of the Company’s wholesale customers are significantly larger than the Company, have greater financial and other resources and also purchase goods directly from vendors in Asia and elsewhere.
The cost of compliance with customers’ demands could have a material adverse effect on the Company’s business, results of operations and financial condition. Many of the Company’s wholesale customers are significantly larger than the Company, have greater financial and other resources and also purchase goods directly from vendors in Asia and elsewhere.
If the Chinese renminbi should appreciate against the U.S. dollar, the costs of the Company’s products will likely rise over time because of the impact the strengthening renminbi will have on the Company’s cost 12 Table of Contents of sales, and the Company may not be able to pass on these price increases to its customers.
If the Chinese renminbi should appreciate against the U.S. dollar, the costs of the Company’s products will likely rise over time because of the impact the strengthening renminbi will have on the Company’s cost of sales, and the Company may not be able to pass on these price increases to its customers.
The Company does not have access to its vendors’ financial 16 Table of Contents information and the Company is unable to assess its vendors’ financial condition, including their liquidity. Interruption of supplies from any of the Company’s vendors, or the loss of one or more key vendors, could have a negative effect on the Company’s business and operating results.
The Company does not have access to its vendors’ financial information and the Company is unable to assess its vendors’ financial condition, including their liquidity. Interruption of supplies from any of the Company’s vendors, or the loss of one or more key vendors, could have a negative effect on the Company’s business and operating results.
The Company’s projections are based on management’s best estimate of sales using historical sales data and other information deemed relevant. These projections 13 Table of Contents are highly subjective since sales can fluctuate substantially based on the demands of retail customers and due to other risks described in this Annual Report.
The Company’s projections are based on management’s best estimate of sales using historical sales data and other information deemed relevant. These projections are highly subjective since sales can fluctuate substantially based on the demands of retail customers and due to other risks described in this Annual Report.
Additionally, changes in retailer inventory management strategies could make the Company’s inventory management more difficult. Because the Company’s ability to forecast product demand and the timing of related sales requires significant subjective input, future sales and net income could vary materially from the Company’s projections.
Additionally, changes in retailer inventory management strategies could make the Company’s inventory 13 Table of Contents management more difficult. Because the Company’s ability to forecast product demand and the timing of related sales requires significant subjective input, future sales and net income could vary materially from the Company’s projections.
If the Company’s brick-and-mortar retail customers fail to maintain or grow their overall market position through the integration of physical retail presence and digital retail, these customers may experience financial difficulties including store closures, bankruptcies or liquidations.
If the Company’s brick-and-mortar retail customers fail to maintain or grow their overall market position through the 15 Table of Contents integration of physical retail presence and digital retail, these customers may experience financial difficulties including store closures, bankruptcies or liquidations.
If SOFR increases, the Company may not be able to rely on the Receivables Purchase Agreement, which could have a material and adverse effect upon the Company’s financial condition, results of operations and cash flows.
If SOFR increases, the Company may not be able to rely on the 11 Table of Contents Receivables Purchase Agreement, which could have a material and adverse effect upon the Company’s financial condition, results of operations and cash flows.
In addition, the Company’s business is seasonal with a significant amount of its revenue realized during the latter portion of the year. Therefore, the Company’s borrowing needs fluctuate widely based upon its seasonal working capital requirements.
In addition, the Company’s business is seasonal with a significant amount of its revenue realized during 10 Table of Contents the latter portion of the year. Therefore, the Company’s borrowing needs fluctuate widely based upon its seasonal working capital requirements.
There can be no assurance that the Company would be able to reduce its cost base to offset any such price concessions, which could adversely impact its results of operations and cash flows. 9 Table of Contents The Company’s business may be materially adversely affected by the imposition of tariffs and other trade policies implemented by the U.S. and other governments.
There can be no assurance that the Company would be able to reduce its cost base to offset any such price concessions, which could adversely impact its results of operations and cash flows. 9 Table of Contents The Company’s business may be materially adversely affected by the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments.
Decisions by large customers to increase their purchases directly from overseas vendors could have a material adverse effect on the Company’s business, results of operations and financial condition.
Decisions by large customers to increase their purchases 14 Table of Contents directly from overseas vendors could have a material adverse effect on the Company’s business, results of operations and financial condition.
The success of the Company’s online business depends, in part, on factors over which the Company may have limited control. The Company must successfully respond to changing consumer preferences and buying trends relating to Internet usage.
The success of the Company’s online business depends, in part, on factors over which the Company may have limited control. The Company must successfully respond to changing consumer preferences and online buying trends.
During the years ended December 31, 2023, 2022 and 2021, sales to Costco Wholesale Corporation (“Costco”) accounted for 11%, 13%, and 12% of consolidated net sales. During the year ended December 31, 2023, 2022 and 2021, Amazon.com Inc., (“Amazon”), accounted for 11%, 11% and 12% of consolidated net sales.
During the years ended December 31, 2024, 2023 and 2022, sales to Costco Wholesale Corporation (“Costco”) accounted for 11%, 11%, and 13% of consolidated net sales. During the year ended December 31, 2024, 2023 and 2022, Amazon.com Inc., (“Amazon”), accounted for 13%, 11% and 11% of consolidated net sales.
Significant portions of the Company’s business are dependent on trade names, trademarks and patents, some of which are licensed from third parties. In 2023, sales of licensed brands accounted for approximately 17% of the Company’s gross sales. The Company’s licenses for many of these brands require it to pay royalties based on sales.
Significant portions of the Company’s business are dependent on trade names, trademarks and patents, some of which are licensed from third parties. In 2024, sales of licensed brands accounted for approximately 18% of the Company’s gross sales. The Company’s licenses for many of these brands require it to pay royalties based on sales.
The Company’s credit agreement, dated as of March 2, 2018 (as amended, the “ABL Agreement” and as amended, the “Term Loan” the “Debt Agreements”) provides for, among other things, a maximum aggregate principal amount of $200.0 million and will mature on August 25, 2027.
The Company’s credit agreement, dated as of March 2, 2018 (as amended, the “ABL Agreement”) provides for, among other things, a maximum aggregate principal amount of $200.0 million and will mature on August 25, 2027.
In addition, as a result of the desire of retailers to more closely manage inventory levels and optimize their supply chains, there is a growing trend among retailers to evaluate suppliers based on their ability to deliver orders at the quantity and schedule specified, which is known as the "on-time-in-full" delivery metric.
In addition, as a result of the desire of retailers to more closely manage inventory levels and optimize their supply chains, retailers may evaluate suppliers based on their ability to deliver orders at the quantity and schedule specified, which is known as the "on-time-in-full" delivery metric.
Changes at the Company’s large customers, or actions taken by them, and consolidation in the retail industry could materially adversely affect the Company’s operating results. During the years ended December 31, 2023, 2022 and 2021, Wal-Mart Stores, Inc., including Sam’s Club, (“Walmart”), accounted for 21%, 19% and 18% of consolidated net sales, respectively.
Changes at the Company’s large customers, or actions taken by them, and consolidation in the retail industry could materially adversely affect the Company’s operating results. During the years ended December 31, 2024, 2023 and 2022, Wal-Mart Stores, Inc. (“Walmart”), accounted for 19%, 21% and 19% of consolidated net sales, respectively.
The rapidly changing retail environment could result in the loss of, or a material reduction in, sales to the Company’s brick-and-mortar customers, which could materially adversely affect the Company’s business, results of operations, financial condition and cash flows. The retail environment is highly competitive and rapidly evolving with the increase pace of technological development.
The rapidly changing retail environment could result in the loss of, or a material reduction in, sales to the Company’s brick-and-mortar customers, which could materially adversely affect the Company’s business, results of operations, financial condition and cash flows. The retail environment is highly competitive and rapidly evolving with the increase pace of technological development. Consumers are increasingly embracing shopping online.
The Company has a substantial amount of indebtedness and is dependent on the availability of its bank loan facilities to finance its liquidity needs. As of December 31, 2023, the Company had $210.4 million of consolidated debt outstanding under a senior secured term loan credit facility and senior secured asset-based revolving credit facility.
The Company has a substantial amount of indebtedness and is dependent on the availability of its bank loan facilities to finance its liquidity needs. As of December 31, 2024, the Company had $185.2 million of consolidated debt outstanding under a senior secured term loan credit facility and senior secured asset-based revolving credit facility.
The cost of producing and distributing the Company’s products is also sensitive to energy costs, duties and tariffs. For example, freight costs increased in 2021, continued to fluctuate in 2022 and began to decrease in 2023. The Company is unable to determine to what extent, if any, it will be able to pass future cost increases through to its customers.
The cost of producing and distributing the Company’s products is also sensitive to energy costs, duties and tariffs. For example, freight costs significantly increased in 2022 and began to return to lower levels in 2023. The Company is unable to determine to what extent, if any, it will be able to pass future cost increases through to its customers.
The Company’s borrowings bear interest at floating rates. An increase in interest rates would adversely affect the Company’s profitability. For example, in 2023 interest expense increased by $4.5 million compared to the prior year as a result of a higher interest rate environment.
The Company’s borrowings bear interest at floating rates. An increase in interest rates would adversely affect the Company’s profitability. For example, in 2024 interest expense increased by $0.5 million compared to the prior year as a result of a higher interest rate environment, partially offset by lower average outstanding borrowings.
The licensor is a joint venture of which the Company is a 50% 17 Table of Contents owner.
The licensor is a joint venture of which the Company is a 50% owner.
A majority of the Company’s products are sourced from vendors in China. During the last several years there have also been significant changes to U.S. trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting China. These changes have, in certain cases, increased our costs of doing business.
A majority of the Company’s products are sourced from vendors outside the U.S. During the last several years there have also been significant changes to U.S. trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting products from outside of the U.S.
As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.’s or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S. or other countries. Legislative or regulatory initiatives related to climate change could have a material adverse effect on our business.
As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.’s or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S. or other countries.
The Company’s increased dependence on third parties for cloud-based systems may also subject the Company to further cyber threats. There can be no assurance that the Company will not suffer a material adverse effect resulting from vulnerabilities in widely deployed software used by third parties. The Company sells consumer products which involve an inherent risk of product liability claims.
There can be no assurance that the Company will not suffer a material adverse effect resulting from vulnerabilities in widely deployed software used by third parties. 21 Table of Contents The Company sells consumer products which involve an inherent risk of product liability claims.
