Lifetime Brands Inc.
03/12/2026 | Press release | Distributed by Public on 03/12/2026 15:25
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements for the Company and Notes thereto set forth in Item 15. This discussion contains forward-looking statements relating to future events and the future performance of the Company based on the Company's current expectations, assumptions, estimates and projections about it and the Company's industry. These forward-looking statements involve risks and uncertainties. The Company's actual results and timing of various events could differ materially from those anticipated in such forward-looking statements as a result of a variety of factors, as more fully described in this section and elsewhere in this Annual Report including those discussed under "Disclosures Regarding Forward-Looking Statements," "Risk Factors Summary" under Item 1A "Risk Factors" and under Item 7A "Quantitative and Qualitative Disclosures Regarding Market Risk." The Company undertakes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, other than as required by law.
The discussion focuses on the results of the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to December 31, 2023, please 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, 2024.
ABOUT THE COMPANY
The Company designs, sources and sells branded kitchenware, tableware and other home solution products used in the home. 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 markets several product lines within each of its product categories and under most of the Company's brands, primarily targeting moderate price points through virtually every major level of trade. The Company believes it possesses certain competitive advantages based on its brands, its emphasis on innovation and new product development, and its sourcing capabilities. The Company owns or licenses a number of leading brands in its industry, including Farberware®, KitchenAid®, Mikasa®, Taylor®, Pfaltzgraff®, Dolly Parton®, S'well®, Sabatier®, Kamenstein®, and Fred® & Friends. Historically, the Company's sales growth has come from expanding product offerings within its product categories, by developing existing brands, acquiring new brands (including complementary brands in markets outside the United States), and establishing new product categories. Key factors in the Company's growth strategy have been the selective use and management of the Company's brands and the Company's ability to provide a stream of new products and designs. A significant element of this strategy is the Company's in-house design and development teams that create new products, packaging and merchandising concepts.
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. The International segment is the Company's international business that sells and distributes products to consumers primarily in the U.K., the European Union and the Asia Pacific region. The Company has segmented its operations to reflect the manner in which management reviews and evaluates its results of operations.
SEASONALITY
The Company's business and working capital needs are seasonal, with a majority of sales occurring in the third and fourth quarters. In 2025, 2024 and 2023, net sales for the third and fourth quarters accounted for 58%, 58% and 57% of total annual net sales, respectively. In anticipation of the pre-holiday shipping season, inventory levels typically increase primarily in the June through October time period.
Consistent with the seasonality of the Company's net sales and inventory levels, the Company also experiences seasonality in its inventory turnover and turnover days from one quarter to the next.
RESTRUCTURING
During 2025, the Company's International segment incurred $0.3 million of restructuring expense related to severance associated with the reorganization of the International segment's workforce. The reorganization was undertaken in connection with Project Concord and primarily affected the structure of the International segment's merchandising and sales workforce.
RECENT DEVELOPMENTS
Tariff and Supply Chain Considerations
The Company sources almost all of its product from third-party manufacturers outside the U.S., primarily in China. This geographic concentration in suppliers exposes the Company to risks associated with doing business globally, including risks relating to changes in U.S. tariff and trade policies. New or increased tariffs, quotas, embargoes, or other trade barriers could adversely impact our supply chain and cost structure. To mitigate the impact of the tariffs imposed by the U.S. administration during 2025, the Company has negotiated price increases to its U.S. customers, negotiated lower product costs with its foreign suppliers and pursues diversification of its foreign sourced products to countries that are expected to be subject to lower tariffs. The Company's tariff mitigation strategy is intended to maintain the Company's gross margin dollars and therefore, may result in a decline in gross margin percentage. Net sales for fiscal 2025 were negatively impacted by softening consumer discretionary demand, as tariff-related uncertainty and price increases reduced retail ordering volume. For the full fiscal year 2025, U.S. gross margin percentage declined 100 basis points compared to 2024. This decline was at least in part a result of the combined impact of tariffs offset by our mitigation strategy. We expect continued margin pressure through the first half of 2026 as higher-cost inventory is sold through, reflecting the full impact of these tariffs.
On February 20, 2026, the U.S. Supreme Court held that the U.S. administration's imposition of tariffs unlawful pursuant to the International Emergency Economic Powers Act ("IEEPA") was unlawful, striking down the 10% global baseline tariff, as well as the higher tariffs imposed on certain U.S. trading partners. The U.S. Supreme Court's ruling did not affect all of the recently imposed tariffs, including those imposed following trade remedy investigations by the Department of Commerce or the U.S. Trade Representative. Nor does it prohibit the imposition of future tariffs through alternative trade authorities available to the U.S. administration. On February 20, 2026, shortly after the announced U.S. Supreme Court decision, the U.S. administration announced that it would be imposing a new 10% global tariff for a period of 150 days pursuant to a balance-of-payments provision in Section 122 of the Trade Act of 1974, to become effective February 24, 2026. The U.S. administration further announced that it would begin additional trade remedy investigations into unidentified trading partners pursuant to Section 301 of the Trade Act of 1974 and with respect to certain unidentified product sectors pursuant to Section 232 of the Trade Expansion Act of 1962. The U.S. Government has stated publicly that companies will need to litigate to obtain refunds, which could take years and neither the U.S. Customs and Border Protection ("CBP") nor the Court of International Trade has to date issued any guidance on refunds, making it challenging to predict if, and when, any refunds will, in fact, be obtained and whether refunds may be paid in cash or credits against future duties or tariffs.
