Q4 2025 Lifetime Brands Inc Earnings Call

March 12, 2026

Speaker #2: There will be a question-and-answer portion of the call. If you would like to ask a question during this time, please press star and one on your touchstone telephones.

Speaker #2: Please also note today's event is being recorded. At this time, I'd like to introduce our host for today's conference, Jamie Kirchen. Mr. Kirchen, you may go ahead.

Speaker #2: Good morning, and thank you for joining Lifetime Brands' fourth quarter 2025 earnings call. With us today from management are Rob K., Chief Executive Officer, and Larry Winoker, Chief Financial Officer.

Jamie Kirchen: Good morning, and thank you for joining Lifetime Brands Q4 2025 Earnings Call. With us today from management are Robert Kay, Chief Executive Officer, and Laurence Winoker, Chief Financial Officer. Before we begin the call, I'd like to remind you that our remarks this morning may contain forward-looking statements that relate to the future of the company. These statements are intended to qualify for the safe harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance, and factors that could influence our results are highlighted in our earnings release, and other factors are contained in our filings with the Securities and Exchange Commission. Such statements are based upon information available to the company as of the date hereof and are subject to change for future development.

Speaker #2: Before we begin the call, I'd like to remind you that our remarks this morning may contain forward-looking statements that relate to the future of the company.

Speaker #2: And these statements are intended to qualify for the Safe Harbor Protection from Liability established by the Private Security Litigation Reform Act. Any such statements are not guarantees of future performance and factors that could influence our results are highlighted in our earnings release.

Speaker #2: And other factors are contained in our filings with the Securities and Exchange Commission. Such statements are based upon information available to the company as of the date hereof and are subject to change for future development.

Speaker #2: Except as required by law, the company does not undertake any obligation to update such statements. Our remarks this morning and in our earnings release also contain non-GAAP financial measures within the meaning of regulation G promulgated by the Securities and Exchange Commission.

Jamie Kirchen: Except as required by law, the company does not undertake any obligation to update such statements. Our remarks this morning and in our earnings release also contain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included in such release is a reconciliation of these non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP. With that introduction, I'd like to turn the call over to Rob Kay. Please go ahead, Rob.

Speaker #2: Included in such release is a reconciliation of these non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP. With that introduction, I'd like to turn the call over to Rob K. Please go ahead, Rob.

Speaker #3: Thank you. Good morning. A year ago, we entered 2025 knowing it would be a challenging year. What we did not fully anticipate was just how dynamic the external environment would become.

Robert Kay: Thank you, and good morning. A year ago, we entered 2025 knowing it would be a challenging year. What we did not fully anticipate was just how dynamic the external environment would become. The tariff escalations, retail customer disruption, consumers' reactions, and the operational demands were all significant. Yet, when I look at where we stand today, I'm proud of how our team performed and where we finished the year. Let me walk you through the key dynamics that shaped both the Q4 and the full year, and the decisions we made, including those that carried short-term costs and why they were right for our business. Overall, what drove Lifetime's 2025 performance was the macro environment, largely shaped by US tariff actions and the market's reaction to them.

Speaker #3: The tariff escalations, retail customer disruption, consumers' reactions, the operational demands, were all significant. And yet, when I look at where we stand today, I'm proud of how our team performed and where we finished the year.

Speaker #3: Let me walk you through the key dynamics that shaped both the fourth quarter and the full year, and the decisions we made—including those that carried short-term costs—and why they were right for our business.

Speaker #3: Overall, what drove LIFETIME's 2025 performance was the macro environment, largely shaped by US tariff actions and the market's reaction to them. The biggest impact of this was the second quarter implementation of a 145% tariff on goods sourced from China, following the Liberation Day tariffs implemented on many countries throughout the globe.

Robert Kay: The biggest impact of this was the Q2 implementation of 145% tariffs on goods sourced from China following the Liberation Day tariffs implemented on many countries throughout the globe. This resulted in widescale disruption and, in some cases, cancellation of orders for our products, both by our customers and internally by Lifetime, as the immediacy of the implementation would have resulted in selling products at a loss. As the year progressed and some stability was introduced on tariff rates, Lifetime was a first mover in implementing price increases across all our channels to offset the tariff cost. While this initially hurt our volumes as we were selling our products at a higher price than most of our competition, the market eventually caught up and pricing parity was restored.

Speaker #3: This resulted in wide-scale disruption and, in some cases, cancellation of orders for our products, both by our customers and internally by Lifetime, as the immediacy of the implementation would have resulted in selling products at a loss.

Speaker #3: As the year progressed, and some stability was introduced on tariff rates, LIFETIME was a first mover in implementing price increases across all our channels, to offset the tariff cost.

Speaker #3: While this initially hurt our volumes, as we were selling our products at a higher price than most of our competition, the market eventually caught up and pricing parity was restored.

Speaker #3: However, Lifetime benefited from enhanced profitability due to the price increases, which led to improved performance relative to the overall market and many of our peers.

Robert Kay: However, Lifetime benefited from enhanced profitability due to the price increases, which led to improved performance relative to the overall market and many of our peers. In particular, we note that bottom line results showed a positive year-over-year growth by Q4 of 2025. Contributing to this performance was our pricing strategy, a comprehensive cost efficiency and reduction program, and improved results in our international business. First, as we told you earlier in the year, the impact of the 145% tariffs on China-sourced product was significant. It negatively impacted shipments in Q2 and flowed into disruption in Q3. We specifically called out that some of that deferred volume would come back in 2025, with a fuller normalization expected in 2026.

Speaker #3: In particular, we note that bottom-line results showed a positive year-over-year growth by the fourth quarter of 2025. Contributing to this performance was our pricing strategy, a comprehensive cost-efficiency and reduction program, and improved results in our international business.

Speaker #3: First, as we told you earlier in the year, the impact of the $145% tariffs on China-sourced product was significant. It negatively impacted shipments in the second quarter and flowed into disruption in the third.

Speaker #3: We specifically called out that some of that deferred volume would come back in 2025 with a fuller normalization expected in 2026. As you can see, we benefited by the current quarter with some resumption in shipment levels from missed second-quarter shipments particularly in tabletop and kitchenware.

Robert Kay: As you can see, we benefited by the current quarter with some resumption in shipment levels from missed Q2 shipments, particularly in tabletop and kitchenware. The most visible example is Costco, our largest year-over-year decline in any single customer through September. They pulled back sharply on tabletop programs as tariff uncertainty peaked. As conditions stabilized, a portion of those programs shipped in Q4, and we performed very well with Costco in Q4. That recovery was a meaningful contributor to our strong finish. The second major factor driving performance was Lifetime's decision to move first on pricing to offset tariff costs. We did not wait to see what the market would do. We built a detailed plan with each of our customers, communicating the rationale clearly and implementing the increases. As I mentioned above, there were short-term consequences.

Speaker #3: The most visible example is Costco, our largest year-over-year decline in any single customer through September. They pulled back sharply on tabletop programs as tariffs uncertainty peaked.

Speaker #3: But as conditions stabilized, a portion of those programs shipped in the fourth quarter and we performed very well with Costco in Q4. That recovery was a meaningful contributor to our strong finish.

Speaker #3: The second major factor driving performance was LIFETIMES' decision to move first on pricing to offset tariff costs. We did not wait to see what the market would do.

Speaker #3: We built a detailed plan with each of our customers communicating the rationale clearly and implementing the increases. As I mentioned above, there were short-term consequences.

