Financial Analysis

CONTINGENCIES Wallace EPA Matter Wallace Silversmiths de Puerto Rico, Ltd. (WSPR), a wholly-owned subsidiary of the Company, operates a manufacturing facility in San German, Puerto Rico that is leased from the Puerto Rico Industrial Development Company (PRIDCO). In March 2008, the U.S. Environmental Protection Agency (the EPA) announced that the San German Ground Water Contamination site in Puerto Rico (the Site) had been added to the Superfund National Priorities List due to organic compounds present in the local drinking water supply. In May 2008, WSPR received from the EPA a Notice of Potential Liability and Request for Information pursuant to 42 U.S.C. Sections 9607(a) and 9604(e) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In July 2011, WSPR received a letter from the EPA requesting access to the property that it leases from PRIDCO to conduct an environmental investigation, and the Company granted such access. In February 2013, the EPA requested access to conduct a further environmental investigation at the property. PRIDCO agreed to such access and the Company consented. The EPA conducted a further investigation during 2013 and, in April 2015, notified the Company and PRIDCO that the results from vapor intrusion sampling may warrant the implementation of measures to mitigate potential exposure to sub-slab soil gas. The Company reviewed the information provided by the EPA and requested that PRIDCO, as the property owner, find an …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

DEBT On August 26, 2022, the Company entered into Amendment No. 2 (the Amendment) to the Companys 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 requires the Company to make 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 Companys excess cash flow, (Excess Cash Flow), if any. The percent …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present the Companys net sales disaggregated by segment, product category and geographic region for the three and nine months ended September 30, 2025 and 2024 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 U.S. segment Kitchenware $ 98,558 $ 97,343 $ 260,628 $ 261,660 Tableware 31,634 40,917 80,534 93,017 Home Solutions 27,929 31,962 64,784 76,528 Total U.S. segment 158,121 170,222 405,946 431,205 International segment 13,791 13,615 37,913 36,540 Total net sales $ 171,912 $ 183,837 $ 443,859 $ 467,745 United States $ 151,041 $ 159,759 $ 390,292 $ 409,588 United Kingdom 8,763 8,909 22,950 23,525 Rest of World 12,108 15,169 30,617 34,632 Total net sales $ 171,912 $ 183,837 $ 443,859 $ 467,745 …

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STOCK COMPENSATION As of September 30, 2025, there were 908,049 shares available for the grant of awards under the Companys Amended and Restated 2000 Long Term Incentive Plan (Plan), assuming maximum performance of performance-based awards. Option Awards A summary of the Companys stock option activity and related information for the nine months ended September 30, 2025 is as follows: Options Weighted- average exercise price Weighted- average remaining contractual life (years) Aggregate intrinsic value (in thousands) Options outstanding, January 1, 2025 782,500 $ 11.41 Grants 44,500 5.13 Options outstanding, September 30, 2025 (1) 827,000 11.07 4.3 $ Options exercisable, September 30, 2025 700,000 $ 11.73 3.5 $ Total unrecognized stock option expense remaining (in thousands) $ 311 Weighted-average years expected to be recognized over 1.6 (1) Includes a non-plan stock option award of 15,000 stock options granted in 2024. The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their exercisable in-the-money stock options on September 30, 2025. The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Companys common stock on September 30, 2025 and the exercise price. Restricted Stock A summary of the Companys restricted stock activity and related information for the nine months ended September 30, …

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INTANGIBLE ASSETS Intangible assets consisted of the following as of September 30, 2025 and December 31, 2024 (in thousands): September 30, 2025 December 31, 2024 Gross Impairment Accumulated Amortization Net Gross Accumulated Amortization Net Goodwill (1) $ 33,237 $ (33,237) $ $ $ 33,237 $ $ 33,237 Finite-lived intangible assets: Licenses 15,847 (12,908) 2,939 15,847 (12,566) 3,281 Trade names 104,614 (33,717) 70,897 104,459 (28,619) 75,840 Customer relationships 143,159 (80,886) 62,273 143,157 (73,505) 69,652 Other 5,894 (4,732) 1,162 5,868 (4,351) 1,517 Total $ 302,751 $ (33,237) $ (132,243) $ 137,271 $ 302,568 $ (119,041) $ 183,527 (1) The net value at September 30, 2025 reflects a reduction of $113.0 million impairment charges within U.S. segment and $11.9 million impairment charges within International segment. The gross and net value at December 31, 2024 reflect a reduction of $79.8 million impairment charges within U.S. segment and $11.9 million impairment charges within International segment. Goodwill impairment test 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 …