We cannot predict what additional changes to trade policy will be made by the U.S. administration or Congress, including whether existing tariff policies will be maintained or modified, what products may be subject to such policies, or whether the entry into new bilateral or multilateral trade agreements will occur, nor can we predict the effects that any such changes would have on our business, capital expenditures, and results of operations. We are actively monitoring the rapidly evolving tariff and global trade policies that become effective, as well as potential retaliatory actions by other countries.
If tariffs rates were to increase further and the Company is unable to mitigate the impact of the increase in cost, it would result in lower gross margin from the sale of its products. The broader macroeconomic impacts related to the changes in tariff policies including potential mitigation efforts by retailers may negatively impact consumer spending and buying patterns of the Company's products. This could materially adversely affect the Company's results of operations and financial condition.
Hagerstown Facility
In January 2025, the Company announced the relocation of the Company's East Coast distribution operations currently located in Robbinsville, NJ (the "Robbinsville Facility") to Hagerstown, Maryland (the "Hagerstown Facility"). In connection with the relocation, the Company expects to incur exit costs of approximately $7.0 million for employee severance, certain employee relocation costs, and remaining lease costs for the Robbinsville Facility, which costs are expected to be incurred in 2026.
The Hagerstown Facility will require capital expenditures for equipment and certain leasehold improvements of approximately $9.3 million, of which $7.0 million remains to be purchased in 2026. Start-up costs are estimated to be approximately $7.0 million, which includes recruitment, relocation of inventory, set up costs and lease expenses prior to the Hagerstown Facility being fully operational. These one-time costs are expected to be incurred in 2026. The Company expects that the Hagerstown Facility will be fully operational by the third quarter of 2026. Additionally, in connection with the relocation to the Hagerstown Facility, the Company will receive tax abatement and incentives over the term of the Lease from the State of Maryland and Washington County, Maryland totaling approximately $13.1 million. These incentives include real property tax abatement, employee state withholding tax credit, conditional grants and income tax credits.
Project Concord
In January 2025, the Company launched Project Concord, management's comprehensive plan to propel growth and streamline the cost structure of its International operations. The Company expects this plan to improve future results of its International segment through sales growth and the identified costs efficiencies. During 2025, the Company announced a reorganization of its international
workforce in connection with Project Concord. The reorganization primarily affected the structure of the International segment's merchandising and sales workforce. The restructuring expenses related to severance associated with the reorganization of $0.3 million was recorded in 2025. The Company expects to record approximately $0.7 million, of restructuring charges in connection with the Project Concord, for severance and related costs in 2026.
EFFECT OF ADOPTION OF ACCOUNTING PRINCIPLES
Adopted accounting pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated No. ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. The Company adopted this ASU on a retrospective basis effective January 1, 2025. Refer to NOTE 11 - INCOME TAXES for the inclusion of new disclosures required.
New accounting pronouncements
Updates not listed below were assessed and either determined to not be applicable or are expected to have a minimal effect on the Company's financial position, results of operations, and disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance requires additional disclosure in the notes to the financial statements for specified information about certain costs and expenses. The new guidance is effective for public business entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. Management is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2025 COMPARED TO YEAR ENDED DECEMBER 31, 2024.
The following table sets forth statement of operations data of the Company as a percentage of net sales for the periods indicated below.
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net sales | 100.0 | % | 100.0 | % | |||||||
| Cost of sales | 62.9 | 61.8 | |||||||||
| Gross margin | 37.1 | 38.2 | |||||||||
| Distribution expenses | 11.4 | 10.8 | |||||||||
| Selling, general and administrative expenses | 22.0 | 23.4 | |||||||||
| Goodwill impairment | 5.1 | - | |||||||||
| Restructuring expenses | 0.1 | - | |||||||||
|
(Loss) income from operations
|
(1.5) | 4.0 | |||||||||
| Interest expense | (3.1) | (3.3) | |||||||||
|
Mark to market loss on interest rate derivatives
|
(0.1) | (0.1) | |||||||||
|
Gain on extinguishments of debt, net
|
- | - | |||||||||
| Loss on equity securities | - | (2.0) | |||||||||
|
(Loss) income before income taxes and equity in losses
|
(4.7) | (1.4) | |||||||||
|
Income tax benefit (provision)
|
0.5 | (0.5) | |||||||||
|
Equity in losses, net of taxes
|
0.0 | (0.3) | |||||||||
|
Net loss
|
(4.2) | % | (2.2) | % | |||||||
MANAGEMENT'S DISCUSSION AND ANALYSIS
2025 COMPARED TO 2024
Net Sales
Net sales for the year ended December 31, 2025 were $647.9 million, a decrease of $35.1 million, or 5.1%, compared to net sales of $683.0 million in 2024. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2025 average rates to 2024 local currency amounts, net sales decreased $36.9 million, or 5.4%, as compared to consolidated net sales in the corresponding period in 2024.
Net sales for the U.S. segment in 2025 were $591.2 million, a decrease of $36.0 million, or 5.7%, compared to net sales of $627.2 million in 2024. For the year ended December 31, 2025, net sales were unfavorably impacted by lower sales volume as price increases softened consumer demand, partially offset by higher selling prices, reflecting the price increases for the Company's U.S. customers that became effective during the third quarter of 2025.