Speaker #3: In the third quarter, we were priced higher than the market and that created some volume headwinds. A portion of our shelf performance suffered while competitors had not yet moved.

Robert Kay: In Q3, we were priced higher than the market, and that created some volume headwinds. A portion of our shelf performance suffered while competitors had not yet moved. By Q4, the market had largely caught up. Pricing parity had returned across all our categories. Because we had been selling at higher prices earlier than most, we captured better margins during that window. If you look at our results, particularly the bottom line, you can see that clearly. We had a modest outperformance on the top line, but we significantly exceeded expectations on the bottom line. Our first-mover pricing decision was a key contributor to that outcome. The third element of our Q4 performance was cost discipline. Variable costs naturally flex with volume, but we also took deliberate action on our cost structure throughout the year.

Speaker #3: But by the fourth quarter, the market had largely caught up. Pricing parity had returned across all our categories. And because we had been selling at higher prices earlier than most, we captured better margins during that window.

Speaker #3: If you look at our results, particularly the bottom line, you can see that clearly. We had a modest outperformance on the top line, but we significantly exceeded expectations on the bottom line.

Speaker #3: Our first mover pricing decision was a key contributor to that outcome. The third element of our Q4 performance was cost discipline. Variable costs naturally flex with volume but we also took deliberate action on our cost structure throughout the year.

Speaker #3: We streamlined infrastructure, and SG&A came in at $38 million in Q4, down 12% versus the prior year quarter. That's a meaningful reduction, and it reflects real work done on the cost base.

Robert Kay: We streamlined infrastructure, and SG&A came in at $38 million in Q4, down 12% versus the prior year quarter. That's a meaningful reduction, and it reflects real work done on the cost base. Combined, these three factors drove a strong quarter and finish to the year. The Q4 came in ahead of expectations, and I think the results speak to the strategy working. Revenue was modestly below prior year, which we anticipated, but margins expanded and the bottom line was strong. Larry will take you through the detail in a moment. While the year was challenging due to tariffs, we took the decisive actions I've discussed to mitigate their effects. Given the circumstances, we performed well, as evidenced by our results.

Speaker #3: Combined, these three factors drove a strong quarter and finish to the year. The fourth quarter came in ahead of expectations, and I think the results speak to the strategy working.

Speaker #3: Revenue was modestly below prior year which we anticipated but margins expanded and the bottom line was strong. Larry will take you through the detail in a moment.

Speaker #3: While the year was challenging due to tariffs, we took the decisive actions I've discussed to mitigate their effects. Given the circumstances, we performed well as evidenced by our results.

Speaker #3: In the fourth quarter, adjusted income from operations was up over 30% from the prior year quarter and full-year adjusted EBITDA was over 50 million dollars despite a 5% decline in net sales.

Robert Kay: In Q4, adjusted income from operations was up over 30% from the prior year quarter, and full-year adjusted EBITDA was over $50 million, despite a 5% decline in net sales. We continue to experience positives from our investment in new product development. The Dolly brand grew to approximately $18 million for the year, an increase of over 150%, a great reflection on where the strategy is gaining traction. We are encouraged by the trajectory heading into 2026. Our international segment continued to demonstrate resilience. For the full year, international sales came in at $56.7 million, up 1.7% as reported. On a constant currency basis, international was down modestly at 1.7%.

Speaker #3: We continued to experience positives from our investment in new product development. The Dolly brand grew to approximately $18 million for the year, an increase of over 150%.

Speaker #3: A great reflection on where the strategy is gaining traction. We are encouraged by the trajectory heading into 2026. Our international segment continued to demonstrate resilience.

Speaker #3: For the full year international sales came in at 56.7 million up 1.7% as reported. On a constant currency basis, international was down modestly at 1.7%.

Speaker #3: A solid result given the backdrop, particularly as we gained share in national accounts in light of a continued decline in independent shops which historically have been the core of the European customer base.

Robert Kay: A solid result given the backdrop, particularly as we gained share in national accounts in light of a continued decline in independent shops, which historically have been the core of the European customer base. On Project Concord, our international restructuring initiative, we made continued progress throughout the year and the financial benefits are flowing through. That said, I want to be transparent. The final phase of Concord implementation was delayed modestly due to legal and structural constraints that took longer than anticipated to work through. We expect those to be fully resolved and implemented in the first half of 2026. The direction here remains clear, and we remain committed to completing Concord and realizing the full benefits of the program. As announced early last year, we also took deliberate action on our distribution infrastructure, announcing the relocation of our East Coast Distribution Center to Hagerstown, Maryland.

Speaker #3: On Project Concord, our international restructuring initiative, we made continued progress throughout the year, and the financial benefits are flowing through. That said, I want to be transparent.

Speaker #3: The final phase of Concord implementation was delayed modestly due to legal and structural constraints that took longer than anticipated to work through. We expect those to be fully resolved and implemented in the first half of 2026.

Speaker #3: The direction here remains clear. And we remain committed to completing Concord and realizing the full benefits of the program. As announced early last year, we also took deliberate action on our distribution infrastructure.

Speaker #3: Announcing the relocation of our East Coast Distribution Center to Hagerstown, Maryland. The facility will span approximately 1 million square feet adding 327,000 square feet of incremental capacity over our current New Jersey facility.

Robert Kay: The facility will span approximately 1 million sq ft, adding 327,000 sq ft of incremental capacity over our current New Jersey facility, which it will replace, and is expected to commence operations in Q2 2026. This move is consistent with how we approach the business, identifying where we can drive long-term efficiency and positioning Lifetime's operations to support our multi-year growth initiatives while significantly containing Lifetime's future distribution expenses. As we enter 2026, we do so with momentum, a leaner cost structure, and a clearer sense of where the opportunities are. On guidance, consistent with our historical cadence, we intend to provide detailed full year 2026 guidance in conjunction with our Q1 results in mid-May.

Speaker #3: Which it will replace. And is expected to commence operations in the second quarter of 2026. This move is consistent with how we approach the business.

Speaker #3: Identifying where we can drive long-term efficiency and positioning LIFETIMES' operations to support our multi-year growth initiatives. While significantly containing LIFETIMES' future distribution expenses. As we enter 2026, we do so with momentum.

Speaker #3: A leaner cost structure and a clearer sense of where the opportunities are. On guidance, consistent with our historical cadence, we intend to provide detailed, full-year 2026 guidance in conjunction with our first quarter results in mid-May.

Speaker #3: At that point, we will have a clearer line of sight into the year and can speak to it with the specificity you deserve. What I can tell you now is that recovering sustainable top-line growth is the priority.

Robert Kay: At that point, we will have a clearer line of sight into the year and can speak to it with specificity you deserve. What I can tell you now is that recovering sustainable top line growth is the priority. We have done the work on the cost base and proven we can protect margins. Now the focus shifts to driving volume through our existing customer relationships, through the brands and product lines that are gaining traction, and through the pipeline of strategic activity that we continue to develop. Finally, I want to acknowledge that this type of year, navigating real disruption while delivering results that exceeded where we started, does not happen without an exceptional team. I'm grateful for everyone at Lifetime who stayed focused, executed under pressure, and kept our commitments to customers and shareholders alike.

Speaker #3: We have done the work on the cost base and proven we can protect margins. Now, the focus shifts to driving volume through our existing customer relationships, through the brands and product lines that are gaining traction.