At December 31, 2023, borrowings under the Debt Agreements represented approximately 32% of total capital (indebtedness plus stockholders’ equity). 10 Table of Contents In 2018, the Company utilized the proceeds of borrowings under the Debt Agreements (i) to repay in full all existing indebtedness for borrowed money under its former credit agreement and (ii) to finance, in part, the acquisition of Filament, the refinancing of certain indebtedness of Filament and its subsidiaries, and the payment of fees and expenses in connection with the foregoing.
In 2018, the Company utilized the proceeds of borrowings under the Debt Agreements (collectively, the ABL Agreement and Term Loan) (i) to repay in full all existing indebtedness for borrowed money under its former credit agreement and (ii) to finance, in part, the acquisition of Filament, the refinancing of certain indebtedness of Filament and its subsidiaries, and the payment of fees and expenses in connection with the foregoing.
The other 50% owner of the joint venture has the right to terminate the Company’s license if the Company materially breaches any of the material terms of the license and fails to cure the material breach within 180 days of notice of the breach, if it is determined in an arbitration proceeding that money damages alone would not be sufficient compensation to the licensor and that the breach is so egregious as to warrant termination of the license and forfeiture of the Company’s rights to use the brand under that license agreement.
The other 50% owner of the joint venture has the right to terminate the Company’s license if the Company materially breaches any of the material terms of the license and fails to cure the material breach within 180 days of notice of the breach, if it is determined in an arbitration proceeding that money damages alone would not be sufficient compensation to the licensor and that the breach is so egregious as to warrant termination of the license and forfeiture of the Company’s rights to use the brand under that license agreement. 17 Table of Contents If the Company were to lose the Farberware license for kitchen tools, cutlery, cutting boards, shears and certain other products through termination as a result of an uncured breach, its business, results of operations and financial condition would be materially adversely affected.
To the extent that the Company’s access to credit may be restricted because of its own performance, its bank lenders’ performances or conditions in the capital markets generally, the Company would not be able to operate normally. 11 Table of Contents The Company’s Receivables Purchase Agreement also depends upon the Secured Overnight Financing rate (“SOFR”), as it is a component of the discount rate applicable to the agreement.
To the extent that the Company’s access to credit may be restricted because of its own performance, its bank lenders’ performances or conditions in the capital markets generally, the Company would not be able to operate normally.
A portion of the Company’s long-term assets consists of goodwill recorded as a result of the Company’s acquisitions; other identifiable intangible assets, including trade names; and long-lived assets.
A portion of the Company’s long-term assets consists of goodwill recorded as a result of the Company’s acquisitions; other identifiable intangible assets, including trade names; and long-lived assets. At December 31, 2024, goodwill, net of accumulated impairment charges totaled $33.2 million; finite-lived intangible assets, net of accumulated impairment charges and accumulated amortization totaled $150.3 million.
Per the Debt Agreements, when the Company makes an Excess Cash Flow payment, the payment is first applied to satisfy the future quarterly required payments in order of maturity. This amount is recorded in the current maturity of the Term Loan on the consolidated balance sheets.
The Term Loan requires the Company to make an annual mandatory prepayment of principal based upon excess cash flow (the “Excess Cash Flow”), if any. Per the Debt Agreements, when the Company makes an Excess Cash Flow payment, the payment is first applied to satisfy the future quarterly required payments in order of maturity.
The Company is subject to cyber security risks and may incur increasing costs in efforts to minimize those risks and to comply with regulatory standards.
Failure to successfully navigate these risks could have a material adverse effect on the Company’s business and results of operations. The Company is subject to cyber security risks and may incur increasing costs in efforts to minimize those risks and to comply with regulatory standards.
A failure in or compromise of the Company’s operating systems or infrastructure or those of third parties could disrupt the Company’s business and cause losses.
This potential negative impact on the Company’s e-commerce business could have a material adverse effect on the Company’s overall business, results of operations and financial condition. 20 Table of Contents A failure in or compromise of the Company’s operating systems or infrastructure or those of third parties could disrupt the Company’s business and cause losses.
On November 14, 2023, the Company entered into Amendment No. 2 of the senior secured term loan credit facility, dated as of March 2, 2018, (as amended, the “Term Loan”), which among other things, reduced the outstanding principal amount of $150.0 million and extended the maturity to August 26, 2027.
The Company’s loan agreement, dated as of March 2, 2018 (as amended, the “Term Loan”), has a principal amount of $150.0 million, and matures on August 26, 2027. The Term Loan will be repaid in quarterly payments of principal equal to 1.25% of the original aggregate principal amount of the Term Loan, which payments commenced on March 31, 2024.
Removed
Greenhouse gases may have an adverse effect on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. Such events could have a negative effect on the Company’s business.
Added
For example, in early 2025, the current U.S. presidential administration announced significant new tariffs on foreign imports into the U.S., specifically from Mexico, Canada, and China, and has proposed additional new tariffs that may be implemented in the future.
Removed
Concern over climate change may result in new or additional legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation, and utility increases and could, in turn, have a material adverse effect on the Company’s business.
Added
Given the Company’s reliance upon non-domestic suppliers, any significant changes to the U.S. trade policies (and those of other countries in response) or changes without sufficient notice may cause a material adverse effect on its ability to source products from other countries or significantly increase the costs of obtaining such products, which could result in a material adverse effect on our financial results.
Removed
There is also increased focus, including by investors, customers, and other stakeholders, on these and other sustainability matters, including the use of plastic, energy, waste, and worker safety.
Added
The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.
Removed
The Company’s reputation could be damaged if the Company does not, or is perceived to not, act responsibly with respect to sustainability matters, which could also have a material adverse effect on the Company’s business, results of operations, financial position, and cash flows.
Added
Any new or additional tariffs on goods imported to the U.S. from China, Mexico, Canada, or other countries, or products imported into the European Union or other non-U.S. markets, could also increase the cost of some of our products and reduce our margins.
Removed
The Term Loan will be repaid in quarterly payments of principal equal to 1.25% of the original aggregate principal amount of the Term Loan, which payments will commence on March 31, 2024. The Term Loan requires the Company to make an annual mandatory prepayment of principal based upon excess cash flow (the “Excess Cash Flow”), if any.
Added
This amount is recorded in the current maturity of the Term Loan on the consolidated balance sheets. At December 31, 2024, borrowings under the Debt Agreements represented approximately 29% of total capital (indebtedness plus stockholders’ equity).
Removed
At December 31, 2023, goodwill, net of accumulated impairment charges totaled $33.2 million; indefinite-lived intangibles assets, net of accumulated impairment charges totaled $42.0 million; finite-lived intangible assets, net of accumulated impairment charges and accumulated amortization totaled $123.9 million.
Added
The Company’s Receivables Purchase Agreement also depends upon the Secured Overnight Financing rate (“SOFR”), as it is a component of the discount rate applicable to the agreement.
Removed
Consumers are increasingly embracing shopping online and through mobile commerce applications. This trend accelerated during the COVID-19 15 Table of Contents pandemic due to fear of infection, stay-at-home orders, quarantine policies and restrictions on travel, trade, and brick-and-mortar retail business operations.
Added
In January 2025, the Company announced the relocation of its east coast distribution facility currently located in Robbinsville, NJ (the “Robbinsville Facility”) to a warehouse and distribution space in Hagerstown, Maryland (the “Hagerstown Facility”).
Removed
If the Company were to lose the Farberware license for kitchen tools and gadgets, cutlery, cutting boards, shears and certain other products through termination as a result of an uncured breach, its business, results of operations and financial condition would be materially adversely affected.
Added
The Hagerstown Facility is a new built to suit distribution center and will require an investment of capital expenditures of approximately $10 million for equipment and certain leasehold improvements. The Company expects to incur one-time costs to close its Robbinsville Facility of up to $7 million as well as one-time relocation costs of up to $7 million.
Removed
This potential negative impact on the Company’s e-commerce business could have a material adverse effect on the Company’s overall business, results of operations and financial condition. 20 Table of Contents Climate change, environmental, social and governance and sustainability initiatives may result in regulatory or structural industry changes that could require significant operational changes and expenditures, reduce demand for the Company’s products and adversely affect our business, financial condition, and results of operations.
Added
Additionally, the Company’s purchases that are to be delivered this new distribution facility will require the Company to arrange for transportation, primarily by sea, from ports in Asia and Europe to a new port in the United States. The relocation subjects the Company to certain risks such as delays in construction, increase in exit and relocation costs, and transportation risks.
Removed
Greenhouse gases may have an adverse effect on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. Such events could have a negative effect on our business.
Added
The Company’s increased dependence on third parties for cloud-based systems may also subject the Company to further cyber threats.
Removed
Concern over climate change may result in new or additional legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation cost, and utility increases.
Removed
Moreover, natural disasters and extreme weather conditions may impact the productivity of our facilities, the operation of our supply chain, or consumer buying patterns. Any of these risks could have a material adverse effect on our business.
Removed
Climate change, environmental, social and governance and sustainability initiatives may result in regulatory or structural industry changes that could require significant operational changes and expenditures, reduce demand for the Company’s products and adversely affect our business, financial condition, and results of operations. Climate change, environmental, social and governance (“ESG”) and sustainability are a growing global movement.
Removed
Continuing political and social attention to these issues has resulted in both existing and pending international agreements and national, regional and local legislation, regulatory measures, reporting obligations and policy changes. Also, there is increasing societal pressure in some of the areas where we operate, to limit greenhouse gas emissions as well as other global initiatives.
Removed
These agreements and measures, including the Paris Climate Accord, may require, or could result in future legislation, regulatory measures or policy changes that would require operational changes, taxes, or purchases of emission credits to reduce emission of greenhouse gases from our operations, which may result in substantial capital expenditures.
Removed
Furthermore, increasing attention to climate change, ESG and sustainability has resulted in governmental investigations, and public and private litigation, which could increase our costs or otherwise adversely affect our business or results of operations.
Removed
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions.
Removed
Unfavorable ESG ratings may lead to increased negative investor sentiment toward us, which could have a negative impact on the price of our securities and our access to and costs of capital.
Removed
Additionally, on March 21, 2022, the SEC released proposed rule changes that would require new climate-related disclosure in SEC filings, including certain climate-related metrics and greenhouse gas emissions, information about climate-related targets and goals, transition plans, if any, and extensive attestation requirements.
Removed
In addition to requiring filers to quantify and disclose direct emissions data, the new rules would also require disclosure of climate impact arising from the operations and uses by the filer’s business partners and contractors and end-users of the filer’s products and/or services.
Removed
If adopted as proposed, the rule changes could result in the Company incurring material additional compliance and reporting costs, including monitoring, collecting, analyzing and reporting the new metrics and implementing systems and procuring additional internal and external personnel with the requisite skills and expertise to serve those functions.
Removed
Any or all of these ESG and sustainability initiatives and regulations are likely to result in significant operational changes and expenditures, reduced demand for our products, cause us reputational harm, and could materially adversely affect our business, financial condition, and results of operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−2 removed8 unchanged
Biggest changeThe Chief Information Officer in turn reports to the EVP, Global Supply Chain & Import who is responsible for the Company’s management of cybersecurity risk. Through these activities and monitoring, both internally and externally, any events or incidents identified will be escalated to the appropriate Business Team Member in accordance with the Company’s Incident Management Plan.
Biggest changeThrough these activities and monitoring, both internally and externally, any events or incidents identified will be escalated to the appropriate Business Team Member in accordance with the Company’s Incident Management Plan. The Company engages with third-party experts, including cybersecurity focused Security Operations Center (SOC) and leading-edge EDR providers, to assist in evaluating and detecting security risk and initiate corrective actions.
The Company’s process includes risk assessment activities, such as security assessments of all third-party providers, policies such as “minimum required access” to ensure compliance with current cybersecurity standards and monitoring activities, such as the review of potential cyber breaches announcements made by the third-party service providers.
The Company has stringent processes to oversee and manage risk with these third parties. The Company’s process includes risk assessment activities, such as security assessments of all third-party providers, policies such as “minimum required access” to ensure compliance with current cybersecurity standards and monitoring activities, such as the review of potential cyber breaches announcements made by the third-party service providers.
The collaboration with these third parties includes regular audits, threat assessments, and consultation on security enhancements. The Company uses third-party service providers in various functions throughout its business. The Company has stringent processes to oversee and manage risk with these third parties.
These partnerships enable the Company to leverage specialized knowledge and insights, ensuring cybersecurity strategies and processes remain aligned with industry best practices. The collaboration with these third parties includes regular audits, threat assessments, and consultation on security enhancements. The Company uses third-party service providers in various functions throughout its business.
The Company’s Infrastructure Director is responsible for managing cybersecurity risks, including the prevention, detection, mitigation, and remediation of cybersecurity incidents.
The Company’s Infrastructure Director is responsible for managing cybersecurity risks, including the prevention, detection, mitigation, and remediation of cybersecurity incidents. The Infrastructure Director has 20 years of experience in the creation and management of enterprise security risk programs. The Infrastructure Director reports to the EVP, Global Supply Chain & Import, who oversees the Company’s management of cybersecurity risk.
Removed
The Infrastructure Director has 20 years of experience in the creation and management of enterprise security risk programs.The Infrastructure Director reports to the Chief Information Officer, who actively engages to monitor IT activities and has 40 years of Enterprise Security Management Experience as well as membership in a CIO peer group that reviews local cybersecurity concerns on a regular basis.
Removed
The Company engages with third-party experts, including cybersecurity focused Security Operations Center (SOC) and leading-edge (EDR) providers, to assist in evaluating and detecting security risk and initiate corrective actions. These partnerships enable the Company to leverage specialized knowledge and insights, ensuring cybersecurity strategies and processes remain aligned with industry best practices.

Item 2. Properties

Properties — owned and leased real estate

1 edited+2 added−1 removed0 unchanged
Biggest changeProperties The following table lists the principal properties at which the Company operated its business at December 31, 2023: Location Description Size (square feet) Owned/ Leased Rialto, California (1) West Coast warehouse and distribution facility 703,000 Leased Robbinsville, New Jersey (1) Principal East Coast warehouse and distribution facility 700,000 Leased Aston, England (2) Offices, showroom, warehouse and distribution facility 250,000 Leased Winchendon, Massachusetts (1) Warehouse and distribution facility, and spice packing line 175,000 Owned Garden City, New York (3) Corporate headquarters/main showroom 159,000 Leased Las Cruces, New Mexico (1) Offices, warehouse and distribution facility 56,000 Leased San Germán, Puerto Rico (1) Sterling silver manufacturing facility 55,000 Leased Medford, Massachusetts (1) Offices, showroom, warehouse and distribution facility 44,000 Leased Oak Brook, Illinois (1) Offices 18,000 Leased Seattle, Washington (1) Offices 17,500 Leased Shanghai, China (3) Offices 16,300 Leased New York, New York (1) Offices and showrooms 12,000 Leased Atlanta, Georgia (1) Showrooms 11,000 Leased Guangzhou, China (3) Offices 10,000 Leased Bentonville, Arkansas (1) Offices and showroom 7,000 Leased Newtown, Pennsylvania (1) Offices 5,900 Leased Pawtucket, Rhode Island (1) Offices and showroom 4,900 Leased Menomonee Falls, Wisconsin (1) Showroom 4,000 Leased Tianjin, China (3) Offices 2,400 Leased Minneapolis, Minnesota (1) Offices 1,956 Leased Kowloon, Hong Kong (3) Offices 1,814 Leased Issaquah, Washington (1) Offices and showroom 1,125 Leased (1) Location primarily used by the U.S. segment.
Biggest changeProperties The following table lists the principal properties at which the Company operated its business at December 31, 2024: Location Description Size (square feet) Owned/ Leased Rialto, California (1) West Coast warehouse and distribution facility 703,000 Leased Robbinsville, New Jersey (1)(4) Principal East Coast warehouse and distribution facility 700,000 Leased Aston, England (2) Offices, showroom, warehouse and distribution facility 250,000 Leased Winchendon, Massachusetts (1) Warehouse and distribution facility, and spice packing line 175,000 Owned Garden City, New York (3) Corporate headquarters/main showroom 159,000 Leased Las Cruces, New Mexico (1) Offices, warehouse and distribution facility 56,000 Leased San Germán, Puerto Rico (1) Sterling silver manufacturing facility 55,000 Leased Medford, Massachusetts (1) Offices, showroom, warehouse and distribution facility 44,000 Leased Oak Brook, Illinois (1) Offices 18,000 Leased Seattle, Washington (1) Offices 17,500 Leased Shanghai, China (3) Offices 16,300 Leased New York, New York (1) Offices and showrooms 12,000 Leased Chihuahua, Mexico Manufacturing facility 12,000 Leased Atlanta, Georgia (1) Showrooms 11,000 Leased Guangzhou, China (3) Offices 10,000 Leased Bentonville, Arkansas (1) Offices and showroom 7,000 Leased Newtown, Pennsylvania (1) Offices 5,900 Leased Pawtucket, Rhode Island (1) Offices and showroom 4,900 Leased Menomonee Falls, Wisconsin (1) Showroom 4,000 Leased Tianjin, China (3) Offices 2,400 Leased Minneapolis, Minnesota (1) Offices 1,956 Leased Kowloon, Hong Kong (3) Offices 1,814 Leased Issaquah, Washington (1) Offices and showroom 1,125 Leased (1) Location primarily used by the U.S. segment.
Removed
(2) Location used by the International segment. (3) Location used by both segments. 25 Table of Contents
Added
(2) Location used by the International segment. (3) Location used by both segments. (4) In January 2025, the Company entered into a lease agreement for warehouse and distribution space in Hagerstown, Maryland (the “Hagerstown Facility”). The Company expects that the facility will be operational by the second quarter of 2026.
Added
The Facility will serve as the Company’s primary east coast distribution facility primarily for its U.S. segment, which will replace the Company’s existing Robbinsville, New Jersey facility, the lease for which expires in November 2026. 25 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For a description of our legal proceedings, please see NOTE 14 — COMMITMENTS AND CONTINGENCIES, to the Company's consolidated financial statements included in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosure Not applicable. 26 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings For a description of our legal proceedings, please see NOTE 13 — COMMITMENTS AND CONTINGENCIES, to the Company's consolidated financial statements included in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosure Not applicable. 26 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed5 unchanged
Biggest changeHemscott Group Index New Peer Group Nasdaq Market Index 12/31/2018 (1)(2) $ 100.00 $ 100.00 $ 100.00 $ 100.00 12/31/2019 $ 70.62 $ 108.44 $ 123.33 $ 136.69 12/31/2020 $ 157.60 $ 128.82 $ 152.95 $ 198.10 12/31/2021 $ 167.46 $ 137.51 $ 193.01 $ 242.03 12/31/2022 $ 80.79 $ 85.83 $ 130.55 $ 163.28 12/31/2023 $ 73.55 $ 59.80 $ 142.56 $ 236.17 (1) The graph assumes $100 was invested as of the close of trading on December 31, 2018 and dividends were reinvested.
Biggest changeHemscott Group Index New Peer Group Old Peer Group Nasdaq Market Index 12/31/2019 (1)(2) $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 12/31/2020 $ 223.17 $ 118.80 $ 133.63 $ 124.02 $ 144.92 12/31/2021 $ 237.14 $ 126.81 $ 155.76 $ 156.51 $ 177.06 12/31/2022 $ 114.40 $ 79.15 $ 92.38 $ 105.86 $ 119.45 12/31/2023 $ 104.16 $ 55.14 $ 103.84 $ 115.60 $ 172.77 12/31/2024 $ 93.80 $ 64.94 $ 75.92 $ 108.50 $ 223.87 (1) The graph assumes $100 was invested as of the close of trading on December 31, 2019 and dividends were reinvested.
All rights reserved. Copyright 1980-2024. Index Data: Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved. Item 6. [Reserved] 28 Table of Contents
Used with permission. All rights reserved. Copyright 1980-2024. Index Data: Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved. Item 6. [Reserved] 28 Table of Contents
The Company is authorized to issue 100 shares of Series A Preferred stock and 2,000,000 shares of Series B Preferred stock, none of which were issued or outstanding at December 31, 2023. For a discussion of dividends paid by the Company in 2023 and 2022, refer to Item 7.