Net sales for the U.S. segment's Kitchenware product category in 2025 were $374.9 million, a decrease of $9.4 million, or 2.4%, compared to net sales of $384.3 million in 2024. The net sales decrease in the U.S. segment's Kitchenware product category was driven by lower sales for cutlery and board, bakeware products, barware products and kitchen tools. The decrease was partially offset by higher sales for kitchen measurement products driven by a new warehouse program in 2025.
Net sales for the U.S. segment's Tableware product category in 2025 were $122.2 million, a decrease of $10.6 million, or 8.0%, compared to net sales of $132.8 million for 2024. The decrease was attributable primarily to lower warehouse club programs in 2025 for dinnerware and flatware programs not repeated. This decline was partially offset by higher sales for dinnerware in the dollar channel.
Net sales for the U.S. segment's Home Solutions products category in 2025 were $94.1 million, a decrease of $16.0 million, or 14.5%, compared to net sales of $110.1 million in 2024. The decrease was attributable primarily to lower sales of hydration products and bath measurement products. The decrease was partially offset by higher sales in the back-to-school lunch box category.
Net sales for the International segment in 2025 were $56.7 million, an increase of $0.9 million, or 1.6%, compared to net sales of $55.8 million for 2024. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2025 average exchange rates to 2024 local currency amounts, net sales decreased approximately 1.7%. The increase in net sales was driven by favorable foreign currency translation effects.The decrease in constant currency was driven by lower sales in the U.K., partially offset by higher sales in the Asia Pacific region.
Gross margin
Gross margin for 2025 was $240.7 million, or 37.1%, compared to $260.7 million, or 38.2%, for the corresponding period in 2024.
Gross margin for the U.S. segment was $220.8 million, or 37.3%, for 2025, compared to $240.3 million, or 38.3%, for 2024. The decrease in gross margin percentage was primarily attributable to higher tariffs and product costs, which more than offset the benefit of higher selling prices. The decrease in gross margin dollars was driven by lower sales volume.
Gross margin for the International segment was $19.9 million, or 35.1%, for 2025, compared to $20.4 million, or 36.6%, for 2024. The decrease in gross margin percentage was primarily due to a higher mix of sales incentives and customer allowances during the period.
Distribution expenses
Distribution expenses were $74.1 million for the 2025 period as compared to $73.8 million for the 2024 period. Distribution expenses as a percentage of net sales were 11.4% and 10.8% in 2025 and 2024.
Distribution expenses as a percentage of net sales for the U.S. segment were approximately 10.0% in 2025 and 9.6% in 2024. Distribution expenses in 2025 and 2024included $0.3 million and $1.0 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 9.6% and 9.7% for 2025 and 2024.The decrease in distribution expenses as a percentage of sales was primarily attributable to lower depreciation expense due to changes in asset retirement obligation estimates in the prior year, improved labor management efficiencies and decreased employee expenses, net of higher software costs, due to the launch of a new warehouse management system at the Company's West Coast distribution center in September 2024.
Distribution expenses as a percentage of net sales for the International segment were approximately 26.3% in 2025 and 24.7% in 2024, respectively. As a percentage of sales shipped from the Company's international warehouses, distribution expenses were23.1% and 22.1% for 2025 and 2024, respectively. The increase in distribution expenses as a percentage of sales was primarily attributable to higher warehouse expenses related to the expanded distribution of the Company's products within the Asia Pacific region, partially offset by a decrease in freight-out expenses due to customer mix.
Selling, general and administrative expenses
Selling, general and administrative ("SG&A") expenses for 2025 were $142.4 million, a decrease of $17.4 million, or 10.9%, as compared to $159.8 million for 2024.
SG&A expenses for 2025 for the U.S. segment were $117.5 million, a decrease of $5.5 million, or 4.5%, compared to $123.0 million for2024. As a percentage of net sales, SG&A expenses were 19.9% for 2025, compared to 19.6% for 2024. The decrease in the expenses was attributable to lower employee expenses, including incentive compensation, partially offset by an increase in amortization expense related to an indefinite trade name, which was reclassified to a definite lived trade name in the fourth quarter 2024. The increase in selling, general and administrative expenses as a percentage of net sales, was attributable to the impact of fixed costs on lower net sales.
SG&A expenses for 2025 for the International segment were$13.9 million, a decrease of $3.3 million, or 19.2%, compared to $17.2 million for 2024. As a percentage of net sales, SG&A expenses were 24.5% for 2025, compared to 30.8% for 2024.The decrease in the expenses was primarily attributable to foreign currency exchange gains, lower employee expenses, decreases in advertising expenses and commissions, and the prior year expense included penalties related to tax filings.
Unallocated corporate expenses for 2025 were $11.0 million, compared to $19.6 million for 2024. The decrease in expenses was driven by the recognition of a net legal settlement gain of $6.4 million in the current period, lower incentive compensation, partially offset by higher professional fees and legal expenses.
Goodwill impairment
During the second quarter of 2025, the Company's qualitative assessment of goodwill indicated triggering events had occurred in its U.S. reporting unit. The Company performed an interim impairment test of the goodwill in the U.S. reporting unit as of June 30, 2025, that resulted in a $33.2 million non-cash goodwill impairment charge.
Restructuring expenses
During 2025, the Company's International segment incurred $0.3 million of restructuring expense related to severance associated with the reorganization of the International segment's workforce. The reorganization was undertaken in connection with Project Concord and primarily affected the structure of the International segment's merchandising and sales workforce.
Interest expense
Interest expense for 2025 was $20.0 million,compared to $22.2 millionfor 2024. The decrease in expense was a result of lower average outstanding borrowings in the current period, and lower interest rates on outstanding borrowings.
Mark to market losson interest rate derivatives
Mark to market losson interest rate derivatives was $0.8 million and $0.5 million, respectively, for the year ended December 31, 2025, and 2024.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 for accounting purposes. These derivatives were entered into for purposes of locking-in a fixed interest rate on the Company's variable interestrate debt. As of December 31, 2025, the intent of the Company is to hold these derivative contracts until their maturity.
Loss on equity securities
Loss on equity securities was $14.2 million for the year ended December 31, 2024. In the second quarter of 2024, the Company lost significant influence over its investment in Vasconia and discontinued the equity method of accounting. This change resulted in the reclassification of previously recognized accumulated other comprehensive losses to the investment balance and subsequently resulted in a non-cash loss of $14.2 million, to reduce the investment to its fair value. NOTE 5 - EQUITY INVESTMENTS for additional information.
Income tax benefit (provision)
The income tax benefit was $3.3 million in 2025 and the income tax provision was $3.3 million in 2024. The Company's effective tax rate for 2025 was 10.9%, compared to its effective tax rate of (34.2)% for 2024. The negative rate for 2024 reflects tax expense on pretax financial reporting loss. The effective tax rate in 2025 differs from the federal statutory rate primarily due to UK foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance, and the provision of valuation allowances against current and cumulative losses in Asia, Australia, and New Zealand. The 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.
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.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of Operationsdiscusses the Company's audited consolidated financial statements which have been prepared in accordance with GAAP and with the instructions to Form 10-K and Article 10 of Regulation S-X. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgments based on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates these estimates including those related to revenue recognition, allowances for doubtful accounts, reserves for sales returns and allowances and customer chargebacks, inventory mark-down provisions, estimates for unpaid healthcare claims, impairment of goodwill, tangible and intangible assets, stock compensation expense, accruals related to the Company's tax positions and tax valuation allowances. Actual results may differ from these estimates using different assumptions and under different conditions and changes in these estimates are recorded when known. The Company's significant accounting policies are more fully described in NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES in the Notes to the consolidated financial statements included in Item 15. 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.
Goodwill, intangible assets and long-lived assets
Goodwill is not amortized but, instead, is subject to an annual impairment assessment on October 1. Additionally, if events or conditions were to indicate the carrying value of a reporting unit may not be recoverable, the Company would evaluate goodwill and other intangible assets for impairment at that time.
As it relates to the goodwill assessment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment testing described in the FASB's ASC Topic 350, Intangibles - Goodwill and Other. If, after assessing qualitative factors, the Company determines that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, then no further testing is performed for that reporting unit. However, if based on the Company's qualitative assessment it concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company elects to bypass the qualitative assessment, the Company will proceed with performing the quantitative impairment test.
The Company reviews goodwill impairment annually as of October 1st or when events or changes in circumstances indicate the carrying value of these assets might exceed their current fair values. For goodwill, impairment testing is based upon the best information available using a combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.
The significant assumptions used under the income approach, or discounted cash flow method, are projected net sales, projected earnings before interest, tax, depreciation and amortization ("EBITDA") and the cost of capital. Projected net sales and projected EBITDA were determined to be significant assumptions because they are the primary drivers of the projected cash flows in the discounted cash flow fair value model. Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows.
Determining fair value using a market approach considers multiples of financial metrics based on both acquisitions and trading multiples of a selected peer group of companies. From the comparable companies, a representative market multiple is determined which is applied to financial metrics to estimate the fair value of a reporting unit.
Although the Company believes the assumptions and estimates made are reasonable and appropriate, different assumptions and estimates could materially impact its reported financial results. In addition, sustained declines in the Company's stock price and related market capitalization could impact key assumptions in the overall estimated fair values of its reporting units and could result in non-cash impairment charges that could be material to the Company's consolidated balance sheet or results of operations. Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, an impairment charge will be recorded to reduce the reporting unit to fair value.
Goodwill
The carrying value of the goodwill for the U.S. reporting unit was zero as of December 31, 2025.
In the second quarter of 2025, the Company observed a sustained decline in the market valuation of the Company's common stock. Additionally, the Company's near term forecasts for the U.S. reporting unit were revised downward due to changes in retailer and consumer buying patterns, which were impacted by the recent changes in the U.S. tariff policies. Based on these factors the Company concluded that impairment indicators for the U.S. reporting unit were present as of June 30, 2025.
The company performed an interim impairment test of the goodwill in the U.S. reporting unit as of June 30, 2025 by comparing the fair value with its carrying value. The analysis was performed by using a discounted cash flow and market multiple method. Accordingly, this fair value measurement is classified as Level 3 since it is based primarily on unobservable inputs. Based upon the analysis performed, the Company's U.S. reporting unit goodwill was fully impaired and a $33.2 million non-cash goodwill impairment charge was recognized. The goodwill impairment charge was the result of the decline in the Company's near term forecasts that were revised downward due to the changes in retailer and consumer buying patterns and an increase to the company-specific risk premium, which is an input to the cost of capital assumption, to address the potential risks in the long-term forecast which remain uncertain at this time.
Long-lived assets
Long-lived assets, including intangible assets deemed to have finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit or material adverse changes in the business climate that indicate that the carrying amount of an asset may be impaired. When impairment indicators are present, the recoverability of the asset is measured by comparing the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset is not recoverable, the impairment to be recognized is measured by the amount by which the carrying amount of each long-lived asset exceeds the fair value of the asset.
Revenue recognition
The Company sells products wholesale, to retailers and distributors, and retail, directly to consumers. Wholesale sales and retail sales are recognized at the point in time the customer obtains control of the products in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership, and where acceptance is not a formality, the customer must have accepted the product or service. The Company's principal terms of sale are Free On Board ("FOB") Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations. Shipping and handling fees that are billed to customers in sales transactions are included in net sales. Net sales exclude taxes that are collected from customers and remitted to the taxing authorities.
The Company offers various sales incentives and promotional programs to its wholesale customers from time to time in the normal course of business. These incentives and promotions typically include arrangements such as cooperative advertising, buydowns, volume rebates and discounts. These sales incentives and promotions represent variable consideration and are reflected as reductions in net sales in the Company's consolidated statements of operations. While many of the sales incentives and promotions are contractually agreed upon with the Company's customers, certain of the sales incentives and promotions are non-contractual and require the Company to estimate the amount of variable consideration based on historical experience and other known factors or as the most likely amount in a range of possible outcomes. On a quarterly basis, variable consideration is assessed on a portfolio approach in estimating the extent to which the components of variable consideration are constrained.
Payment terms vary by customer, but generally range from 30 to 90 days or at the point of sale for the Company's retail direct sales.
The Company incurs certain direct incremental costs to obtain contracts with customers, such as sales-related commissions, where the recognition period for the related revenue is less than one year. These costs are expensed as incurred and recorded within selling, general and administrative expenses in the consolidated statement of operations. Incidental items that are immaterial in the context of the contract are expensed as incurred.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of funds consists of cash provided by operating activities, borrowings available under its revolving credit facility and from time-to-time working capital reductions. The Company's primary uses of funds consist of payments of principal and interest on its debt, working capital requirements, capital expenditures and dividends. From time-to-time uses also include acquisitions and repurchases of its common stock.
At December 31, 2025 and 2024, the Company had cash and cash equivalents of $4.3 million and $2.9 million, respectively, and working capital of $242.6 million at December 31, 2025, compared to $221.8 million at December 31, 2024. The current ratio (current assets to current liabilities) was 2.8 to 1.0 at December 31, 2025, compared to 2.5 to 1.0 at December 31, 2024. The current ratio has remained relatively consistent.
At December 31, 2025, borrowings under the Company's ABL Agreement were $54.1 million and $135.0 million was outstanding under the Term Loan. 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.
Liquidity as of December 31, 2025 was $76.6 million, consisting of $4.3 million of cash and cash equivalents, $53.1 million of availability under the ABL Agreement, limited by the Term Loan financial covenant, and $19.2 million of available funding under the Receivables Purchase Agreement.
Inventory, a large component of the Company's working capital, is expected to fluctuate from period to period, with inventory levels higher primarily in the June through October time period. The Company also expects inventory turnover to fluctuate from period to period based on product and customer mix. Certain product categories have lower inventory turnover rates as a result of minimum order quantities from the Company's vendors or customer replenishment needs. Certain other product categories experience higher inventory turns due to lower minimum order quantities or trending sale demands. For the three months ended December 31, 2025 inventory turnover was 2.4 times, or 152 days, as compared to 2.4 times, or 150 days, for the three months ended December 31, 2024. Inventory turns have remained relatively consistent.
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. 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, notwithstanding the Company's efforts to monitor its customers' financial condition, the Company could be materially adversely affected by future changes in these conditions.
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 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.
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"). 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. The Term Loan requires the Company to make an annual prepayment of principal, beginning with those for the fiscal year ending December 31, 2024, based upon a percentage of the Company's excess cash flow, ("Excess Cash Flow"), if any. The percentage applied to the Company's Excess Cash Flow is based on the Company's Total Net Leverage Ratio (as defined in the Debt Agreements). When an Excess Cash Flow payment is required, each lender has the option to decline a portion or all of the prepayment amount payable to it. 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.
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 Incremental Facilities may not exceed the sum of (i) $50.0 million plus (ii) an unlimited amount so long as, in the case of (ii) only, the Company's secured net leverage ratio, as defined in and computed on a pro forma basis pursuant to the Term Loan, after giving effect to such increase, is no greater than 3.25 to 1.00, subject to certain limitations and for the period defined pursuant to the Term Loan but not to mature earlier than the maturity date of the then existing term loans.
As of December 31, 2025 and 2024, the total availability under the ABL Agreement were as follows (in thousands):
|
December 31, 2025
|
December 31, 2024
|
|||||||||||||
| Maximum aggregate principal allowed | $ | 185,588 | $ | 176,329 | ||||||||||
| Outstanding borrowings under the ABL Agreement | (54,105) | (42,693) | ||||||||||||
| Standby letters of credit | (11,564) | (8,828) | ||||||||||||
| Total availability under the ABL agreement | $ | 119,919 | $ | 124,808 | ||||||||||
Availability under the ABL Agreement is limited to the lesser of the $200.0 million commitment and the borrowing base and therefore depends on the valuation of certain current assets comprising the borrowing base. 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 may not represent actual borrowing capacity. 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, 2025, the availability under the ABL Agreement, limited by the Term Loan financial covenant, was $53.1 million.