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INCOME TAXES Income tax provision of $2.9 million and income tax benefit of $(0.1) million for the three and nine months ended September 30, 2025, respectively, represent taxes on both U.S. and foreign earnings at a combined effective income tax provision rate of 171.1% and benefit rate of 0.14%, respectively. The effective tax rate for the three months ended September 30, 2025 differs from the federal statutory income tax rate of 21.0% primarily due to the impact of non-deductible expenses, foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance and a partial valuation allowance on U.S. deferred tax assets that are not more likely than not to be realized as a result of the goodwill impairment in the second quarter. The effective tax rate for the nine months ended September 30, 2025 differs from the federal statutory income tax rate of 21.0% primarily due to a partial valuation allowance on U.S. deferred tax assets that are not more likely than not to be realized as a result of the goodwill impairment in the second quarter. Income tax provision of $1.5 million and $1.7 million for the three and nine months ended September 30, 2024, respectively, represent taxes on both U.S. and foreign earnings at a combined effective income tax provision rate of 81.4% and (8.2)%, respectively. The effective tax rate for the three months ended September 30, 2024 differs from the federal statutory income tax rate of 21.0% primarily due …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

LEASES The Company has operating leases for corporate offices, distribution facilities, a manufacturing plant, and certain vehicles. The components of lease expense for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating lease expenses (1) : Fixed lease expense $ 4,326 $ 4,276 $ 12,902 $ 12,804 Variable lease expense 1,600 1,628 5,165 4,646 Total $ 5,926 $ 5,904 $ 18,067 $ 17,450 (1) Expenses are recorded within distribution expenses and selling, general and administrative expenses on the unaudited condensed consolidated statement of operations. Supplemental cash flow information for lease related liabilities and assets for the nine months ended September 30, 2025 and 2024 were as follows (in thousands): Nine Months Ended September 30, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 14,636 $ 14,280 Nine Months Ended September 30, 2025 2024 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 754 $ 479 The aggregate future lease payments for operating leases as of September 30, 2025 were as follows (in thousands): Operating 2025 (excluding the nine months ended September 30, 2025) $ 4,900 2026 19,315 2027 15,080 2028 13,068 2029 6,829 2030 5,007 Thereafter 9,234 Total lease payments 73,433 Less: Interest (11,002) Present value of lease pa …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

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 Companys financial position, results of operations, and disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures: This guidance is intended to enhance the transparency and decision usefulness of 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. Early adoption is permitted. The new guidance is effective for public business entities for annual periods beginning after December 15, 2024 on a prospective basis. Retrospective application is permitted. Management is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense 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 a …

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REVENUE 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 Companys principal terms of sale are Free On Board (FOB) Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations. Shipping and handling fees that are billed to customers in sales transactions are included in net sales and amounted to $1.1 million and $2.5 million, respectively, for the three and nine months ended September 30, 2025 and $0.9 million and $2.2 million, respectively, for the three and nine months ended September 30, 2024. Net sales exclude taxes that are collected from customers and remitted to the taxing authorities. Th …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

BUSINESS SEGMENTS Segment information The Company operates in two reportable segments: U.S. and International. The U.S. segment is the Companys 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 Companys international business that sells and distributes products to consumers primarily in the U.K., the European Union and the Asia Pacific region. The Companys chief operation decision maker (CODM) is the Companys Chief Executive Officer. The Company has segmented its operations to reflect the manner in which the CODM reviews and evaluates the results of its operations. The CODM allocates operating and capital resources and evaluates the performance of the Companys segments based on segment net sales, segment gross margin, and segment income (loss) from operations. Such measures give recognition to specifically identifiable operating costs. Significant segment expenses that are included in segment operating income consist of cost of sales, distribution expenses (which include freight-out expenses and warehouse expenses) and selling, general and administrative expenses. Certain general and administrative expenses are not allocated to the Companys segments as these represent corporate level activities and are reflected below as unallocated corporate expenses. These costs primarily include senior …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing