LIFETIME BRANDS INC

Previous wording

•Macroeconomic conditions, including inflationary impacts and disruptions to the global supply chain;

Current wording

•Macroeconomic conditions, including labor disputes, inflationary impacts and disruptions to the global supply chain;

Previous wording

•Geopolitical conditions, including political instability in the U.S. and abroad, war, conflict, unrest and sanctions, including those related to the conflicts in Ukraine, Israel and surrounding areas;

Current wording

•Geopolitical conditions, including political instability in the U.S. and abroad, unrest and sanctions, war, conflict, including the ongoing conflicts between Russia and the Ukraine, conflicts in the Middle East, and increasing tensions between China and Taiwan;

Previous wording

The global economy experienced relatively high inflation throughout 2023. As global inflation levels moderate, the impact of elevated inflation and high interest rates have negatively impacted, and may continue to negatively impact consumer spending and buying patterns in 2024. Shifts in consumer spending and buying patterns may directly impact our retailer ordering patterns, which may adversely impact the Company’s results. In addition, disruptions in the global supply chain due to attacks on commercial vessels in the Red Sea, have and may continue to adversely impact the Company’s results due to supply delays leading to an increase in safety stock levels and an increase in transportation costs. The Company expects continued uncertainty as result of these trends in 2024.

Current wording

The global economy experienced relatively high inflation throughout 2023. As global inflation levels moderate, the impact of elevated inflation and high interest rates have negatively impacted, and may continue to negatively impact consumer spending and buying patterns in 2024. Shifts in consumer spending and buying patterns may directly impact our retailer ordering patterns, which may adversely impact the Company’s results. In addition, disruptions in the global supply chain, including the heightened risks of attacks on commercial vessels in the Red Sea and the potential longshoremen strike in the U.S., have and may continue to adversely impact the Company’s results due to supply delays leading to an increase in safety stock levels and an increase in transportation costs. The Company expects continued uncertainty as result of these trends in 2024.

Previous wording

As of June 30, 2024, the Company owned 24.7% of the outstanding capital stock of Grupo Vasconia S.A.B. (“Vasconia”), an integrated manufacturer of aluminum products and a housewares company in Mexico. Shares of Vasconia’s capital stock are traded on the Bolsa Mexicana de Valores, the Mexican Stock Exchange. The Quotation Key is VASCONI. During the second quarter of 2024, Vasconia’s shareholders’ approved a resolution to a reorganization process in terms of the Law of Commercial Bankruptcy in Mexico and subsequently a bankruptcy suit was filed against Vasconia by one of its largest suppliers. The Company concluded that the recent events constituted a loss of significant influence and resulted in the discontinuation of the

Current wording

As of September 30, 2024, the Company owned 24.7% of the outstanding capital stock of Grupo Vasconia S.A.B. (“Vasconia”), an integrated manufacturer of aluminum products and a housewares company in Mexico. Shares of Vasconia’s capital stock are traded on the Bolsa Mexicana de Valores, the Mexican Stock Exchange. The Quotation Key is VASCONI. During the second quarter of 2024, Vasconia’s shareholders’ approved a resolution to a reorganization process in terms of the Law of Commercial Bankruptcy in Mexico and subsequently a bankruptcy suit was filed against Vasconia by one of its largest suppliers. The Company concluded that the recent events constituted a loss of significant influence and resulted in the

Previous wording

29 - equity method of accounting. The Company will account for its Vasconia investment at fair value in accordance with Accounting Standards Codification (“ASC”)Topic 321: Investments — Equity Securities, with any changes in fair value recorded within income (loss) on equity securities on the consolidated statements of operations. As a result of the loss of significant influence, the accumulated other comprehensive losses previously recognized under the equity method of accounting was reclassified to the carrying value of the Vasconia investment and subsequently resulted in a non-cash loss of $14.2 million to reduce the investment to its fair value. The fair value of the Vasconia investment was not material as of June 30, 2024.

Current wording

30 - discontinuation of the equity method of accounting. The Company accounts for its Vasconia investment at fair value in accordance with Accounting Standards Codification (“ASC”)Topic 321: Investments — Equity Securities, with any changes in fair value recorded within income (loss) on equity securities on the consolidated statements of operations. As a result of the loss of significant influence, the accumulated other comprehensive losses previously recognized under the equity method of accounting were reclassified to the carrying value of the Vasconia investment and subsequently resulted in a non-cash loss of $14.2 million to reduce the investment to its fair value during the three months ended June 30, 2024. The fair value of the Vasconia investment was not material as of September 30, 2024.

Previous wording

Consolidated net sales for the three months ended June 30, 2024 were $141.7 million, representing a decrease of $4.7 million, or 3.2%, as compared to net sales of $146.4 million for the corresponding period in 2023. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2024 average rates to 2023 local currency amounts, consolidated net sales decreased by $4.8 million, or 3.3%, as compared to consolidated net sales in the corresponding period in 2023.

Current wording

Consolidated net sales for the three months ended September 30, 2024 were $183.8 million, representing a decrease of $7.9 million, or 4.1%, as compared to net sales of $191.7 million for the corresponding period in 2023. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2024 average rates to 2023 local currency amounts, consolidated net sales decreased by $8.1 million, or 4.2%, as compared to consolidated net sales in the corresponding period in 2023.

Previous wording

Net sales for the U.S. segment for the three months ended June 30, 2024 were $130.5 million, a decrease of $4.5 million, or 3.3%, as compared to net sales of $135.0 million for the corresponding period in 2023.

Current wording

Net sales for the U.S. segment for the three months ended September 30, 2024 were $170.2 million, a decrease of $9.2 million, or 5.1%, as compared to net sales of $179.4 million for the corresponding period in 2023.

Previous wording

Net sales for the U.S. segment’s Kitchenware product category were $80.8 million for the three months ended June 30, 2024, a decrease of $3.2 million, or 3.8%, as compared to $84.0 million for the corresponding period in 2023. The decrease was driven by a reduction in sales for kitchen tools and gadgets and kitchen measurement products. This was partially offset by higher sales for bakeware products driven by sales of a new licensed product brand.

Current wording

Net sales for the U.S. segment’s Kitchenware product category were $97.3 million for the three months ended September 30, 2024, a decrease of $0.4 million, or 0.4%, as compared to $97.7 million for the corresponding period in 2023. The decrease was driven by a reduction in sales for kitchen tools and gadgets, partially offset by higher sales for bakeware and cutlery and boards.

Previous wording

Net sales for the U.S. segment’s Tableware product category were $26.3 million for the three months ended June 30, 2024, an increase of $0.2 million, or 0.8%, as compared to $26.1 million for the corresponding period in 2023. The increase was attributable to higher dinnerware sales due to a new warehouse club program introduced in 2024.

Current wording

Net sales for the U.S. segment’s Tableware product category were $40.9 million for the three months ended September 30, 2024, a decrease of $8.0 million, or 16.4%, as compared to $48.9 million for the corresponding period in 2023. The decrease was attributable to lower dinnerware sales due to the timing of warehouse club programs in 2024 compared to the prior period and lower sales to brick-and-mortar customers.

Previous wording

Net sales for the U.S. segment’s Home Solutions product category were $44.6 million for the six months ended June 30, 2024, a decrease of $4.1 million, or 8.4%, as compared to $48.7 million for the corresponding period in 2023. The decrease was attributable to lower sales of hydration products and decreased sales of Taylor branded bath measurement products. The decrease was partially offset by higher sales for Home Décor products driven by sales of a new licensed product brand.

Current wording

Net sales for the U.S. segment’s Home Solutions product category were $32.0 million for the three months ended September 30, 2024, a decrease of $0.8 million, or 2.4%, as compared to $32.8 million for the corresponding period in 2023. The decrease was attributable to lower sales of hydration products and Taylor branded bath measurement products. The decrease was partially offset by higher sales for Home Décor products driven by sales for a new warehouse club program introduced in 2024.

Previous wording

Gross margin for the U.S. segment was $50.5 million, or 38.7%, for the three months ended June 30, 2024, as compared to $51.7 million, or 38.3%, for the corresponding period in 2023. The increase in the gross margin percentage was driven by favorable product mix.

Current wording

Gross margin for the U.S. segment was $62.7 million, or 36.8%, for the three months ended September 30, 2024, as compared to $67.0 million, or 37.3%, for the corresponding period in 2023. The decrease in the gross margin percentage was driven by product mix.

Previous wording

Gross margin for the International segment was $4.1 million, or 36.6%, for the three months ended June 30, 2024, as compared to $4.3 million, or 37.7%, for the corresponding period in 2023. The decrease in the gross margin percentage was driven by customer mix.

Current wording

Gross margin for the International segment was $4.7 million, or 34.6%, for the three months ended September 30, 2024, as compared to $4.0 million, or 32.5%, for the corresponding period in 2023. The increase in the gross margin percentage was driven by customer and product mix.

Previous wording

Distribution expenses for the three months ended June 30, 2024 were $15.1 million, as compared to $15.7 million for the corresponding period in 2023. Distribution expenses as a percentage of net sales were 10.6% for the three months ended June 30, 2024, as compared to 10.7% for the three months ended June 30, 2023.

Current wording

Distribution expenses for the three months ended September 30, 2024 were $20.0 million, as compared to $17.1 million for the corresponding period in 2023. Distribution expenses as a percentage of net sales were 10.9% for the three months ended September 30, 2024, as compared to 8.9% for the three months ended September 30, 2023.

Previous wording

Distribution expenses as a percentage of net sales for the U.S. segment were 9.1% and 9.3% for the three months ended June 30, 2024 and 2023, respectively. Distribution expense during the three months ended June 30, 2023 included $0.1 million for redesign costs related to upgrading the Company's U.S. warehouse management system. As a percentage of sales shipped from the Company’s U.S. warehouses, excluding non-recurring expenses, distribution expenses were 9.5% and 9.7% for the

Current wording

Distribution expenses as a percentage of net sales for the U.S. segment were 9.7% and 7.8% for the three months ended September 30, 2024 and 2023, respectively. Distribution expense during the three months ended September 30, 2024 and 2023 included $0.6 million and $0.2 million, respectively, for redesign costs related to the Company’s warehouse. As a percentage of sales shipped from the Company’s U.S. warehouses, excluding non-recurring expenses, distribution expenses were 10.1% and 9.1% for the three months ended September 30, 2024 and 2023, respectively. The increase in expenses as a percentage of sales

Previous wording

Distribution expenses as a percentage of net sales for the International segment were 28.5% for the three months ended June 30, 2024, compared to 27.7% for the corresponding period in 2023. As a percentage of sales shipped from the Company’s international warehouses distribution expenses were 25.1% for the three months ended June 30, 2024 and 2023. The increase in expenses as a percentage of net sales was primarily attributed to lower sales, partially offset by lower freight out expense rates.

Current wording

Distribution expenses as a percentage of net sales for the International segment were 25.4% for the three months ended September 30, 2024, compared to 26.1% for the corresponding period in 2023. As a percentage of sales shipped from the Company’s international warehouses distribution expenses were 24.2% and 22.4% for the three months ended September 30, 2024 and 2023, respectively. The decrease in expenses as a percentage of net sales was primarily attributed to higher sales, partially offset by higher expenses for the distribution of the Company's products within its global trading business in Asia.

Previous wording

Selling, general and administrative expenses for the U.S. segment were $29.4 million for the three months ended June 30, 2024, as compared to $27.4 million for the corresponding period in 2023. As a percentage of net sales, selling, general and administrative expenses were 22.5% and 20.3% for the three months ended June 30, 2024 and 2023, respectively. The increase in expenses was attributable to higher employee expenses, including incentive compensation, expenses related to the start-up of the Company's manufacturing operations in Mexico, and inflationary increases across several expense categories. This was partially offset by a decrease in the provision for doubtful accounts in the current period.

Current wording

Selling, general and administrative expenses for the U.S. segment were $30.0 million for the three months ended September 30, 2024, as compared to $31.6 million for the corresponding period in 2023. As a percentage of net sales, selling, general and administrative expenses were 17.6% for both the three months ended September 30, 2024 and 2023. The decrease in expenses was attributable to lower employee expenses, primarily due to lower incentive compensation, and a decrease in the provision for doubtful accounts in the current period. This was partially offset by inflationary increases across several expense categories.

Previous wording

Unallocated corporate expenses for the three months ended June 30, 2024 were $5.1 million, as compared to $4.5 million for the corresponding period in 2023. The current period increase was driven by higher incentive compensation, legal expenses and professional fees.

Current wording

Unallocated corporate expenses for the three months ended September 30, 2024 were $4.3 million, as compared to $4.9 million for the corresponding period in 2023. The current period decrease was driven by lower incentive compensation, partially offset by higher legal expenses and professional fees.

Previous wording

Interest expense was $5.2 million and $5.5 million for the three months ended June 30, 2024 and 2023, respectively. The decrease in expense was a result of lower average outstanding borrowings, partially offset by higher interest rates on outstanding borrowings.

Current wording

Interest expense was $5.8 million and $5.2 million for the three months ended September 30, 2024 and 2023, respectively. The increase in expense was a result of higher interest rates on outstanding borrowings, partially offset by lower average outstanding borrowings in the current period.

Previous wording

Mark to market (loss) gain on interest rate derivatives

Current wording

Mark to market loss on interest rate derivatives

Previous wording

Mark to market loss on interest rate derivatives was $0.1 million for the three months ended June 30, 2024, as compared to a mark to market gain on interest rate derivatives of $0.2 million for the three months ended June 30, 2023. The loss and gain recognized for the three months ended June 30, 2024 and 2023, respectively, was attributable to the change in the fair value due to the change in the projected interest rate environment. The mark to market amount represents the change in fair value on the Company’s interest rate derivatives that have not been designated as hedging instruments. These derivatives were entered into for purposes of locking-in a fixed interest rate on a portion of the Company’s variable interest rate debt. As of June 30, 2024, the intent of the Company is to hold these derivative contracts until their maturity.

Current wording

Mark to market loss on interest rate derivatives was $0.9 million for the three months ended September 30, 2024, as compared to a mark to market loss on interest rate derivatives of $0.1 million for the three months ended September 30, 2023. The loss recognized for the three months ended September 30, 2024 and 2023, respectively, was attributable to the change in the fair value due to the change in the projected interest rate environment. The mark to market amount represents the change in fair value on the Company’s interest rate derivatives that have not been designated as hedging instruments. These derivatives were entered into for purposes of locking-in a fixed interest rate on a portion of the Company’s variable interest rate debt. As of September 30, 2024, the intent of the Company is to hold these derivative contracts until their maturity.

Previous wording

Income tax benefit of $0.1 million and income tax provision of $1.2 million for the three months ended June 30, 2024 and 2023, respectively, represent taxes on both U.S. and foreign earnings at a combined effective income tax benefit rate of 0.3% and provision rate of 212.3%, respectively. The effective tax rate for the three months ended June 30, 2024 differs from the federal statutory income tax rate of 21.0% primarily due to the expiration of non-qualified stock options and the vesting of equity-based awards, where the book expense exceeded the tax deduction upon vesting, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance. The effective tax rate for the three months ended June 30, 2023 differs from the federal statutory income tax rate of 21.0% primarily due to state and local tax expense, the impact of non-deductible expenses, and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance, partially offset by a benefit for federal credits.