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, 2025 | December 31, 2024 | |||||||||||||
| Current portion of Term Loan: | ||||||||||||||
| Term Loan payment | $ | 7,500 | $ | 7,500 | ||||||||||
| Estimated unamortized debt issuance costs | (2,478) | (2,609) | ||||||||||||
| Total Current portion of Term Loan | $ | 5,022 | $ | 4,891 | ||||||||||
| Non-current portion of Term Loan: | ||||||||||||||
| Term Loan, net of current portion | $ | 127,500 | $ | 135,000 | ||||||||||
| Estimated unamortized debt issuance costs | (1,573) | (4,051) | ||||||||||||
| Total Non-current portion of Term Loan | $ | 125,927 | $ | 130,949 | ||||||||||
As of December 31, 2025, the Company estimates no excess cash flow payment will be due for 2025. The 2024 excess cash flow payment of $1.2 million was paid on April 4, 2025 and reduced the scheduled quarterly payment due on June 30, 2025.
As of December 31, 2025, the future principal payments of the Term Loan are as follows (in thousands):
| 2026 | $ | 7,500 | |||
| 2027 | 127,500 | ||||
| Total | $ | 135,000 | |||
The Company's payment obligations under its Debt Agreements are unconditionally guaranteed by its existing and future U.S. subsidiaries with certain minor exceptions. Certain payment obligations under the ABL Agreement are also direct obligations of its foreign subsidiary borrowers designated as such under the ABL Agreement and, subject to limitations on such guaranty, are guaranteed by the foreign subsidiary borrowers, as well as by the Company. The obligations of the foreign subsidiary borrowers under the ABL Agreement are secured by security interests in substantially all of the assets of, and stock in, such foreign subsidiary borrowers, subject to certain limitations. 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. 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.
Borrowings under the revolving credit facility bear interest, at the Company's option, at one of the following rates: (i) an alternate base rate, defined, for any day, as the greater of the prime rate, a federal funds and overnight bank funding based rate plus 0.5% or one-month Adjusted Term SOFR plus 1.0% as of a specified date in advance of the determination, but in each case not less than 1.0%, plus a margin of 0.25% to 0.5%, or (ii) Adjusted Term SOFR, which is the Term SOFR Rate for the selected 1, 3 or 6 month interest period plus 0.10% (or Euro Interbank Offered Rate "EURIBOR" for borrowings denominated in Euro; or Sterling Overnight Index Average "SONIA" for borrowings denominated in Pounds Sterling), but in each case not less than zero, plus a margin of 1.25% to 1.50%. The respective margins are based upon average quarterly availability, as defined in and computed pursuant to the ABL Agreement. In addition, the Company pays a commitment fee of 0.20% to 0.25% per annum based on the average daily unused portion of the aggregate commitment under the ABL Agreement. The interest rate on outstanding borrowings under the ABL Agreement at December 31, 2025 was between 3.29% and 7.13%. The Company paid a commitment fee of 0.25% on the unused portion of the ABL Agreement during the year ended December 31, 2025.
The Term Loan bears interest, at the Company's option, at one of the following rates: (i) alternate base rate, defined, for any day, as the greater of (x) the prime rate, (y) a federal funds and overnight bank funding based rate plus 0.5% or (z) one-month Adjusted Term SOFR, but not less than 1.0% , plus 1.0%, plus a margin of 4.5% or (ii) Adjusted Term SOFR (Term SOFR plus the Term SOFR Adjustment) for the applicable interest period, but not less than 1.0%, plus a margin of 5.5%. The interest rate on outstanding borrowings under the Term Loan at December 31, 2025 was 9.35%.
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. Under the Term Loan, the Total Net Leverage Ratio is not permitted to be greater than 5.00 to 1.00 determined as of the end of each fiscal quarters. Further, the ABL Agreement provides that during any period (a) commencing on the last day of the most recently ended four consecutive fiscal quarters on or prior to the date availability under the ABL Agreement is less than the greater of $20.0 million and 10% of the aggregate commitment under the ABL Agreement at any time and (b) ending on the day after such availability has exceeded the greater of $20.0 million and 10% of the aggregate commitment under the ABL Agreement for 45 consecutive days, the Company is required to maintain a minimum fixed charge coverage ratio of 1.10 to 1.00 as of the last day of any period of four consecutive fiscal quarters.
The Company was in compliance with the covenants of the Debt Agreements at December 31, 2025.
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.
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. This measure is provided because management of the Company uses this financial measure in evaluating the Company's ongoing financial results and trends. 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.
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. 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.
The following is a reconciliation of net (loss) income as reported to adjusted EBITDA for the years ended December 31, 2025 and 2024 and each fiscal quarter of 2025 and 2024:
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
|
March 31, 2025
|
June 30, 2025
|
September 30, 2025
|
December 31, 2025
|
December 31, 2025
|
|||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
|
Net (loss) income as reported
|
$ | (4,201) | $ | (39,699) | $ | (1,189) | $ | 18,152 | $ | (26,937) | |||||||||||||||||||
|
Income tax (benefit) provision
|
(142) | (2,782) | 2,861 | (3,220) | (3,283) | ||||||||||||||||||||||||
| Interest expense | 4,915 | 5,054 | 5,013 | 5,048 | 20,030 | ||||||||||||||||||||||||
| Depreciation and amortization | 5,698 | 5,437 | 5,398 | 5,315 | 21,848 | ||||||||||||||||||||||||
| Gain on disposition of fixed assets | - | - | (94) | - | (94) | ||||||||||||||||||||||||
|
Mark to market loss (gain) on interest rate derivatives
|
527 | 220 | 8 | (1) | 754 | ||||||||||||||||||||||||
| Goodwill impairment | - | 33,237 | - | - | 33,237 | ||||||||||||||||||||||||
| Stock compensation expense | 1,062 | 1,044 | 994 | 201 | 3,301 | ||||||||||||||||||||||||
|
Legal settlement gain, net(1)
|
(4,578) | - | - | - | (4,578) | ||||||||||||||||||||||||
| Severance expense | - | 270 | - | 241 | 511 | ||||||||||||||||||||||||
| Acquisition related expenses | - | 123 | 49 | 1,799 | 1,971 | ||||||||||||||||||||||||
| Restructuring expenses | - | - | 304 | 24 | 328 | ||||||||||||||||||||||||
|
Warehouse redesign expenses(2)
|
- | 139 | 76 | 48 | 263 | ||||||||||||||||||||||||
|
Pro forma adjustments(3)
|
3,400 | ||||||||||||||||||||||||||||
|
Adjusted EBITDA(4)
|
$ | 3,281 | $ | 3,043 | $ | 13,420 | $ | 27,607 | $ | 50,751 | |||||||||||||||||||
(1) For the year ended December 31, 2025, legal settlement gain, net included a net settlement of $6.4 million discussed in NOTE 13 - COMMITMENTS AND CONTINGENCIES, and adjusted for legal fees incurred from March 2, 2018 through March 31, 2025 of $1.8 million.
(2)For the year ended December 31, 2025, the warehouse redesign expenses were related to the U.S. segment.
(3) Pro forma adjustments represent the amount of operating expense reductions projected by the Company as a result of actions taken through December 31, 2025 or expected to be taken within 18 months of December 31, 2025, net of the benefits realized during the twelve months ended December 31, 2025. These actions include cost savings initiatives for the U.S. segment related to reductions in employee expenses (i.e., including terminated employees) and costs saving for the International segment related to Project Concord.
(4)Adjusted EBITDA is a non-GAAP financial measure that is defined in the Company's debt agreements. Adjusted EBITDA is defined as net (loss) income, adjusted to exclude income tax (benefit) provision, interest expense, depreciation and amortization, gain on disposition of fixed assets, mark to market loss (gain) on interest rate derivatives, goodwill impairment, stock compensation expense, legal settlement gain, net, and other items detailed in the table above that are consistent with exclusions permitted by our debt agreements.
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
|
March 31, 2024
|
June 30, 2024
|
September 30, 2024
|
December 31, 2024
|
December 31, 2024
|
|||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
|
Net (loss) income as reported
|
$ | (6,260) | $ | (18,167) | $ | 344 | $ | 8,918 | $ | (15,165) | |||||||||||||||||||
| Loss on equity securities | - | 14,152 | - | - | 14,152 | ||||||||||||||||||||||||
|
Equity in losses, net of taxes
|
2,092 | - | - | - | 2,092 | ||||||||||||||||||||||||
|
Income tax provision (benefit)
|
210 | (57) | 1,507 | 1,671 | 3,331 | ||||||||||||||||||||||||
| Interest expense | 5,614 | 5,157 | 5,834 | 5,603 | 22,208 | ||||||||||||||||||||||||
| Depreciation and amortization | 4,939 | 4,894 | 6,408 | 6,073 | 22,314 | ||||||||||||||||||||||||
|
Mark to market loss (gain) on interest rate derivatives
|
174 | 82 | 928 | (718) | 466 | ||||||||||||||||||||||||
| Stock compensation expense | 807 | 1,037 | 1,042 | 1,034 | 3,920 | ||||||||||||||||||||||||
| Acquisition related expenses | 95 | 641 | 210 | 143 | 1,089 | ||||||||||||||||||||||||
|
Warehouse redesign expenses (1)
|
18 | 35 | 662 | 249 | 964 | ||||||||||||||||||||||||
|
Adjusted EBITDA(2)
|
$ | 7,689 | $ | 7,774 | $ | 16,935 | $ | 22,973 | $ | 55,371 | |||||||||||||||||||
(1)For the year ended December 31, 2024, the warehouse redesign expenses related to the U.S. segment.
(2)Adjusted EBITDA is a non-GAAP financial measure which is defined in the Company's debt agreements. 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.
Capital expenditures
Capital expenditures for the year ended December 31, 2025 were $4.4 million.
Derivatives
The Company's risk management strategy includes the use of derivative financial instruments to manage its exposure to interest rate movements and to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates primarily to offset the earnings impact related to inventory purchases. The Company does not enter into derivative transactions for trading purposes. The Company classifies cash flows from its derivative transactions as cash flows from operating activities in the consolidated statements of cash flows.