Speaker #3: And through the pipeline of strategic activity that we continue to develop. Finally, I want to acknowledge that this type of year navigating real disruption while delivering results that exceeded where we started does not happen without an exceptional team.

Speaker #3: I'm grateful for everyone at Lifetime who stayed focused, executed under pressure, and kept our commitments to customers and shareholders alike. With that, I'll turn the call over to Larry to review the financials in more detail.

Robert Kay: With that, I'll turn the call over to Larry to review the financials in more detail.

Speaker #1: Thanks, Rob. As we reported this morning, net income for the fourth quarter of 2025 was 18.2 million or 83 cents per diluted share compared to 8.9 million or 41 cents per diluted share in the fourth quarter of '24.

Laurence Winoker: Thanks, Rob. As we reported this morning, net income for Q4 2025 was $18.2 million or $0.83 per diluted share, compared to $8.9 million or $0.41 per diluted share in Q4 2024. Adjusted net income was $23 million for Q4 2025 or $1.05 per diluted shares compared to $12 million or $0.55 per diluted share in 2024. Income from operations were $20 million for Q4 2025 as compared to $15.5 million in 2024. Adjusted income from operations for Q4 2025 was $26.4 million compared to $20.2 million in 2024. Adjusted EBITDA for the full year 2025 was $50.8 million.

Speaker #1: Adjusted net income was 23 million for the fourth quarter. For $1.05 per diluted share is compared to 12 million or 55 cents per diluted share in '24.

Speaker #1: Income from operations was $20 million for the fourth quarter of ’25 as compared to $15.5 million in ’24. Adjusted income from operations for the fourth quarter of ’25 was $26.4 million compared to $20.2 million in 2024.

Speaker #1: Adjusted EBITDA for the full year '25 was 50.8 million. Adjusted net income, adjusted income from operations, and adjusted EBITDA are non-gap measures which are reconciled to our gap financial measures in the earnings release.

Laurence Winoker: Adjusted net income, adjusted income from operations, and adjusted EBITDA are non-GAAP measures, which are reconciled to our GAAP financial measures in the earnings release. The following comments are for Q4 of 2025 and 2024, unless stated otherwise. Consolidated sales decreased 5.2% to $204.1 million. US segment sales decreased 5.5% to $185.3 million. Sales were favorably impacted by the increase in selling prices to mitigate the impact of higher tariffs on foreign sourced products. However, retailers buying disruption and consumers dampened spending reaction to the high tariff environment dampened demand in our industry. Within this segment, product lines decreases were in kitchenware and home solutions, partially offset by an increase in tableware.

Speaker #1: The following comments are for the fourth quarter of 2025 and 2024 unless stated otherwise. Consolidated sales decreased 5.2% to $204.1 million. U.S. segment sales decreased 5.5% to $185.3 million.

Speaker #1: Sales were favorably impacted by the increase in selling prices to mitigate the impact of higher tariffs on foreign-sourced products. However, retailer buying disruption and consumers’ dampened spending in reaction to the high tariff environment dampened demand in our industry.

Speaker #1: Within this segment, product lines decreases were in kitchenware and home solutions, partially offset by an increase in tableware. International segment sales decreased 2.3% to 18.8 million.

Laurence Winoker: International segment sales decreased 2.3% to $18.8 million, and excluding the impact of foreign exchange translation, the decrease was $1.4 million, or 6.8%. The decrease came from the UK e-commerce. Gross margin increased to 38.6% from 37.7%. US segment gross margin increased to 38.0% from 37.6%. The improvement was driven by lower ocean freight rates, some favorable product mix, and the timing of inventory costs recognized under FIFO inventory accounting. These factors more than offset the adverse effects of tariffs in the current quarter. The international gross margin decreased to 36.8% from 38.6%, driven by higher customer support spending in the current period. US segment distribution expenses as a percent of goods shipped from its warehouses was 8.3% versus 9.1%.

Speaker #1: And excluding the impact of foreign exchange translation, the decrease was 1.4 million or 6.8%. The decrease came from the UK e-commerce. Gross margin increased to 38.6 from 37.7%.

Speaker #1: US segment gross margin increased to 38.8 from 37.6. The improvement was driven by lower ocean freight rates some favorable product mix and the timing of inventory costs recognized under FIFO inventory accounting.

Speaker #1: These factors more than offset the adverse effects of tariffs in the current quarter. For international gross margin decreased to 36.8 from 38.6 driven by higher customer support spending in the current period.

Speaker #1: US segment distribution expenses as a percent of goods shipped from its warehouses was 8.3% versus 9.1%. The decrease was attributable to improved labor management efficiencies largely resulting from the fully implemented new warehouse management system in our West Coast facility and the effect of higher tariff-induced selling prices without a commensurate increase in expenses.

Laurence Winoker: The decrease was attributable to improved labor management efficiencies, largely resulting from the fully implemented new warehouse management system in our West Coast facility and the effect of higher tariff-induced selling prices without a commensurate increase in expenses. International segment distribution expenses as a percentage of goods shipped from its warehouses was 19.8% versus 18.1%. The increase is due to higher sales to prepaid freight customers and the expansion of sales into the Asia Pacific region. Selling general and administrative expenses decreased by 12%, $38 million. US segment expenses decreased by $3.2 million to $29.6 million. As a percentage of net sales, the expense decreased to 16% from 16.7%. The decrease was driven by lower employee expenses, including incentive compensation. International SG&A decreased $1.5 million to $3.1 million.

Speaker #1: International segment distribution expenses as a percentage of goods shipped from its warehouses was 19.8% versus 18.1%. The increase was due to higher sales to prepaid freight customers and the expansion of sales into the Asia-Pacific region.

Speaker #1: Selling, general, and administrative expenses decreased by 12% to $38 million. U.S. segment expenses decreased by $3.2 million to $29.6 million. As a percentage of net sales, the expense decreased to 16% from 16.7%.

Speaker #1: The decrease was driven by lower employee expenses including incentive compensation. International SG&A decreased 1.5 million to 3.1 million. As a percentage of net sales the expense decreased.

Laurence Winoker: As a percentage of net sales, the expense decreased to 16.7% versus 24.2% due to lower employee and advertising expenses, as well as foreign currency transaction gains. Unallocated corporate expense decreased $500,000 to $5.2 million due to lower employee expenses, also including incentive compensation, partially offset by higher professional fees. Interest expense decreased by $600,000 due to lower average borrowings and lower interest rates on our variable rate debt. For income taxes, the benefit rate is primarily driven by the release of a valuation allowance against deferred tax assets recorded in Q2. Looking at our debt liquidity, our balance sheet continues to be strong, notwithstanding the higher working capital needs that resulted from tariffs.

Speaker #1: To 16.7% versus 24.2% due to lower employee and advertising expenses as well as a foreign currency transaction gains. On allocated corporate expense decreased 500,000 to 5.2 million due to lower employee expenses also including incentive compensation partially offset by higher professional fees.

Speaker #1: Interest expense decreased by 600,000 due to lower average borrowings and lower interest rates on our variable rate debt. For income taxes, the benefit is primarily driven by the release excuse me, the benefit rate is primarily driven by the release of a valuation allowance against deferred tax assets recorded in the second quarter.

Speaker #1: And looking at our debt liquidity, our balance sheet continues to be strong, notwithstanding the higher working capital needs that resulted from tariffs. At year-end, our liquidity was $76.6 million, which includes cash plus availability under our credit facility and receivable purchase agreement.

Laurence Winoker: At year-end, our liquidity was $76.6 million, which includes cash plus availability under our credit facility, and receivable purchase agreement. Our adjusted EBITDA to net debt ratio at year-end was 3.9 times. Lastly, as Rob discussed, the relocation of our East Coast distribution center is expected to begin operating in Q2. I'll add that the cost that is exiting the New Jersey facility and starting up the Maryland facility, including capital expenditures, are expected to be at or below our forecast. This concludes our prepared comments. Operator, please open the line for questions.

Speaker #1: And now adjusted EBITDA to net debt ratio at year-end was 3.9. Times 3.9 times. Lastly, as Rob discussed, the relocation of our East Coast distribution center is expected to be begin operating in the second quarter and I'll add that the costs that is exiting the New Jersey facility and starting up the Maryland facility including capital expenditures are expected to be at or below our forecast.

Speaker #1: This concludes our prepared comments. Operator, please open the line for questions.

Operator 3: Thank you. We will now begin to conduct our question and answer session. If you would like to ask a question, please press Star and One on your telephone keypad. Confirmation tone will indicate that your line is in the question queue. You may press Star and Two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys to ensure the best sound quality. One moment while we pull for questions. Our first question today comes from Matt Koranda from Roth Capital Partners. Please go ahead with your question.

Operator: Thank you. We will now begin to conduct our question and answer session. If you would like to ask a question, please press Star and One on your telephone keypad. Confirmation tone will indicate that your line is in the question queue. You may press Star and Two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys to ensure the best sound quality. One moment while we pull for questions. Our first question today comes from Matt Koranda from Roth Capital Partners. Please go ahead with your question.

Speaker #2: Thank you. We will now begin to conduct our question-and-answer session. If you would like to ask a question, please press star and one on your telephone keypads.

Speaker #2: Confirmation tone will indicate that your line is in the question queue. You may press star and two if you'd like to remove your question from the queue.

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To ensure the best sound quality.

Speaker #2: One moment. While we pull for questions. In our first question today, it comes from Matt Kuranda from Roth Capital. Please go ahead with your question.

Matthew Koranda: Hey, guys. Good morning. I know you don't typically give full year official guidance until Q1, but just wanted to hear a little bit more about building blocks for growth in 2026. I know you said you intend to grow in the year. Maybe you could just talk about some of the puts and takes around the price that you took in 2025 that sort of wraps into 2026, new product launches, existing growth with some of the successful lines like Dolly. I guess some of those are maybe a little bit offset by volume declines more recently, but just how do you think about those factors qualitatively as we kind of think about the forecast for 2026, and any commentary on seasonality this year would be appreciated as well.

Speaker #3: Hey guys, good morning. I know you don't typically give full year official guidance until the first quarter, but just wanted to hear a little bit more about building blocks for growth in '26.

Speaker #3: I know you said you intend to grow in the year. maybe you could just talk about some of the puts and takes around the price that you took in '25 that sort of wraps into '26, new product launches, existing growth with some of the successful lines like Dolly, I guess some of those are maybe a little bit offset by volume declines more recently, but just how do you think about those factors qualitatively as we kind of think about the forecast for '26?

Speaker #3: And any commentary on seasonality this year would be appreciated as well.

Laurence Winoker: Matt, well, from a seasonality, we're expecting more of a normal seasonality. You know, there were disruptions in 2025 that were tariff oriented, which, you know, put a total curve on normal seasonality. I think we don't expect it to not normalize in 2026. You know, some of the things you mentioned, you know, pricing increases, you know, which is kind of a one-time event.

Robert Kay: Matt, well, from a seasonality, we're expecting more of a normal seasonality. You know, there were disruptions in 2025 that were tariff oriented, which, you know, put a total curve on normal seasonality. I think we don't expect it to not normalize in 2026. You know, some of the things you mentioned, you know, pricing increases, you know, which is kind of a one-time event.

Speaker #4: Hey, Matt. Well, from a seasonality perspective, we're expecting more of a normal seasonality. You know, there were disruptions in '25 that were tariff-oriented, which, which, you know, put a total curve on normal seasonality.

Speaker #4: So I think it would we don't expect it to not normalize in '26. you know, some of the things you mentioned, you know, pricing increases, you know, which is kind of a one-time event.

Robert Kay: Happened throughout 2025. The impact of those will be fully felt because they were fully implemented in 2025. You get the full impact of that in 2026, which of course the caveat is, who knows what's gonna happen. From a new product introduction, I think, well, I know that we've been introducing, you know, a much greater amount of new product than a lot of competition, just because times are tough and a lot of people are paring back. A couple of areas, you know, we're seeing good traction. One, we talked about the Dolly brand. That's actually expanding, you know, beyond the dollar channel, where we have firm commitments.

Speaker #4: happened throughout 2025. so the impact of those will be fully felt because they were fully implemented. in '25, so you get the full impact of that in 2026 with, of course, the caveat is what's going to happen.

Speaker #4: From a new product introduction, I think—well, I know that we've been introducing a much greater amount of new product than a lot of competition, just because times are tough and a lot of people are paring back.

Speaker #4: But a couple of areas, you know, we're seeing good traction. One, we talked about, the Dolly brand. That's actually expanding, you know, beyond the dollar channel, where we have firm commitments.

Robert Kay: While we had tremendous growth in 2025, we expect that trajectory to continue in 2026. We see some good growth there. Our food service initiative, that's a business where you have to, you know, build a book of business and then it becomes a bit of an annuity for a period of time. Particularly Mikasa Hospitality has gained a lot of traction. You know, while a small base, we expect substantial increase in those revenues in 2026. The end market in 2025 for food service establishments was very challenged. You saw new store openings decline. You saw store closings throughout a lot of multi-unit franchises and the like. Unknown where that heads in 2026.

Speaker #4: And, while we had tremendous growth in '25, we expect that trajectory to continue in '26. So we see some good growth there. Our food service initiative—that's a business where you have to, you know, build a book of business and then it becomes a bit of an annuity for a period of time.

Speaker #4: And particularly, Makassar Hospitality has gained a lot of traction. So, you know, while it's a small base, we expect a substantial increase in those revenues in '26.

Speaker #4: The end market in '25 for food service establishments was very challenged. You know, so you saw new store openings decline. You saw store closings.

Speaker #4: Throughout, you know, a lot of multi-unit franchises and the like. Unknown where that heads in '26. The industry thinks it'll go up, but nonetheless, we've gained market share and, and not end market driven.

Robert Kay: The industry thinks it'll go up, but nonetheless, we've gained market share and not end market driven. We'll see some nice growth in that area in 2026. Those are some of the key drivers. Hopefully answers gives you some perspective there.

Speaker #4: we'll see some nice growth in that area in 2026. so, so those, those are some, of the key drivers hopefully answers, gives you some perspective on that.

Matthew Koranda: Yeah, that's helpful. Thanks, Rob. We wanted to also hear a little bit about what you're hearing from your large retail customers in terms of willingness to take on inventory. What does sell through look like or POS data that you're seeing in kind of your key SKUs versus sell in, and how are you thinking about that for 2026?

Speaker #3: Yeah, that's helpful. Thanks, Rob. Maybe wanted to also hear a little bit about what you're hearing from your large retail customers in terms of willingness to take on inventory.

Speaker #3: What does sell-through look like or POS data that you're seeing in kind of your key SKUs? versus sell-in and how are you thinking about that for '26?

Robert Kay: We've seen a pretty large divergence from channel to channel, with certain channels performing very strong from a POS perspective, and certain ones being weaker. We saw a continuing trend in Q4 that we've seen over the last couple of years, that there's been an uptick in e-commerce. The holiday season continued the trend that we saw in 2024, where a lot of consumers waited to make their purchases from historical purchase cycles, because they knew they could get delivery rather quickly, and that helped e-com in Q4 and therefore drove full year performance. That trend should continue. There is a high bifurcation.

Speaker #4: so we've seen a pretty large divergence from channel to channel, with certain channels, performing very strong from a POS. perspective. and, and certain ones, being, weaker.

Speaker #4: we saw a continuing trend in the fourth quarter that we've seen over the last couple of years that there's been an uptick in e-commerce.

Speaker #4: So the holiday season continued the trend that we saw in 2024 where a lot of consumers waited to make their purchases. From historical, purchase cycles.

Speaker #4: because they knew they could get delivery rather quickly and that that helped e-com in the fourth quarter and therefore drove full year performance. So that trend should continue.

Speaker #4: But there is a high bifurcation from a perspective of— you see from time to time, particularly with larger retailers, where there's— and we saw some of this in '25.

Robert Kay: From the perspective you see from time to time, particularly with larger retailers, where there's and we saw some of this in 2025, they pull back on safety stock issues. There's a divergence between sell-in and sell-through, and we saw some of that in 2025. We don't expect that to be a major impact in 2026. Part of that is, in some of the more sophisticated people that have done that have pared back a lot, and if they pare back more, they would harm their sell-through, their velocity, which is, obviously, not in their interest to do so. We don't expect that to be a factor in 2026.

Speaker #4: they pull back on safety stock issues. So there's a divergence between sell-in and sell-through. And we saw some of that in '25. We don't expect that to be a major impact in '26.

Speaker #4: And part of that is, some of the more sophisticated people that have done that have pared back a lot. And if they pare back more, they would harm their sell-through, their velocity.

Speaker #4: which is in obviously not in their interest to do so. so we don't expect that to be a factor in '26.

Matthew Koranda: Okay. Very helpful. Then maybe just one more, if I could. The net leverage at the end of the year looks good under 4x. Wanted to just hear how you guys are thinking about cash priorities this year. Obviously, you got a lot of organic growth initiatives in place. You have the European restructuring that's still maybe ongoing or maybe just recently implemented. How do you balance the organic investments that you need to make versus the M&A funnel, versus buying back your stock? Just wanted to hear a little bit about sort of capital allocation decision-making for 2026.

Speaker #3: Okay. Very helpful. And then maybe just one more if I could. The net leverage, at the end of the year looks good under four times.

Speaker #3: wanted to just hear how you guys are thinking about cash priorities this year. Obviously, you got a lot of organic growth initiatives in place.

Speaker #3: but then you have the European restructuring that still may be ongoing or maybe just recently implemented. How do you balance the organic investments that you need to make versus the M&A funnel versus buying back your stock?

Speaker #3: Just wanted to hear a little bit about sort of capital allocation decision-making for '26.

Robert Kay: Yeah, there's actually a lot of internal growth initiatives that we're pursuing. They're not capital intensive, except for the DC, which we've already, you know, there's not too much on the come for that. We also, you know, will get the benefit of the $13 million of government funding, mostly from Maryland, that'll offset. Not really any issue, any constraints there, and plenty of availability. You know, we'll continue, we have no intention to change anything on our dividend policy.

Speaker #4: Yeah, so there are actually a lot of internal growth initiatives that we're pursuing, but they're not capital-intensive except for the DC, which we've already—you know, there's not too much on the come for that.

Speaker #4: and we also will get the benefit of the $13 million of the funding government funding from mostly from Maryland. that'll offset. so not really any issue and constraints there.

Speaker #4: and plenty of availability. from, you know, we'll continue we have no intention to change anything on our dividend. Our dividend policy, we will look to ultimately restructure our debt arrangements because at this point and where we are, in terms of the life of that, we're not in a ability to buy back stock.

Robert Kay: We will look to ultimately restructure our debt arrangements, 'cause at this point where we are in terms of life of that, we're not able to buy back stock, so we're not using cash at this point to do that, because we have agreements with our lenders in place. We'll ultimately restructure that and allow us to do so when we do that. The M&A environment is the strongest I've seen in decades for strategic, because first of all, you know, financials are investing, you know, so our competition for the longest time has been financials at very, very high valuations. Valuations have been down.

Speaker #4: So we're not using cash at this point to do that because we have agreements with our lenders in place. but we'll ultimately restructure that and allow us to do so, when we do that.

Speaker #4: And the M&A environment is the strongest I've seen in decades for strategic, because first of all, you know, financials aren't investing. You know, so our competition for a long time has been financials at very, very high valuations.

Speaker #4: So valuations have been down. You know, but a lot of businesses that are institutionally owned, you know, there's something that needs larger company or infrastructure help.

Robert Kay: You know, a lot of businesses that are institutionally owned, you know, there's something that needs larger company or infrastructure help, you know, like to move product from a China-based system to a distributed geography. You need a lot of infrastructure to do that. Both from a supply chain quality, it takes a lot of effort and work, and with the fluctuations of moving it all over the place, it's a lot of smaller, less capitalized people are having troubles, let alone the systems and everything to deal with the constant pricing fluctuations as tariffs change and evolve. That combination has made it very attractive. We're seeing real deal flow at real valuations that we haven't seen literally in decades. We have some large opportunities we're looking at.

Speaker #4: You know, to move product from a China-based system to a distributed geography, you need a lot of infrastructure to do that. Both from a supply chain quality—it takes a lot of effort and work.

Speaker #4: And with the fluctuations of moving it all over the place, it's a lot of smaller less-capitalized people are having troubles, let alone the systems and everything to deal with the constant pricing fluctuations as tariffs change and evolve.

Speaker #4: so that combination has made it very attractive. So we're seeing real deal flow at real valuations that we haven't seen literally in decades. so, we have some large opportunities we're looking at.

Robert Kay: You don't know if they'll come through, but you know, it's one of the things that we wrote off on a couple of things that we're working. Not wrote off, but you know, expensed in the Q4. Related to that, hopefully we'll see some highly accretive opportunities if we can execute.

Speaker #4: You don't know if they'll come through, but, you know, it's one of the things that we wrote off on a couple of things that we're working—not wrote off, but, you know, expensed in the fourth quarter.

Speaker #4: related to that and hopefully we'll see some highly accretive opportunities if we can execute.

Matthew Koranda: Okay, sounds great. Appreciate all the detail, and I'll turn it over.

Speaker #3: Okay, sounds great. I appreciate all the detail, and I'll turn it over.

Operator 3: Our next question comes from Brian McNamara from Canaccord Genuity. Please go ahead with your question.

Operator: Our next question comes from Brian McNamara from Canaccord Genuity. Please go ahead with your question.

Speaker #1: Our next question comes from Brian McNamara from Canaccord Genuity. Please go ahead with your question.

Brian McNamara: Hey, good morning, guys. Thanks for taking the questions. This was your best Q4 EBITDA margin that we can recall with sales down even better than 2020 and 2021 when sales were up. Gross margins were nicely up, presumably from the benefit of tariff pricing. I'm curious what drove SG&A lower and how sustainable that is.

Speaker #5: Hey, good morning, guys. Thanks for taking the questions. so this was your best, Q4 EBITDA margin that we can recall with sales down even better than 2020 and 2021 when sales were up.

Speaker #5: So gross margins were nicely up, presumably from the benefit of tariff pricing. But I'm curious what drove SG&A lower and how sustainable that is.

Robert Kay: Yeah, it's a great question, Brian, and hi. It's sustainable. You know, it's all a function of how fast we wanna grow. You know, if we have opportunities and there's a good return on that, you know, we can increase investment, you know, which would increase, you know, infrastructure and SG&A, but with a return. In the current state of the business with what we have on the plate, including the growth we intend for 2026, there's not a need for investing in SG&A. We'll also see the further benefits one way or the other with our international operations, which will continue to benefit those lineups.

Speaker #4: Yeah, it's a great question, Brian. And hi. So, it's sustainable. You know, it's all a function of how fast we want to grow.

Speaker #4: and, you know, if we have opportunities and there's a good return on that, you know, we can increase investment, you know, which would increase infrastructure and SG&A.

Speaker #4: But with a return. so in the current state of the business with what we have on the plate, including the growth we intend for 2026, there's not, a need for, investing in SG&A.

Speaker #4: We'll also see the further benefits one way or the other with our international operations, which will continue to benefit those line items.

Brian McNamara: Great. Next, I'm curious.

Speaker #1: Great.

Laurence Winoker: Brian, let me just

Speaker #2: And Brian, just Brian, let me just.

Laurence Winoker: Brian, let me just-

Brian McNamara: Sorry.

Robert Kay: Larry's gonna give you something.

Speaker #4: Larry's going to give me something on the US gross margins, the comment I made about the FIFO inventory. So, you know, we had talked about how we were increasing our sales price to offset the to offset the tariff, which should have a negative effect on the gross margin percentage, neutral to dollars.

Laurence Winoker: On the US gross margins, the comment made about the FIFO inventory. You know, we had talked about how we were increasing our sales price to offset the tariff, which should have a negative effect on the gross margin percentage, neutral to dollars, because we still have some pre-tariff inventory, we're seeing some benefit there. You know, that's not gonna continue, right? As that rolls off, it'll come back a bit. Yeah.

Speaker #4: But because we are we still have some pre-tariffed inventory, we're seeing some benefit there. But, you know, that's not going to continue, right? As that rolls off, it'll come back a bit.

Speaker #4: So, yeah. I just wanted to, I guess.

Robert Kay: Right.

Laurence Winoker: Just wanted to, I guess.

Robert Kay: I'm sorry to belabor, but as you know, Brian, you've seen us for a little bit, you know, in any given particular quarter or reporting period, you know, you're gonna get margin fluctuations based upon mix, channel mix particularly, but also product.

Speaker #5: And sorry to belabor, but as you know, Brian, you've seen us for a little bit, is, you know, in any given particularly quarter reporting period, you know, you're going to get margin fluctuations based upon mixed channel mix, particularly, but also product.

Brian McNamara: Understood. Next, I'm curious which of your brands saw sales increases in 2025, outside of Dolly, as in overall sales declined for a fourth straight year. What gives you guys confidence that the top line will inflect this year?

Speaker #5: Understood. So next, I'm curious, which of your brands saw sales increases in 2025 outside of Dolly as, you know, overall sales decline for a fourth straight year?

Speaker #5: What gives you guys confidence that the top line inflects this year?

Robert Kay: The main confidence that we see there is the disruptions that we saw in 2026. Again, in Q4, we got some rebound of things that didn't ship from Q2 and Q3, but we'll have a much more normalization, you know, in a lot of the core business in 2026 because we didn't, you know, some of that did not come back in 2025, will in 2026. That's gonna be a natural driver for our business. We talked about Dolly will continue to grow. We're seeing good traction there. You know, in cutlery, we've had a tremendous run for a few years, and a lot of that is new product implementation. Our build-to-order line, you know, went from nothing and created a whole marketplace.

Speaker #4: the main confidence that we see there is the disruptions that we saw in '26. And again, in the fourth quarter, we got some rebound of things that didn't ship from Q2 and Q3, but we'll have a much more normalization in a lot of the core business in 2026 because we didn't some of that did not come back in '25.

Speaker #4: We'll in '26, so that's going to be a natural driver for our business. We talked about Dolly will continue to grow. We're seeing good traction there.

Speaker #4: You know, in Cutlery, we've had tremendous run for a few years. And a lot of that is new product implementation or build the board line, you know, went from nothing, you know, created a whole marketplace.

Robert Kay: The growth trajectory of that piece of cutlery will not continue from a, you know, the trajectory of growth, but we established a new business, you know, it will maintain. There are some other things in that line that we're introducing that, you know, hopefully will produce some good growth. There are some things we haven't disclosed that are new, that get us into a new space, total internal investment, that hopefully will hit 26. If not, we'll hit 27. Unfortunately, we can't disclose that at this moment, but there are some things that are total organic internal initiatives that are completely new that hopefully will drive some nice growth for us.

Speaker #4: The growth trajectory of that piece of Cutlery will not continue from a, you know, the trajectory of growth, but we established a new business, you know, it will maintain.

Speaker #4: And there were some other things in that line that are introducing, that, you know, hopefully will produce some good growth. There are some things we haven't disclosed that are new, that get us into new space totally, or internal investment.

Speaker #4: That hopefully will hit '26. It will not, if not, will hit '27. But unfortunately, we can't disclose that at this moment, but there are some things that are total organic internal initiatives that are completely new that hopefully will drive some nice growth for us.

Brian McNamara: Great. Just on the brand growth for the year, any brands perform better than the company average?

Speaker #5: Great. And on the brand growth for the year, any brands perform better than the company average?

Robert Kay: Yeah. I mean, Taylor had a phenomenal year. You know, Taylor's a great business. You know, from the retailers to our customers' perspective, it's very attractive to them because what they track GMROI as a key metric, which is the velocity, and the margins that they make, it's very profitable for them. It's very good. It had a very good year across the board, in 2025. You know, again, you know, that trajectory will not continue in 2026, but we had a banner year, and that continues to do well. Farberware, you know, across different things, you know, very strong. Farberware's, you know, our growth engine. You know, KitchenAid, we lost some share a couple of years ago, at Walmart. That has run through our numbers.

Speaker #4: Yeah, so, I mean, Taylor had a phenomenal year. You know, Taylor is a great business. You know, from the retailers through our customers' perspective, it's very attractive to them because what they track, Gimory, as a key metric, which is the velocity and the margins that they make.

Speaker #4: It's very profitable for them. It's very good. And it had a very good year across the board in '25. You know, again, you know, that trajectory will not continue in '26, but we had a banner year and that continues to do well.

Speaker #4: Farberware, you know, across different things, you know, very strong. And Farberware's our growth engine. You know, KitchenAid, we lost some share a couple of years ago.

Speaker #4: At Walmart, that has run through our numbers. We still have some of that that will hit us in '25. You know, so that's actually the opportunities.

Robert Kay: We still have some of that that hit us in 2025, you know, so that's actually the opportunities. We relaunched the kitchen tool piece of that with a new line that's getting tremendous traction. We also introduced just recently for 2026 a KitchenAid storage product, which we think is beautiful but is getting more importantly acceptance in the marketplace. That not in 2025, but 2026 is looking pretty good, KitchenAid.

Speaker #4: And we relaunched the kitchen tool piece of that with a new line that's getting tremendous traction. And we also introduced just recently for '26 a KitchenAid storage product, which we think is beautiful.

Speaker #4: But it's getting more importantly acceptance in the marketplace. So that not in '25, but '26 is looking pretty good. KitchenAid.

Brian McNamara: Great. You mentioned the Dolly brand, obviously sales up really nicely, up 150% for the year. How big is that now, and what is your expectation for sales growth contribution or shipments in 2026?

Speaker #5: Great. And you mentioned the Dolly brand. Obviously, sales up really nicely, up 150% for the year. How big is that now? And what is your expectation for sales growth contribution or shipments in 2026?

Robert Kay: you know, 2024, we started that program. It was a small base, right? You know, part of that 150% was off a small base. We shipped $18 million in 2025. We will have substantial growth in 2026 as well.

Speaker #4: So, you know, '24, we started that program. It was a small base, right? You know, so part of that 150% was off a small base.

Speaker #4: We shipped 18. Million in '25. We will have substantial growth in '26 as well.

Brian McNamara: Got it. Okay. Finally, obviously topical, given the war in Iran at the moment. Can you remind us how you're positioned on freight in terms of spot versus contract, your cost exposure to oil and resin, and anything else we should be mindful of there?

Speaker #5: Got it. Okay. And then finally, obviously, topical, given the war in Iran at the moment, can you remind us how you're positioned on freight in terms of spot versus contract?

Speaker #5: Your cost exposure to oil and resin and anything else we should be mindful of there?

Robert Kay: Yeah. So many like questions that I take an hour to answer. So from a couple of things in Iran, one is what we're seeing is container rates are starting to go up, and we'll probably start to experience that. We have very attractive long-term contracts in for freight, but the reality of what happens in very high escalating periods is the shippers start to ignore those, to be honest. You know, so long-term contracts are a benefit, you know, but sometimes, you know, there's only so much that you can benefit. You'll get some of it, but not all of it in very high inflationary ocean freight environments. We do very little business in the Middle East. We won't get much disruption there.

Speaker #4: Yeah. So, how many questions are there? I think an hour to answer. But so from a couple of things in Iran, one is what we're seeing is container rates are starting to go up.

Speaker #4: And we'll probably start to experience that. We have very attractive long-term contracts in for freight. But the reality of what happens in very high-escalating periods is the shippers start to ignore those.

Speaker #4: To be honest, you know, so long-term contracts are a benefit. You know, but sometimes there's only so much that you can benefit. And you'll get some of it, but not all of it in very high inflationary ocean freight environments.

Speaker #4: We do very little business in the Mideast. We won't get much disruption there. It will get no disruption. We actually have a lot of upside that may not come.

Robert Kay: It will get no disruption. We actually have a lot of upside that may not come on some new business, but either way, it's not material. Our European business is in jeopardy of seeing some supply disruption 'cause, you know, the shipments are coming, you know. It's gonna be longer if they have to go around Africa and the like. We think our inventory levels aren't gonna impact that. From a cost of goods sold perspective, you know, plastics have resins. Resins are impacted by petroleum costs. We have not seen anything. We'll see how that plays out. If you look at it as a total percentage on a bill of material basis, it isn't gonna have a huge impact on us.

Speaker #4: On some new business. But either way, it's not material. Our European business is in jeopardy of seeing some supply disruption because, you know, the shipments are coming, you know, in a different—it's going to be longer if they have to go around Africa and the like.

Speaker #4: But we think our inventory levels aren't going to impact that. And from a cost of goods sold perspective, you know, plastics have resins. Resins are impacted by petroleum costs.

Speaker #4: We have not seen anything we'll see how that plays out. But if you look at it as a total percentage on a bill of material basis, it isn't going to have a huge impact on us.

Brian McNamara: Great. Very helpful. Thanks very much. Pass it on.

Speaker #5: Great. Very helpful. Thanks very much. Pass it on.

Operator 3: Our next question comes from Anthony C. Lebiedzinski from Sidoti & Company. Please go ahead with your question.

Operator: Our next question comes from Anthony Lebiedzinski from Sidoti & Company. Please go ahead with your question.

Speaker #6: And our next question comes from Anthony Lebezinski from Sidonia Company. Please go ahead with your question.

Anthony C. Lebiedzinski: Good morning, and thanks for taking the questions. Certainly nice to see the better than expected results here in Q4. It sounds overall like you guys should be able to maintain your SG&A costs. As far as your distribution costs, those also came down in Q4. How should we be thinking about that line item? I have a couple of other questions as well.

Anthony Lebiedzinski: Good morning, and thanks for taking the questions. Certainly nice to see the better than expected results here in Q4. It sounds overall like you guys should be able to maintain your SG&A costs. As far as your distribution costs, those also came down in Q4. How should we be thinking about that line item? I have a couple of other questions as well.

Speaker #5: Good morning, and thanks for taking the questions. It's certainly nice to see the better-than-expected results here in the fourth quarter. So, it sounds overall like you guys should be able to maintain your SG&A costs.

Speaker #5: As far as your distribution costs, those also came down in the fourth quarter. How should we be thinking about that line item? And then I have a couple of other questions as well.

Robert Kay: On the distribution, you know, and as I noted, our West Coast facility is running very efficiently given the new warehouse management system that's working quite well. And as I noted, as a percentage, because you know, we had selling price increases, but you know, there wasn't any meaningful cost increase. We'll continue to see that expense benefit as a percentage. You know, we think you know there'll be some let's say mild disruption in expenses perhaps when we move into the Maryland facility, but we anticipate those and you know, we've done it many times, these moves. We're putting that new warehouse management system in that facility, so we're anticipating it to run quite well.

Laurence Winoker: On the distribution, you know, and as I noted, our West Coast facility is running very efficiently given the new warehouse management system that's working quite well. And as I noted, as a percentage, because you know, we had selling price increases, but you know, there wasn't any meaningful cost increase. We'll continue to see that expense benefit as a percentage. You know, we think you know there'll be some let's say mild disruption in expenses perhaps when we move into the Maryland facility, but we anticipate those and you know, we've done it many times, these moves. We're putting that new warehouse management system in that facility, so we're anticipating it to run quite well.

Speaker #4: Yeah. On the distribution, you know, as I noted, our West Coast facility is running very efficiently given the new warehouse management system that's working quite well.

Speaker #4: We'll, and as I noted, as an expense, as a percentage, because we had selling price increases but there wasn't any meaningful cost increase, we'll continue to see that expense benefit.

Speaker #4: As a percentage. And we think there'll be some I'd say mild disruption in expenses perhaps when we move into the Maryland facility. But we anticipate those.

Speaker #4: And we've done it many times, these moves. We're going to put in that new warehouse management system in that facility, so we're anticipating it to run quite well.

Robert Kay: On SG&A, this also goes to Brian's question a little bit. You know, the moves we've taken are sustainable. The only thing where you'll see some bounce back in 2026 versus 2025 is, look, you know, from a sort of target and incentive compensation perspective, we paid out hardly any, you know, could be nothing to management. With improved performance in 2026, there will likely be corresponding payment of incentive compensation. You know that. But that's not the bulk of the SG&A cost that was achieved. The cost reduction that was achieved in 2025.