The Company is authorized to issue 100 shares of Series A Preferred stock and 2,000,000 shares of Series B Preferred stock, none of which were issued or outstanding at December 31, 2024. For a discussion of dividends paid by the Company in 2024 and 2023, refer to Item 7.
Peer Group comprises Acushnet Holdings Corp., Crocs, Inc., Hamilton Beach Brands Holding Co., Helen of Troy Ltd., Lands’ End, Inc., Johnson Outdoors Inc., Movado Group, Inc., Oxford Industries, Inc., The Buckle, Inc. and Tupperware Brands Corp., Unifi, Inc., Universal Electronics Inc., Vera Bradley, Inc., YETI Holdings, Inc. (2) The graph was prepared by Zacks Investment Research, Inc. Used with permission.
Old peer Group comprises of Acushnet Holdings Corp., Crocs, Inc., Hamilton Beach Brands Holding Co., Helen of Troy Ltd., Lands’ End, Inc., Johnson Outdoors Inc., Movado Group, Inc., Oxford Industries, Inc., The Buckle, Inc. and Tupperware Brands Corp., Unifi, Inc., Universal Electronics Inc., Vera Bradley, Inc., YETI Holdings, Inc. (2) The graph was prepared by Zacks Investment Research, Inc.
Measurement points are at the last trading day of each of the fiscal years ended December 31, 2019, 2020, 2021, 2022 and 2023.
Measurement points are at the last trading day of each of the fiscal years ended December 31, 2020, 2021, 2022, 2023 and 2024.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded under the symbol “LCUT” on the Nasdaq Global Select Market (“Nasdaq”). At February 29, 2024, the Company estimates that there were approximately 3,881 record holders of the Company’s common stock.
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded under the symbol “LCUT” on the Nasdaq Global Select Market (“Nasdaq”). At February 28, 2025, the Company estimates that there were approximately 3,782 record holders of the Company’s common stock.
Added
New peer group comprises of The Buckle, Inc., Delta Apparel, Inc., Unifi, Inc., Universal Electronics Inc., iRobot Corporation, Hamilton Beach Brands Holding Company, Helen of Troy Limited, Vera Bradley, Inc., Johnson Outdoors Inc., Lands’ End, Movado Group, Inc., Oxford Industries, Inc., JAKKS Pacific, Inc., YETI Holdings, Inc., Solo Brands, Inc., Superior Group of Companies.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

102 edited+36 added−51 removed49 unchanged
Biggest changeThe effective tax rate in 2023 and 2022 was driven primarily by state and local tax expenses, nondeductible expenses, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.
Biggest changeThe effective tax rate in 2024 differs from the federal statutory rate primarily due to state and local tax expense, nondeductible expenses and losses, and UK foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance, offset by a reduction in the Company’s accrual for uncertain tax positions and the release of the valuation allowance on foreign losses in the Netherlands. 33 Table of Contents The effective tax rate in 2023 differs from the federal statutory rate primarily due to state and local tax expense, nondeductible expenses, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.
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. Revenue recognition The Company sells products wholesale, to retailers and distributors, and sells products retail, directly to consumers.
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. Revenue recognition The Company sells products wholesale, to retailers and distributors, and retail, directly to consumers.
The ABL Agreement provides for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $200.0 million, which will mature on August 26, 2027.
The ABL Agreement provides for a senior secured asset-based revolving credit facility in the maximum aggregate principal amount of $200.0 million, which facility will mature on August 26, 2027.
The Company’s product categories include two categories of products used to prepare, serve and consume foods, Kitchenware (kitchen tools and gadgets, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks and bakeware) and Tableware (dinnerware, stemware, flatware and giftware); and one category, Home Solutions, which comprises other products used in the home (thermal beverageware, bath scales, weather and outdoor household products, food storage, neoprene travel products and home décor).
The Company’s product categories include two categories of products used to prepare, serve and consume foods, Kitchenware (kitchen tools, cutlery, kitchen scales, thermometers, cutting boards, shears, cookware, pantryware, spice racks and bakeware) and Tableware (dinnerware, stemware, flatware and giftware); and one category, Home Solutions, which comprises other products used in the home (thermal beverageware, bath scales, weather and outdoor household products, food storage, neoprene travel products and home décor).
The Term Loan facility bears interest, at the Company’s option, at one of the following rates: (i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.50% or (z) one-month Adjusted Term SOFR, but not less than 1.0% plus 1.0%, plus a margin of 4.5% or (ii) Adjusted Term SOFR (Term SOFR plus the Term SOFR Adjustment) for the applicable interest period, but not less than 1.0%, plus a margin of 5.5%.
The Term Loan bears interest, at the Company’s option, at one of the following rates: (i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.5% or (z) one-month Adjusted Term SOFR, but not less than 1.0% , plus 1.0%, plus a margin of 4.5% or (ii) Adjusted Term SOFR (Term SOFR plus the Term SOFR Adjustment) for the applicable interest period, but not less than 1.0%, plus a margin of 5.5%.
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 FASB’s ASU Topic 350, Intangibles – Goodwill and Other.
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 FASB’s ASC Topic 350, Intangibles – Goodwill and Other.
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. The Company also evaluates qualitative factors to determine whether or not its indefinite lived intangibles have been impaired and then performs quantitative tests if required.
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. The Company also evaluates qualitative factors to determine whether or not its indefinite-lived intangible have been impaired and then performs quantitative tests if required.
Such security interests consists of (1) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “ABL Collateral”) pledged as collateral in favor of lenders under the ABL Agreement and a second-priority lien in the ABL Collateral in favor of the lenders under the Term Loan and (2) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “Term Loan Collateral”) pledged as collateral in favor of lenders under the Term Loan and a second-priority lien in the Term Loan Collateral in favor of the lenders under the ABL Agreement.
Such security interests consist of (1) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “ABL Collateral”) pledged as collateral in favor of lenders under the ABL Agreement and a second-priority lien in the ABL Collateral in favor of the lenders under the Term Loan and (2) a first-priority lien, subject to certain permitted liens, with respect to certain assets of the Company and certain of its subsidiaries (the “Term Loan Collateral”) pledged as collateral in favor of lenders under the Term Loan and a second-priority lien in the Term Loan Collateral in favor of the lenders under the ABL Agreement.
The obligations of the Company under the Debt Agreements and any hedging arrangements and cash management services and the guarantees by its domestic subsidiaries in respect of those obligations are secured by security interests in substantially all of the assets and stock (but in the case of foreign subsidiaries, limited to 65% of the capital stock in first-tier foreign subsidiaries and not including the stock of subsidiaries of such first-tier foreign subsidiaries) owned by the Company and the U.S. subsidiary guarantors, subject to certain exceptions.
The obligations of the Company under the Debt Agreements and any hedging arrangements 38 Table of Contents and cash management services and the guarantees by its domestic subsidiaries in respect of those obligations are secured by security interests in substantially all of the assets and stock (but in the case of foreign subsidiaries, limited to 65% of the capital stock in first-tier foreign subsidiaries and not including the stock of subsidiaries of such first-tier foreign subsidiaries) owned by the Company and the U.S. subsidiary guarantors, subject to certain exceptions.
For a discussion of 2022 compared to 2021 refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations”, in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
For a discussion of 2023 compared to 2022 refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations”, in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
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.
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.
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.
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 34 Table of Contents non-cash impairment charges that could be material to the Company’s consolidated balance sheet or results of operations.
The reorganization was the result of the Company’s efforts to realign the management and operating structure of the European business in response to changing market conditions. In 2022, the Company’s U.S. segment incurred $0.4 million of restructuring expense in connection with the reorganization of the U.S. segment’s sales management structure. The payment was made in 2023.
The reorganization was the result of the Company’s efforts to realign the management and operating structure of the European business in response to changing market conditions. In 2022, the Company’s U.S. segment incurred $0.4 million of restructuring expense in connection with the reorganization of the U.S. segment’s sales management structure.
The borrowing capacity under the ABL Agreement will depend, in part, on eligible levels of accounts receivable and inventory that fluctuate regularly. Due to the seasonality of the Company’s business, this mean that it may have greater borrowing availability during the third and fourth quarters of each year. Consequently, the $200.0 million commitment thereunder may not represent actual borrowing capacity.
The borrowing capacity under the ABL Agreement will depend, in part, on eligible levels of accounts receivable and inventory that fluctuate regularly. Due to the seasonality of the Company’s business, the Company may have greater borrowing availability during the third and fourth quarters of each year. Consequently, the $200.0 million commitment thereunder may not represent actual borrowing capacity.
The Company performed the analysis using a discounted cash flow and market multiple method. As of October 1, 2023, the fair value of the U.S. reporting unit exceeded the carrying value of goodwill by 4%.
The Company performed the analysis using a discounted cash flow and market multiple method. As of October 1, 2024, the fair value of the U.S. reporting unit exceeded the carrying value of goodwill by 5.4%.
Adjusted EBITDA is defined as net income (loss), adjusted to exclude undistributed equity in (earnings) losses, income tax provision (benefit), interest expense, depreciation and amortization, mark to market (gain) loss on interest rate derivatives, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.
Adjusted EBITDA is defined as net (loss) income, adjusted to exclude equity in losses, net of taxes, income tax (benefit) provision, interest expense, depreciation and amortization, mark to market loss (gain) on interest rate derivatives, stock compensation expense, (gain) loss on extinguishments of debt, net, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.
MATERIAL CASH REQUIREMENTS The Company’s material cash requirements include the following: Debt As of December 31, 2023, the Company had an outstanding Term Loan facility, which matures on August 26, 2027, for an aggregate principal amount of $150.0 million, with $7.5 million amounts due within 12 months.
MATERIAL CASH REQUIREMENTS The Company’s material cash requirements include the following: Debt As of December 31, 2024, the Company had an outstanding Term Loan facility, which matures on August 26, 2027, for an aggregate principal amount of $142.5 million, with $7.5 million amounts due within 12 months.
These sales incentives and promotions represent variable consideration and are reflected as reductions in net sales in the Company’s consolidated statements of operations.
These sales incentives and promotions represent variable consideration and are reflected as reductions 35 Table of Contents in net sales in the Company’s consolidated statements of operations.
On November 14, 2023, the Company entered into Amendment No. 2 (the “Term Loan Amendment”) to amend the Loan Agreement, dated as of March 2, 2018, among the Company, as borrower, the other loan parties from time to time party thereto, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (as amended, the “Term Loan”).
On November 14, 2023, the Company entered into Amendment No. 2 to amend the Loan Agreement, dated as of March 2, 2018, among the Company, as borrower, the other loan parties from time to time party thereto, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (as amended, the “Term Loan” and together with the ABL Agreement, the “Debt Agreements”).
In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2023 average rates to 2022 local currency amounts, net sales decreased $41.0 million, or 5.6%, as compared to consolidated net sales in the corresponding period in 2022.
In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2024 average rates to 2023 local currency amounts, net sales decreased $5.1 million, or 0.7%, as compared to consolidated net sales in the corresponding period in 2023.
Projected net sales for the related brands and royalty rates were determined to be significant assumptions because they are the primary drivers of the projected cash flows in the relief from royalty model.
Projected net sales for the related brand and royalty rate were determined to be significant assumptions because they are the primary drivers of the projected cash flows in the relief from royalty model.
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.
Refer to NOTE 12 — BUSINESS SEGMENTS 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.
The interest rate on outstanding borrowings under the Term Loan at December 31, 2023 was 11.0%. The Debt Agreements provide for customary restrictions and events of default. Restrictions include limitations on additional indebtedness, liens, acquisitions, investments and payment of dividends, among other things.
The interest rate on outstanding borrowings under the Term Loan at December 31, 2024 was 10.06%. The Debt Agreements provide for customary restrictions and events of default. Restrictions include limitations on additional indebtedness, liens, acquisitions, investments and payment of dividends, among other things.
These tests can include the relief from royalty model or other valuation models. The significant assumptions used in the relief from royalty model are future net sales for the related brands, royalty rates and the cost of capital to determine the fair value of the indefinite lived intangibles.
These tests can include the relief from royalty model or other valuation models. The significant assumptions used in the relief from royalty model are future net sales for the related brand, royalty rate and the cost of capital to determine the fair value of the indefinite lived intangible.
The Company’s borrowing capacity may be further limited by the Term Loan financial covenant of 5.00 to 1.00 maximum Total Net Leverage Ratio. As of December 31, 2023, the availability under the ABL Agreement, limited by the Term Loan financial covenant, was $89.4 million.
The Company’s borrowing capacity may be further limited by the Term Loan financial covenant of 5.00 to 1.00 maximum Total Net Leverage Ratio. As of December 31, 2024, the availability under the ABL Agreement, limited by the Term Loan financial covenant, was $82.8 million.
In 2022, the Company incurred $0.6 million of unallocated expense related to the termination payment with its Executive Chairman, Jeffrey Siegel. On November 1, 2022, the Company entered into a transition agreement with Jeffrey Siegel, which terminated his employment with the Company, effective March 31, 2023. The transition agreement amended Mr.
The payment was made in 2023. 29 Table of Contents In 2022, the Company incurred $0.6 million of unallocated expense related to the termination payment with its Executive Chairman, Jeffrey Siegel. On November 1, 2022, the Company entered into a transition agreement with Jeffrey Siegel, which terminated his employment with the Company, effective March 31, 2023.
Year Ended December 31, 2023 2022 2021 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 62.9 64.2 64.8 Gross margin 37.1 35.8 35.2 Distribution expenses 10.1 10.3 9.4 Selling, general and administrative expenses 22.2 21.3 18.1 Intangible asset impairments — — 1.7 Restructuring expenses 0.1 0.2 — Wallace facility remediation expense — 0.7 0.1 Income from operations 4.7 3.3 5.9 Interest expense (3.2) (2.4) (1.8) Mark to market (loss) gain on interest rate derivatives (0.1) 0.3 0.1 Gain on extinguishments of debt, net 0.1 — — Income before income taxes and equity in (losses) earnings 1.5 1.2 4.2 Income tax provision (0.9) (0.8) (1.9) Equity in (losses) earnings, net of taxes (1.8) (1.2) 0.1 Net (loss) income (1.2) % (0.8) % 2.4 % 31 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS 2023 COMPARED TO 2022 Net Sales Net sales for the year ended December 31, 2023 were $686.7 million, a decrease of $41.0 million, or 5.6%, compared to net sales of $727.7 million in 2022.
Year Ended December 31, 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 61.8 62.9 64.2 Gross margin 38.2 37.1 35.8 Distribution expenses 10.8 10.1 10.3 Selling, general and administrative expenses 23.4 22.2 21.3 Restructuring expenses — 0.1 0.2 Wallace facility remediation expense — — 0.7 Income from operations 4.0 4.7 3.3 Interest expense (3.3) (3.2) (2.4) Mark to market (loss) gain on interest rate derivatives (0.1) (0.1) 0.3 Gain on extinguishments of debt, net — 0.1 — Loss on equity securities (2.0) — — (Loss) income before income taxes and equity in losses (1.4) 1.5 1.2 Income tax provision (0.5) (0.9) (0.8) Equity in losses, net of taxes (0.3) (1.8) (1.2) Net loss (2.2) % (1.2) % (0.8) % 31 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS 2024 COMPARED TO 2023 Net Sales Net sales for the year ended December 31, 2024 were $683.0 million, a decrease of $3.7 million, or 0.5%, compared to net sales of $686.7 million in 2023.
Wallace EPA Matter In connection with the Wallace EPA Matter, the Company’s estimated remediation liability of $5.6 million is expected to be paid within 12 months. On February 7, 2024, the Company provided financial assurance of $5.6 million in the form of a letter of credit.
Wallace EPA Matter As of December 31, 2024, in connection with the Wallace EPA Matter, the Company’s estimated remediation liability amounted to $5.4 million, with $1.0 million is expected to be paid within 12 months. On February 7, 2024, the Company provided financial assurance of $5.6 million in the form of a letter of credit.
BUSINESS SEGMENTS The Company operates in two reportable segments: U.S. and International. The U.S. segment is the Company’s primary domestic business that designs, markets and distributes its products to retailers and distributors, as well as directly to consumers through third parties and its own internet websites. The International segment consists of certain business operations conducted outside the U.S.
BUSINESS SEGMENTS The Company operates in two reportable segments: U.S. and International. The U.S. segment is the Company’s domestic business that designs, markets and distributes its products to retailers and distributors, as well as directly to consumers through third parties and its own internet websites primarily in the U.S.
Future interest obligations associated with debt and interest rate swaps total $65.1 million, with $19.4 million payable within 12 months. The future interest obligations are estimated by assuming the amounts outstanding under the Company’s debt agreements and the interest rates as of December 31, 2023 remain consistent to the end of the debt agreements.
Future interest obligations associated with debt and interest rate swaps total $40.9 million, with $17.1 million payable within 12 months. The future interest obligations are estimated by assuming the amounts outstanding under the Company’s debt agreements and the interest rates as of December 31, 2024 remain consistent to the end of the debt agreements.
The gain on the early retirement of the Term Loan was $1.5 million, net of fees and expenses. • In connection with the Term Loan Amendment, the Company reduced its outstanding principal by a net amount of $48.7 million through a voluntary prepayment of principal (in accordance with the terms of the original Term Loan Agreement), net of the issuance of new proceeds and an extension of a portion of existing Term Loan.
In connection with the Term Loan Amendment, the Company reduced its outstanding principal by a net amount of $48.7 million through a voluntary prepayment of principal (in accordance with the terms of the original Term Loan Agreement), net of the issuance of new proceeds and an extension of a portion of existing Term Loan.
The Company values its indefinite-lived trade names using a relief-from-royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company.
The Company completed the quantitative impairment analysis by comparing the fair value of the indefinite-lived trade name to its carrying value using a relief from royalty approach, which assumes the value of the trade name is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the trade name and instead licensed the trade name from another company.
Indebtedness On August 26, 2022, the Company entered into Amendment No. 2 (the “Amendment”) to the ABL Agreement among the Company, as a Borrower, certain subsidiaries of the Company, as Borrowers and/or Loan Parties, JPMorgan Chase Bank, N.A., as Administrative Agent and a Lender.
Indebtedness On August 26, 2022, the Company entered into Amendment No. 2 (the “Amendment”) to the Company’s credit agreement, dated as of March 2, 2018 (as amended, the “ABL Agreement”) among the Company, as a Borrower, certain subsidiaries of the Company, as Borrowers and/or Loan Parties, JPMorgan Chase Bank, N.A., as Administrative Agent and a Lender.
The increase was a result of higher interest rates on outstanding borrowings in the current period, partially offset by lower average outstanding borrowings. 33 Table of Contents Mark to market (loss) gain on interest rate derivatives Mark to market loss on interest rate derivatives was $(0.5) million for the year ended December 31, 2023, as compared to a mark to market gain on interest rate derivatives of $2.0 million for the year ended December 31, 2022 .
The increase was a result of higher interest rates on outstanding borrowings in the current period, partially offset by lower average outstanding borrowings. Mark to market (loss) gain on interest rate derivatives Mark to market loss on interest rate derivatives was $0.5 million for both the year ended December 31, 2024, and December 31, 2023 .
Dividends Dividends were declared in 2023 and 2022 as follows: Dividend per share Date declared Date of record Payment date $0.0425 March 8, 2022 May 2, 2022 May 16, 2022 $0.0425 June 23, 2022 August 1, 2022 August 15, 2022 $0.0425 August 2, 2022 November 1, 2022 November 15, 2022 $0.0425 November 1, 2022 February 1, 2023 February 15, 2023 $0.0425 March 8, 2023 May 1, 2023 May 15, 2023 $0.0425 June 22, 2023 August 1, 2023 August 15, 2023 $0.0425 August 2, 2023 November 1, 2023 November 15, 2023 $0.0425 November 7, 2023 February 1, 2024 February 15, 2024 On March 8, 2024, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on May 15, 2024 to shareholders of record on May 1, 2024.
Dividends Dividends were declared in 2024 and 2023 as follows: Dividend per share Date declared Date of record Payment date $0.0425 March 8, 2023 May 1, 2023 May 15, 2023 $0.0425 June 22, 2023 August 1, 2023 August 15, 2023 $0.0425 August 2, 2023 November 1, 2023 November 15, 2023 $0.0425 November 7, 2023 February 1, 2024 February 15, 2024 $0.0425 March 8, 2024 May 1, 2024 May 15, 2024 $0.0425 June 20, 2024 August 1, 2024 August 15, 2024 $0.0425 August 6, 2024 November 1, 2024 November 15, 2024 $0.0425 November 5, 2024 January 31, 2025 February 14, 2025 On March 11, 2025, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on May 15, 2025 to shareholders of record on May 1, 2025.