The Company's derivatives expose it to credit risks from possible non-performance by counterparties. The Company has limited its credit risk by entering into derivative transactions exclusively with investment-grade rated financial institutions and monitors the creditworthiness of these financial institutions on an ongoing basis. The Company utilizes standard counterparty master netting agreements that net certain foreign currency and interest rate swap transactions in the event of the insolvency of one of the parties to the transaction. These master netting arrangements permit the Company to net amounts due from the Company to counterparty with amounts due to the Company from the same counterparty. Although all of the Company's recognized derivative assets and liabilities are subject to enforceable master netting arrangements, the Company has elected to present these assets and liabilities on a gross basis.
The Company does not anticipate non-performance by any of its counterparties.
Interest Rate Swap Agreements
To manage its exposures to interest rate movements, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
In March 2024 and October 2024, the Company entered into new interest rate swap agreements, each with an aggregate notion value of $25.0 million and expire in August 2027. These interest rate swaps have not been designated as accounting hedges and are intended to serve as cash flow hedges to economically hedge the Company's exposure to the variability in interest payments on a portion of its Term Loan borrowings. Accordingly, changes in fair value are recognized in earnings in the period incurred. The Company's total outstanding notional value of interest rate swaps was $50.0 million at December 31, 2025.
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. The Company designates these contracts for accounting purposes as cash flow hedges. The Company purchases foreign currency forward contracts with terms less than 18 months. The aggregate gross notional value of foreign exchange contracts at December 31, 2025 and 2024 were zero and $8.0 million, respectively.
Dividends
Dividends were declared in 2025 and 2024 as follows:
| Dividend per share | Date declared | Date of record | Payment date | |||||||||||||||||
| $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 | |||||||||||||||||
| $0.0425 | March 11, 2025 | May 1, 2025 | May 15, 2025 | |||||||||||||||||
| $0.0425 | June 18, 2025 | August 1, 2025 | August 15, 2025 | |||||||||||||||||
| $0.0425 | August 5, 2025 | October 31, 2025 | November 14, 2025 | |||||||||||||||||
| $0.0425 | November 4, 2025 | January 30, 2026 | February 13, 2026 | |||||||||||||||||
On March 9, 2026, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on May 15, 2026 to shareholders of record on May 1, 2026.
Cash provided by operating activities
Net cash provided by operating activities was $7.6 million in 2025, compared to $18.6 million in 2024. The decrease from 2025 compared to 2024 was attributable to timing of payments for accounts payable and accrued expenses, partially offset by lower investment in inventory, and a net legal settlement gain received in the current period.
Cash used in investing activities
Net cash used in investing activities was $4.3 million in 2025, compared to $2.2 million in 2024. The increase in cash used in investment activities was driven by purchases of equipment for the Hagerstown Facility.
Cash used in financing activities
Net cash used in financing activities was $2.2 million in 2025 compared to $29.5 million in 2024. The change from 2025 compared to 2024 was attributable to higher net proceeds from the revolving credit facility in the 2025 period, compared to net repayments of revolving credit facility in the 2024 period.
MATERIAL CASH REQUIREMENTS
The Company's material cash requirements include the following:
Debt
As of December 31, 2025, the Company had an outstanding Term Loan facility, which matures on August 26, 2027, for an aggregate principal amount of $135 million, with $7.5 million amounts due within 12 months. Estimated future interest obligations associated with debt and interest rate swaps total $25.9 million, with $15.5 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, 2025 remain consistent to the end of the debt agreements. Actual amounts borrowed and interest rates may vary over time.
Leases
The Company has operating leases for corporate offices, distribution facilities, manufacturing plants, and certain vehicles. As of December 31, 2025, the Company had fixed lease payment obligations of $68.6 million, with $19.3 million payable within 12 months.
Royalties
The Company has license agreements that require the payment of minimum royalties on sales of licensed products. As of December 31, 2025, the estimated minimum royalties payable under the noncancellable terms of these agreements amounted to $8.6 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. As of December 31, 2025, the estimated discounted obligations under the agreements with the former executives amounted to $4.7 million, with $0.4 million payable within 12 months.
Wallace EPA Matter
As of December 31, 2025, in connection with the Wallace EPA Matter, the Company's estimated remediation liability amounted to $5.3 million, with $0.8 million is expected to be paid within 12 months. The Company has provided financial assurance of $5.6 million in the form of a letter of credit.
Hagerstown Facility Relocation
In connection with the relocation of the Company's East Coast distribution center to the Hagerstown Facility the Company expects to incur the following:
i) Fixed lease payment obligations of $123.4 million, with $3.7 million payable in 2026. The lease is expected to commence in April 2026.
ii) Capital expenditures of approximately $9.3 million related to equipment and certain leasehold improvements, with $7.0 million remaining to be purchased in the next 12 months.
iii) Estimated exit costs of $7.0 million, which are expected to be paid in the next 12 months. This includes employee severance, certain employee relocation costs and remaining lease costs for the Robbinsville Facility through the end of the term.
iv) The asset retirement obligations related to the Robbinsville warehouse of $1.4 million to be settled in the next 12 months.
iv) Estimated start-up costs of $7.0 million, which are expected to be paid in the next 12 months. This includes recruitment, relocation of inventory, set up costs and lease expenses prior to the Hagerstown Facility being fully operational.
Lifetime Brands Inc. published this content on March 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 12, 2026 at 21:25 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]