Speaker #5: And on SG&A, this also goes to Brian's question a little bit. You know, the moves we've taken are sustainable. The only thing where you'll see some bounce back in '26 versus '25 is, look, you know, from a sort of target and incentive compensation perspective, we paid out hardly any, you know, particularly nothing to management.

Speaker #5: And with improved performance in 26, there will likely be corresponding payment of incentive compensation. You know, but everything that's not the bulk of the SG&A costs that was achieved.

Robert Kay: Improved performance in 2026, there will likely be corresponding payment of incentive compensation. You know that. But that's not the bulk of the SG&A cost that was achieved. The cost reduction that was achieved in 2025.

Speaker #5: Cost reduction that was achieved in '25. Got it. Okay. Thanks for that. And then in terms of the international segment, Larry, you may have said this, but perhaps I missed it.

Anthony C. Lebiedzinski: Got it. Okay. Thanks for that. You know, in terms of the international segment, Larry, you may have said this, but may perhaps I missed it. In terms of the operating loss for the quarter, for the year, can you provide the comments on that?

Anthony Lebiedzinski: Got it. Okay. Thanks for that. You know, in terms of the international segment, Larry, you may have said this, but may perhaps I missed it. In terms of the operating loss for the quarter, for the year, can you provide the comments on that?

Speaker #5: But in terms of the operating loss for the quarter or for the year, can you provide comments on that?

Laurence Winoker: Yeah. I mean, you know, there was a loss. It wasn't as pronounced as we had in 2024. I mean, as Rob mentioned on his comments, we're not done. You know, the Concord and we'll call it Concord 2.0 continues. There's some other things that we had hoped to achieve, but you know, there's legal and other roadblocks that slowed us down. We're hoping to achieve during 2026.

Speaker #4: Yeah. I mean, you know, there was a loss. It wasn't as pronounced as we had in '24. I mean, as Rob mentioned, on his comments, we're not done.

Speaker #4: You know, the Concord—and we'll call it Concord 2.0—continues. So, and there's some other things that we had hoped to achieve, but, you know, there are legal and other roadblocks that slowed us down.

Speaker #4: We're hoping to achieve this during 2026.

Anthony C. Lebiedzinski: Okay, got it. Just a couple of other things here. As far as, you know, the Q4, you had a tax benefit, which you addressed, Larry. How should we think about the tax rate for 2026? Any sort of commentary there on that?

Anthony Lebiedzinski: Okay, got it. Just a couple of other things here. As far as, you know, the Q4, you had a tax benefit, which you addressed, Larry. How should we think about the tax rate for 2026? Any sort of commentary there on that?

Speaker #5: Okay. Got it. And then just a couple of other things here. So as far as, you know, the fourth quarter, you had a tax benefit, which you addressed, Larry.

Speaker #5: How should we think about the tax rate for '26? Any sort of commentary there on that?

Laurence Winoker: Sure. Yeah, I know it's very hard with our numbers to figure out tax rate. We should be in the high 20% range. That's based on well, I should say we have some unusual occurrence this quarter, more unusual than others. What distorts our provision historically has been the loss internationally, where because of a history of losses, you can't record a tax benefit, and that would distort it. To get the international operations to break even or better, our tax rate should be in the, you know, 27-28%. That's a combination of the US federal rate and state.

Speaker #4: Sure. So yeah, I know it's very hard with our numbers to figure out tax rate. But we should be in the high 20% range.

Speaker #4: And that's based on the thing that well, I should say, we have some usual occurrences this quarter. More usual than others. But with distorts our provision historically has been the loss internationally, where because of a history of losses, you can't record a tax benefit.

Speaker #4: And that would distort it. So, to the extent we get the international operations to break even or better, our tax rate should be in the 27%, 28% range.

Speaker #4: And that's a combination of the US federal rate and state.

Anthony C. Lebiedzinski: Gotcha. Got it. Okay. Lastly, as far as the Maryland distribution center, sounds like it's working very well on track. In terms of thinking about the CapEx for this year, do you guys have a ballpark estimate what that could be?

Anthony Lebiedzinski: Gotcha. Got it. Okay. Lastly, as far as the Maryland distribution center, sounds like it's working very well on track. In terms of thinking about the CapEx for this year, do you guys have a ballpark estimate what that could be?

Speaker #5: Gotcha. Got it. Okay. And then lastly, as far as the Maryland distribution center, sounds like it's very well on track. So in terms of thinking about the CapEx for this year, do you guys have a ballpark estimate what that could be?

Laurence Winoker: Yeah. I said we're anticipating it'd be below budget, but, you know, let's not count it. We're very confident we're gonna achieve the budget. I think we should beat it. For CapEx, I think we had originally forecasted $9 million. It may be perhaps less than that, a little less. Of that, we spent $2 million of it in 2025. You know, let's call it around $7 million in for that, you know, just for that in 2026.

Speaker #4: Yeah, so what I said was we’re anticipating it’ll be below budget, but, you know, let’s not count on it. We’re very confident we’re going to achieve the budget.

Speaker #4: We think we should beat it. So for CapEx, I think we had originally forecasted $9 million. It may be perhaps less than that, a little less.

Speaker #4: And we split up that. We spent a couple of million of it in '25. So, you know, let's call it around $7 million in for that, you know, just for that in '26.

Laurence Winoker: Also bear in mind, there'll be a little offset compared to historically because we won't have the maintenance that we typically have in our New Jersey facility because we are putting in, you know, new racking and other things and, you know, turrets and other things in the Maryland facility. There'll be maybe another million-dollar benefit, you know, against what we would otherwise spend for routine maintenance.

Speaker #4: But also bear in mind, there'll be a little offset compared to historically because we won't have the maintenance that we typically have in our New Jersey facility, because we are putting in new racking and other things, and turrets and other things, in the Maryland facility.

Speaker #4: So there’ll be maybe another million-dollar benefit, you know, against what we would otherwise spend on routine maintenance.

Anthony C. Lebiedzinski: Understood. Well, thank you very much, and best of luck.

Anthony Lebiedzinski: Understood. Well, thank you very much, and best of luck.

Speaker #5: Understood. Well, thank you very much. And best of luck.

Laurence Winoker: Thanks. Thanks, Anthony.

Robert Kay: Thanks.

Laurence Winoker: Thanks, Anthony.

Speaker #4: Thanks. Thanks, Anthony.

Jamie Kirchen: Ladies and gentlemen, in showing no additional questions at this time, I would like to turn the floor back over to management for any closing remarks.

Operator: Ladies and gentlemen, in showing no additional questions at this time, I would like to turn the floor back over to management for any closing remarks.

Speaker #3: And, ladies and gentlemen, seeing no additional questions at this time, I would like to turn the floor back over to management for any closing remarks.

Laurence Winoker: Thanks, Jamie. Thank you everyone for listening, and your interest in Lifetime Brands, and we look forward to further dialogue in the future. Have a great day.

Laurence Winoker: Thank you everyone for listening, and your interest in Lifetime Brands, and we look forward to further dialogue in the future. Have a great day.

Speaker #6: Thanks, Jamie. Thank you, everyone, for listening and for your interest in Lifetime Brands. We look forward to further dialogue in the future. Have a great day.

Jamie Kirchen: With that, everyone, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Operator: With that, everyone, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Speaker #3: And with that, everyone, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Operator 3: Everyone else has left the call.

Q4 2025 Lifetime Brands Inc Earnings Call

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