As of December 31, 2023 and 2022, the total availability under the ABL Agreement were as follows (in thousands): December 31, 2023 December 31, 2022 Maximum aggregate principal allowed $ 181,919 $ 189,411 Outstanding borrowings under the ABL Agreement (60,395) (10,424) Standby letters of credit (2,894) (2,765) Total availability under the ABL agreement $ 118,630 $ 176,222 Availability under the ABL Agreement is limited to the lesser of the $200.0 million commitment thereunder and the borrowing base and therefore depends on the valuation of certain current assets comprising the borrowing base.
As of December 31, 2024 and 2023, the total availability under the ABL Agreement were as follows (in thousands): December 31, 2024 December 31, 2023 Maximum aggregate principal allowed $ 176,329 $ 181,919 Outstanding borrowings under the ABL Agreement (42,693) (60,395) Standby letters of credit (8,828) (2,894) Total availability under the ABL agreement $ 124,808 $ 118,630 Availability under the ABL Agreement is limited to the lesser of the $200.0 million commitment thereunder and the borrowing base and therefore depends on the valuation of certain current assets comprising the borrowing base.
The Term Loan has a principal amount of $150.0 million, and matures on August 26, 2027. The Term Loan requires the Company to make quarterly payments of principal each equal to 1.25% of the aggregate principal amount of the Term Loan, commencing on March 31, 2024, with the remaining balance payable on the maturity date.
The Term Loan has a principal amount of $150.0 million, and matures on August 26, 2027. The Term Loan will be repaid in quarterly payments of principal each equal to 1.25% of the aggregate principal amount of the Term Loan, which commenced on March 31, 2024, with the remaining balance payable on the maturity date.
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. Goodwill The Company performed an interim impairment test of the goodwill in the U.S. reporting unit as of September 30, 2023 , by comparing its fair value with its carrying value.
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. Goodwill The Company performed its annual impairment assessment of its U.S. reporting unit as of October 1, 2024 by comparing the fair value of the reporting unit with its carrying value.
Foreign Exchange Contracts The Company is a party from time to time to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases denominated in foreign currencies.
Foreign Exchange Contracts To reduce the impact of changes in foreign currency exchange rates on its results, from time to time the Company is a party to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases.
Further, the Company’s non-GAAP information may be different from the non-GAAP information provided by other companies including other companies within the home retail industry. 40 Table of Contents The following is a reconciliation of net (loss) income as reported to adjusted EBITDA for the years ended December 31, 2023 and 2022 and each fiscal quarter of 2023 and 2022: Three Months Ended Year Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 December 31, 2023 (in thousands) Net (loss) income as reported $ (8,805) $ (6,520) 4,206 $ 2,707 $ (8,412) Undistributed equity losses, net 2,777 5,863 1,047 2,978 12,665 Income tax (benefit) provision (1,348) 1,242 3,015 3,313 6,222 Interest expense 5,336 5,528 5,246 5,618 21,728 Depreciation and amortization 4,870 4,925 4,821 4,955 19,571 Mark to market loss (gain) on interest rate derivatives 234 (197) 98 364 499 Stock compensation expense 861 1,011 898 917 3,687 Contingent consideration fair value adjustments — (50) — (600) (650) (Gain) loss on extinguishments of debt, net — (1,520) — 759 (761) Acquisition related expenses 490 242 186 407 1,325 Restructuring expenses 856 — — — 856 Warehouse redesign expenses (1) 194 157 176 51 578 Adjusted EBITDA (2) $ 5,465 $ 10,681 $ 19,693 $ 21,469 $ 57,308 (1) For the year ended December 31, 2023, the warehouse redesign expenses related to the U.S. segment.
Adjusted EBITDA is defined as net (loss) income, adjusted to exclude loss on equity securities, equity in losses, net of taxes, income tax provision (benefit), interest expense, depreciation and amortization, mark to market loss (gain) on interest rate derivatives, stock compensation expense, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements . 40 Table of Contents Three Months Ended Year Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 December 31, 2023 (in thousands) Net (loss) income as reported $ (8,805) $ (6,520) $ 4,206 $ 2,707 $ (8,412) Equity in losses, net of taxes 2,777 5,863 1,047 2,978 12,665 Income tax (benefit) provision (1,348) 1,242 3,015 3,313 6,222 Interest expense 5,336 5,528 5,246 5,618 21,728 Depreciation and amortization 4,870 4,925 4,821 4,955 19,571 Mark to market loss (gain) on interest rate derivatives 234 (197) 98 364 499 Stock compensation expense 861 1,011 898 917 3,687 Contingent consideration fair value adjustment — (50) — (600) (650) (Gain) loss on extinguishments of debt, net — (1,520) — 759 (761) Acquisition related expenses 490 242 186 407 1,325 Restructuring expenses 856 — — — 856 Warehouse redesign expenses (1) 194 157 176 51 578 Adjusted EBITDA (2) $ 5,465 $ 10,681 $ 19,693 $ 21,469 $ 57,308 (1) For the year ended December 31, 2023, the warehouse redesign expenses related to the U.S. segment.
Net sales for the U.S. segment in 2023 were $633.1 million, a decrease of $36.1 million, or 5.4%, compared to net sales of $669.2 million in 2022. Net sales for the U.S. segment’s Kitchenware product category in 2023 were $386.7 million, a decrease of $16.2 million, or 4.0%, compared to net sales of $402.9 million in 2022.
Net sales for the U.S. segment in 2024 were $627.2 million, a decrease of $5.9 million, or 0.9%, compared to net sales of $633.1 million in 2023. Net sales for the U.S. segment’s Kitchenware product category in 2024 were $384.3 million, a decrease of $2.4 million, or 0.6%, compared to net sales of $386.7 million in 2023.
Equity in (losses) earnings Equity in losses of Vasconia, net of taxes, was $12.7 million for the year ended December 31, 2023, as compared to equity in losses of Vasconia, net of taxes, of $9.5 million for the year ended December 31, 2022.
Equity in losses, net of taxes Equity in losses of Vasconia, net of taxes, was $2.1 million for the year ended December 31, 2024, as compared to $12.7 million for the year ended December 31, 2023.
During the years ended December 31, 2023 and December 31, 2022, equity in losses included non-cash impairment charges of $6.8 million and $6.2 million, respectively, to reduce the carrying value of the Company’s investment in Vasconia to its fair value.
During the year ended December 31, 2023, equity in losses included a non-cash impairment charge of $6.8 million, to reduce the carrying value of the Company’s investment in Vasconia to its fair value.
The interest rate on outstanding borrowings under the ABL Agreement at December 31, 2023 was between 6.47% and 6.72%. In addition, the Company paid a commitment fee of 0.25% on the unused portion of the ABL Agreement during the year ended December 31, 2023.
The interest rate on outstanding borrowings under the ABL Agreement at December 31, 2024 was between 4.29% and 7.88%. The Company paid a commitment fee of 0.25% on the unused portion of the ABL Agreement during the year ended December 31, 2024.
Per the Term Loan, when the Company makes an Excess Cash Flow prepayment, the payment is first applied to satisfy the next eight (8) scheduled future quarterly required payments of the Term Loan in order of maturity and then to the remaining scheduled installments on a pro rata basis. 37 Table of Contents The maximum borrowing amount under the ABL Agreement may be increased to up to $250.0 million if certain conditions are met.
Per the Term Loan, when the Company makes an Excess Cash Flow prepayment, the payment is first applied to satisfy the next eight (8) scheduled future 37 Table of Contents quarterly required payments of the Term Loan in order of maturity and then to the remaining scheduled installments on a pro rata basis.
Covenant Calculations Adjusted EBITDA (a non-GAAP financial measure), which is defined in the Company’s Debt Agreements, is used in the calculation of the Fixed Charge Coverage Ratio, Secured Net Leverage Ratio, Total Leverage Ratio and Total Net Leverage Ratio, which are required to be provided to the Company’s lenders pursuant to its Debt Agreements. 39 Table of Contents Non-GAAP financial measure Adjusted EBITDA is a non-GAAP financial measure within the meaning of Regulation G and Item 10(e) of Regulation S-K, each promulgated by the SEC.
Covenant Calculations Adjusted EBITDA (a non-GAAP financial measure), which is defined in the Company’s Debt Agreements, is used in the calculation of the Fixed Charge Coverage Ratio, Secured Net Leverage Ratio, Total Leverage Ratio and Total Net Leverage Ratio, which are required to be provided to the Company’s lenders pursuant to its Debt Agreements.
Post-retirement benefit The Company assumed retirement benefit obligations, which are paid to certain former executives of a business acquired in 2006. As of December 31, 2023, the estimated discounted obligations under the agreements with the former executives amounted to $5.6 million, with $0.5 million payable within 12 months.
As of December 31, 2024, the estimated minimum royalties payable under the noncancellable term of these agreements amounted to $8.2 million payable within 12 months. Post-retirement benefit The Company assumed retirement benefit obligations, which are paid to certain former executives of a business acquired in 2006.
SG&A expenses for 2023 for the U.S. segment we re $117.4 million, a decrease of $0.8 million, or 0.7% , compared to $118.2 million for 2022. As a percentage of net sales, SG&A expenses were 18.5% for 2023, compared to 17.7% for 2022.
SG&A expenses for 2024 for the U.S. segment we re $123.0 million, an increase of $5.6 million, or 4.8%, compared to $117.4 million for 2023. As a percentage of net sales, SG&A expenses were 19.6% for 2024, compared to 18.5% for 2023.
As of December 31, 2023, the Company assessed the carrying value of goodwill and determined, based on qualitative factors, that no impairment indicators existed for goodwill.
As of December 31, 2024, the Company assessed the carrying value of goodwill and determined, based on qualitative factors, that no impairment indicators existed for goodwill. The carrying value of the goodwill for the U.S reporting unit was $33.2 million as of December 31, 2024.
The Company’s interest rate swaps that were designated as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings expired in March 2023. The Company has no designated interest rate swaps at December 31, 2023.
The Company’s total outstanding notional value of interest rate swaps was $75.0 million at December 31, 2024. 41 Table of Contents The Company’s interest rate swaps that were designated as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings expired in March 2023.
Liquidity as of December 31, 2023 was $133.9 million, consisting of $16.2 million of cash and cash equivalents, $89.4 million of availability under the ABL Agreement, limited by the Term Loan financial covenant, and $28.3 million of available funding under the Receivables Purchase Agreement.
Liquidity as of December 31, 2024 was $111.7 million, consisting of $2.9 million of cash and cash equivalents, $82.8 million of availability under the ABL Agreement, limited by the Term Loan financial covenant, and $26.0 million of available funding under the Receivables Purchase Agreement.
The net sales decrease in the U.S. segment’s Kitchenware product category was driven by lower sales for kitchen tools and gadgets, cutlery and board, and bakeware products.
The net sales decrease in the U.S. segment’s Kitchenware product category was driven by lower sales for kitchen tools and barware products. The decrease was partially offset by higher sales for cutlery and board, and bakeware products driven by new warehouse programs in 2024 and the launch of new product lines.
One or more tranches of additional term loans (the “Incremental Term Facilities”) may be added under the Term Loan if certain conditions are met.
The maximum borrowing amount under the ABL Agreement may be increased to up to $250.0 million if certain conditions are met. One or more tranches of additional term loans (the “Incremental Term Facilities”) may be added under the Term Loan if certain conditions are met.
The change from 2023 compared to 2022 was attributable to higher repayments of the Term Loan in the 2023 period compared to the 2022 period and financing costs incurred in connection with the Amendment No. 2 to the Term Loan.
The change from 2024 compared to 2023 was attributable to higher repayments of the Term Loan in the 2023 period and financing costs incurred in connection with the Amendment No. 2 to the Term Loan. This was partially offset by higher proceeds from the revolving credit facility in the 2023 and no stock repurchases activities in the 2024 period.
In connection with the Term Loan Amendment that Company incurred fees of $9.1 million, which will be amortized over the life of the debt using the effective interest method.
In connection with the Term Loan Amendment that Company incurred fees of $9.1 million, which will be amortized over the life of the debt using the effective interest method. The Company recognized a loss of $0.7 million of unamortized debt issuance costs on the partial extinguishment for the portion of the Term Loan that was repaid.
The Company recognized a loss of of $0.7 million of unamortized debt issuance costs on the partial extinguishment for the portion of the Term Loan that was repaid. 38 Table of Contents As of December 31, 2023, the future principal payments of the Term Loan are as follows (in thousands): 2024 $ 7,500 2025 7,500 2026 7,500 2027 127,500 Total $ 150,000 The Company’s payment obligations under its Debt Agreements are unconditionally guaranteed by its existing and future U.S. subsidiaries, with certain minor exceptions.
As of December 31, 2024, the future principal payments of the Term Loan are as follows (in thousands): 2025 $ 7,500 2026 7,500 2027 127,500 Total $ 142,500 The Company’s payment obligations under its Debt Agreements are unconditionally guaranteed by its existing and future U.S. subsidiaries with certain minor exceptions.
The increase in the expense as a percentage of sales was primarily attributed to lower shipment volume resulting in an unfavorable impact on fixed expenses. Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses for 2023 w ere $152.6 million, a decrease of $1.9 million, or 1.2%, as compared to $154.5 million for 2022.
The decrease in the expense as a percentage of sales was primarily attributed to favorable freight rates, partially offset by lower shipment volume in U.K. resulting in an unfavorable impact of fixed warehouse expenses. 32 Table of Contents Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses for 2024 w ere $159.8 million, an increase of $7.2 million, or 4.7%, as compared to $152.6 million for 2023.
Distribution expenses as a percentage of net sales for the U.S. segment were approximately 8.8% in 2023 and 9.1% in 2022. Distribution expenses in 2023 and 2022 include $0.6 million and $0.1 million, respectively, for redesign costs related to the Company’s U.S. warehouses.
Distribution expenses in 2024 and 2023 included $1.0 million and $0.6 million, respectively, for redesign costs related to the Company’s U.S. warehouses. As a percentage of sales shipped from the Company’s warehouses, excluding warehouse redesign expenses, distribution expenses were 9.7% and 9.4% f or 2024 and 2023.
However, notwithstanding the Company’s efforts to monitor its customers’ financial condition, the Company could be materially affected by future changes in these conditions.
Based upon its evaluation of changes in customers’ creditworthiness, the Company may modify credit limits and/or terms of sale. However, notwithstanding the Company’s efforts to monitor its customers’ financial condition, the Company could be materially adversely affected by future changes in these conditions.
Gross margin Gross margin for 2023 was $254.6 million, or 37.1%, compared to $260.3 million, or 35.8%, for the corresponding period in 2022. Gross margin for the U.S. segment was $236.5 million, or 37.4%, for 2023, compared to $241.1 million, or 36.0%, for 2022. The decrease in gross margin dollars was due to lower sales.
Gross margin Gross margin for 2024 was $260.7 million, or 38.2%, compared to $254.6 million, or 37.1%, for the corresponding period in 2023. Gross margin for the U.S. segment was $240.3 million, or 38.3%, for 2024, compared to $236.5 million, or 37.4%, for 2023.
Siegel’s employment agreement which was to expire on December 31, 2022. The employment agreement provided for a one-time payment, which was paid on April 7, 2023. The one-time payment of $1.4 million, was recognized over the remaining employment period with $0.6 million recognized in the fourth quarter of 2023 and the remaining $0.8 million recognized in 2023.
The one-time payment of $1.4 million, was recognized over the remaining employment period with $0.6 million recognized in the fourth quarter of 2023 and the remaining $0.8 million recognized in 2023.
The Company believes that the following discussion addresses its most critical accounting policies, which are those that are most important to the portrayal of the Company’s consolidated financial condition and results of operations and require management’s most difficult, subjective and complex judgments. 34 Table of Contents 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.
The Company believes that the following discussion addresses its most critical accounting policies, which are those that are most important to the portrayal of the Company’s consolidated financial condition and results of operations and require management’s most difficult, subjective and complex judgments.
Net sales for the International segment in 2023 were $53.6 million, a decrease of $4.9 million, or 8.4%, compared to net sales of $58.5 million for 2022.
Net sales for the International segment in 2024 were $55.8 million, an increase of $2.2 million, or 4.1%, compared to net sales of $53.6 million for 2023.
Cash used in financing activities Net cash used in financing activities was $61.1 million in 2023 compared to $7.6 million in 2022.
Cash used in investing activities Net cash used in investing activities was $2.2 million in 2024, compared to $2.8 million in 2023. Cash used in financing activities Net cash used in financing activities was $29.5 million in 2024 compared to $61.1 million in 2023.
At December 31, 2023, borrowings under the Company’s ABL Agreement were $60.4 million and $150.0 million was outstanding under the Term Loan. At December 31, 2022, borrowings under the Company’s ABL Agreement were $10.4 million and $245.9 million was outstanding under the Term Loan.
The current ratio has remained relatively consistent. At December 31, 2024, borrowings under the Company’s ABL Agreement were $42.7 million and $142.5 million was outstanding under the Term Loan. At December 31, 2023, borrowings under the Company’s ABL Agreement were $60.4 million and $150.0 million was outstanding under the Term Loan.
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 not considered to be impaired.
If, after assessing qualitative factors, the Company determines that it is more likely than not that the fair value of a reporting unit exceed its carrying amount, then no further testing is performed for that reporting unit.
For the three months ended December 31, 2023 inventory turnover was 2.5 times, or 145 days, as compared to 2.1 times, or 170 days, for the three months ended December 31, 2022. Inventory turns have improved due to lower inventory levels at December 31, 2023 compared to the prior year.
For the three months ended December 31, 2024 inventory turnover was 2.4 times, or 150 days, as compared to 2.5 times, or 145 days, for the three months ended December 31, 2023. Inventory turns have remained relatively consistent.
Adjusted EBITDA, as discussed above, is also one of the measures used to calculate financial covenants required to be provided to the Company’s lenders pursuant to its Debt Agreements. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, the Company’s financial performance measures prepared in accordance with GAAP.
Management also uses this non-GAAP information as an indicator of business performance. Adjusted EBITDA, as discussed above, is also one of the measures used to calculate financial covenants required to be provided to the Company’s lenders pursuant to its Debt Agreements.
The current and non-current portions of the Company’s Term Loan facility included in the consolidated balance sheets are presented as follows (in thousands): December 31, 2023 December 31, 2022 Current portion of Term Loan facility: Term Loan facility payment $ 7,500 $ — Estimated unamortized debt issuance costs (2,758) — Total Current portion of Term Loan facility $ 4,742 $ — Non-current portion of Term Loan facility: Term Loan facility, net of current portion $ 142,500 $ 245,911 Estimated unamortized debt issuance costs (6,666) (3,054) Total Non-current portion of Term Loan facility $ 135,834 $ 242,857 As of December 31, 2023, there is no Excess Cash Flow Payment due for 2024.
The current and non-current portions of the Company’s Term Loan included in the consolidated balance sheets were as follows (in thousands): December 31, 2024 December 31, 2023 Current portion of Term Loan: Term Loan payment $ 7,500 $ 7,500 Estimated unamortized debt issuance costs (2,609) (2,758) Total Current portion of Term Loan $ 4,891 $ 4,742 Non-current portion of Term Loan: Term Loan, net of current portion $ 135,000 $ 142,500 Estimated unamortized debt issuance costs (4,051) (6,666) Total Non-current portion of Term Loan $ 130,949 $ 135,834 The estimated 2024 excess cash flow payment of $1.3 million will be applied to the 2025 scheduled quarterly payments of the Term Loan, per the terms of the debt agreement.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures: which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements.
(“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures: which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. The Company adopted this guidance on a retrospective basis and the adoption did not have a material impact on the Company’s consolidated financial statements.
The Company’s Term Loan facility was reduced to $150.0 million at December 31, 2023 from $245.9 million at December 31, 2022 through the following transactions: • On June 8, 2023, the Company completed the repurchase of $47.2 million in principal amount of the Term Loan, for $95 per $100 of principal.
The Company was in compliance with the covenants of the Debt Agreements at December 31, 2024. On June 8, 2023, the Company completed the repurchase of $47.2 million in principal amount of the Term Loan, for $95 per $100 of principal.
At December 31, 2023 and 2022, the Company had cash and cash equivalents of $16.2 million and $23.6 million, respectively, and working capital of $224.4 million at December 31, 2023, compared to $270.4 million at December 31, 2022.
At December 31, 2024 and 2023, the Company had cash and cash equivalents of $2.9 million and $16.2 million, respectively, and working capital of $221.8 million at December 31, 2024, compared to $224.4 million at December 31, 2023. The current ratio (current assets to current liabilities) was 2.5 to 1.0 at December 31, 2024, and December 31, 2023.
These non-designated interest rate swaps were entered into in June 2019 and serve as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings and expire in February 2025.
In March 2024 and October 2024, the Company entered into new interest rate swap agreements, each with an aggregate notion value of $25.0 million and expire in August 2027. These non-designated interest rate swaps serve as cash flow hedges of the Company’s exposure to the variability of the payment of interest on a portion of its Term Loan borrowings.
The Company believes that availability under the revolving credit facility under its ABL Agreement, cash on hand and cash flows from operations are sufficient to fund the Company’s operations for the next 12 months. However, if circumstances were to adversely change, the Company may seek alternative sources of liquidity including debt and/or equity financing.
This reduced the availability under the revolving credit facility by the same amount. The Company believes that availability under the revolving credit facility under its ABL Agreement, cash on hand and cash flows from operations are sufficient to fund the Company’s operations for the next 12 months.
Cash provided by operating activities Net cash provided by operating activities was $56.4 million in 2023, compared to $24.3 million in 2022. The increase from 2023 compared to 2022 was attributable timing of payments for accounts payable and accrued expenses, partially offset by timing of collections related to the Company’s accounts receivable and a reduction in inventory levels.
The decrease from 2024 compared to 2023 was attributable to increased use of cash related to inventory purchases, and timing of payments for accounts payable and accrued expenses, partially offset by timing of collections related to the Company’s accounts receivable.
Siegel’s employment agreement which was to expire on December 31, 2022. The employment agreement provided for a one-time payment, which was paid on April 7, 2023. The one-time payment of $1.4 million, was recognized over the remaining employment period with $0.6 million recognized in the fourth quarter of 2022 and the remaining $0.8 million recognized in 2023.
The transition agreement amended Mr. Siegel’s employment agreement which was to expire on December 31, 2022. The employment agreement provided for a one-time payment, which was paid on April 7, 2023.
In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2023 average exchange rates to 2022 local currency amounts, net sales decreased approximately 8.5%. The decrease was due to generally weak demand in European channels caused by macroeconomic factors.
In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2024 average exchange rates to 2023 local currency amounts, net sales increased approximately 1.6%. The increase was driven by higher sales with global trading business in Asia.
Net sales for the U.S. segment’s Home Solutions products category in 2023 were $108.1 million, a decrease of $9.4 million, or 8.0%, compared to net sales of $117.5 million in 2022. The decrease was due to lower hydration product sales primarily through the corporate sales channel.
Net sales for the U.S. segment’s Home Solutions products category in 2024 were $110.1 million, an increase of $2.0 million, or 1.9%, compared to net sales of $108.1 million in 2023.
The mark to market amount represents the change in the fair value on the Company’s interest rate derivatives that have not been designated as hedging instruments. The decrease was attributable to the change in the fair value at the end of December 31, 2022 due to increases in interest rates.
The mark to market amount represents the change in the fair value on the Company’s interest rate derivatives that have not been designated as hedging instruments. These derivatives were entered into for purposes of locking-in a fixed interest rate on the Company's variable interest rate debt.
However, there can be no assurance that any such alternative sources would be available or sufficient. The Company closely monitors the creditworthiness of its customers. Based upon its evaluation of changes in customers’ creditworthiness, the Company may modify credit limits and/or terms of sale.
However, if circumstances were to adversely change, the Company may seek alternative sources of liquidity including debt and/or equity financing. However, there can be no assurance that any such alternative sources would be available or sufficient. The Company closely monitors the creditworthiness of its customers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−3 removed3 unchanged
Biggest changeThe Company does not hedge the translation of foreign currency profits into USD, as the Company regards this as an accounting exposure rather than an economic exposure. The aggregate gross notional values of foreign exchange contracts at December 31, 2023 and 2022 was $9.8 million and $6.3 million, respectively.
Biggest changeThe Company purchases foreign currency forward contracts with terms less than 18 months. The aggregate gross notional values of foreign exchange contracts at December 31, 2024 and 2023 was $8.0 million and $9.8 million, respectively. 43 Table of Contents The Company’s ABL Agreement and Term Loan bear interest at variable rates.
For the year ended December 31, 2023, approximately 8% of the Company’s net sales revenue was in foreign currencies, compared to 8% for the year ended December 31, 2022. These sales were primarily denominated in U.K. pounds, Euros and Canadian dollars. The Company makes most of its inventory purchases from Asia and uses the U.S. dollar for such purchases.
For the year ended December 31, 2024, approximately 7% of the Company’s net sales revenue was in foreign currencies, compared to 8% for the year ended December 31, 2023. These sales were primarily denominated in U.K. pounds, Euros and Canadian dollars. The Company makes most of its inventory purchases from Asia and uses the U.S. dollar for such purchases.
In the Company’s consolidated statements of operations, foreign exchange gains and losses are recognized in SG&A expense. A hypothetical 10% change in exchange rates, with the U.S. dollar as the functional and reporting currency, would result in an increase of approximately $1.2 million in SG&A expenses.
In the Company’s consolidated statements of operations, foreign exchange gains and losses are recognized in SG&A expense. A hypothetical 10% change in exchange rates, with the U.S. dollar as the functional and reporting currency, would result in an increase of approximately $0.8 million in SG&A expenses.
The Company has foreign operations through its acquisitions, investments and strategic alliances in the U.K., Mexico, Canada, Hong Kong and China; therefore, the Company is subject to increases and decreases in its investments resulting from the impact of fluctuations in foreign currency exchange rates.
The Company has foreign operations through its acquisitions, investments and strategic alliances in the U.K., Netherlands, Mexico, Canada, Australia, New Zealand, Hong Kong and China; therefore, the Company is subject to increases and decreases in its investments resulting from the impact of fluctuations in foreign currency exchange rates.
The Company’s ABL Agreement and Term Loan bear interest at variable rates. The Credit Agreement provides for interest rates linked to one of the SOFR, the Prime Rate or the Federal Funds Rate; therefore, the Company is subject to increases and decreases in interest expense resulting from fluctuations in interest rates.
The Credit Agreement provides for interest rates linked to one of the SOFR, the Prime Rate or the Federal Funds Rate; therefore, the Company is subject to increases and decreases in interest expense resulting from fluctuations in interest rates.
The Company entered into interest rate swap agreements in June 2019, to manage interest rate exposure in connection with its variable interest rate borrowings with an aggregate notional value of $25.0 million at December 31, 2023.
The Company entered into interest rate swap agreements in June 2019, March 2024, and October 2024, to manage interest rate exposure in connection with its variable interest rate borrowings with an aggregate notional value of $75.0 million at December 31, 2024.
As of December 31, 2023, approximately $185.4 million of the Company’s debt carries a variable rate of interest, as compared to $206.3 million at December 31, 2022. The remainder of the debt at December 31, 2023 (approximately $25.0 million) carries a fixed rate of interest through the use of interest rate swaps.
As of December 31, 2024, approximately $110.2 million of the Company’s debt carries a variable rate of interest, as compared to $185.4 million at December 31, 2023. The remainder of the debt at December 31, 2024 (approximately $75.0 million) carries a fixed rate of interest through the use of interest rate swaps.
Financial Statements and Supplementary Data The Company’s consolidated financial statements and accompanying notes listed in Part IV, Item 15 commencing on page F-1 are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
The Company does not enter into derivative financial instruments for trading purposes. Item 8. Financial Statements and Supplementary Data The Company’s consolidated financial statements and accompanying notes listed in Part IV, Item 15 commencing on page F-1 are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
A hypothetical and instantaneous 100 basis point increase 44 Table of Contents in the Company’s variable interest rates would increase interest expense by approximately $2.3 million over a twelve month period. The sensitivity analysis above assumes interest rate changes are instantaneous and parallel shifts in the yield curve occur.
A hypothetical and instantaneous 100 basis point increase in the Company’s variable interest rates would increase interest expense by approximately $2.2 million over a twelve month period. The sensitivity analysis above assumes interest rate changes are instantaneous and parallel shifts in the yield curve occur. Interest rate swaps expose the Company to counterparty credit risk for nonperformance.
The Company is a party from time to time to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases denominated in foreign currencies.
To reduce the impact of changes in foreign currency exchange rates on its results, from time to time the Company is a party to certain foreign exchange contracts, primarily to offset the earnings impact related to fluctuations in foreign currency exchange rates associated with inventory purchases. The Company designates these contracts for accounting purposes as cash flow hedges.
Although the Company’s credit risk is the replacement cost at the estimated fair value of these instruments, the Company believes that the risk of incurring credit risk losses as a result of counterparty nonperformance is remote. The Company does not enter into derivative financial instruments for trading purposes. Item 8.
The Company manages its exposure to counterparty credit risk by dealing with counterparties who are international financial institutions with investment grade credit ratings. Although the Company’s credit risk is the replacement cost at the estimated fair value of these instruments, the Company believes that the risk of incurring credit risk losses as a result of counterparty nonperformance is remote.
Removed
Fluctuations in the value of certain foreign currencies as compared to the USD may positively or negatively affect the Company’s revenues, gross margins, operating expenses, and retained earnings, all of which are expressed in USD.
Removed
Where the Company deems it prudent, the Company engages in hedging programs using foreign currency forward contracts aimed at limiting the impact of foreign currency exchange rate fluctuations on earnings. The Company purchases foreign currency forward contracts with terms less than 18 months to protect against currency exchange risks associated with the payment of merchandise purchases to foreign suppliers.
Removed
Interest rate swaps expose the Company to counterparty credit risk for nonperformance. The Company manages its exposure to counterparty credit risk by dealing with counterparties who are international financial institutions with investment grade credit ratings.

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