Current wording

Income tax provision of $1.5 million and $3.0 million for the three months ended September 30, 2024 and 2023, respectively, represent taxes on both U.S. and foreign earnings at a combined effective income tax provision rate of 81.4% and 36.5%, respectively. The effective tax rate for the three months ended September 30, 2024 and 2023 differs from the federal statutory income tax rate of 21.0% primarily due to foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

Previous wording

Equity in losses of Vasconia, net of taxes, was $5.9 million for the three months ended June 30, 2023. Equity in losses included a non-cash impairment charge of $4.4 million, to reduce the carrying value of the Company’s equity method investment in Vasconia to its fair value.

Current wording

Equity in losses of Vasconia, net of taxes, was $1.0 million for the three months ended September 30, 2023. Equity in losses included a non-cash impairment charge of $0.3 million, to reduce the carrying value of the Company’s equity method investment in Vasconia to its fair value.

Previous wording

Consolidated net sales for the six months ended June 30, 2024 were $283.9 million, a decrease of $8.0 million, or 2.7%, as compared to net sales of $291.9 million for the corresponding period in 2023. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2024 average rates to 2023 local currency amounts, consolidated net sales decreased by $8.4 million, or 2.9%, as compared to consolidated net sales in the corresponding period in 2023.

Current wording

Consolidated net sales for the nine months ended September 30, 2024 were $467.7 million, a decrease of $15.8 million, or 3.3%, as compared to net sales of $483.5 million for the corresponding period in 2023. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations and was determined by applying 2024 average rates to 2023 local currency amounts, consolidated net sales decreased by $16.5 million, or 3.4%, as compared to consolidated net sales in the corresponding period in 2023.

Previous wording

Net sales for the U.S. segment for the six months ended June 30, 2024 were $261.0 million, a decrease of $7.5 million, or 2.8%, as compared to net sales of $268.5 million for the corresponding period in 2023.

Current wording

Net sales for the U.S. segment for the nine months ended September 30, 2024 were $431.2 million, a decrease of $16.7 million, or 3.7%, as compared to net sales of $447.9 million for the corresponding period in 2023.

Previous wording

Net sales for the U.S. segment’s Kitchenware product category were $164.3 million for the six months ended June 30, 2024, a decrease of $5.4 million, or 3.2%, as compared to $169.7 million for the corresponding period in 2023. The decrease was mainly driven by lower consumer demand for kitchen tools and gadgets and barware products, partially offset by higher sales for cutlery & boards and bakeware products.

Current wording

Net sales for the U.S. segment’s Kitchenware product category were $261.7 million for the nine months ended September 30, 2024, a decrease of $5.7 million, or 2.1%, as compared to $267.4 million for the corresponding period in 2023. The decrease was mainly driven by lower consumer demand for kitchen tools and gadgets, kitchen measurement and barware products, partially offset by higher sales for bakeware and cutlery and boards products.

Previous wording

Net sales for the U.S. segment’s Home Solutions product category were $23.4 million for the three months ended June 30, 2024, a decrease of $1.5 million, or 6.0%, as compared to $24.9 million for the corresponding period in 2023. The decrease was attributable to lower sales of hydration products and decreased sales of Taylor branded bath measurement products. The decrease was partially offset by higher sales for Home Décor products driven by sales of a new licensed product brand.

Current wording

Net sales for the U.S. segment’s Home Solutions product category were $76.5 million for the nine months ended September 30, 2024, a decrease of $5.0 million, or 6.1%, as compared to $81.5 million for the corresponding period in 2023. The decrease was attributable to lower sales of hydration products and decreased sales of Taylor branded bath measurement products. The decrease was partially offset by higher sales for Home Décor products driven by a new warehouse club program in 2024 and sales of a new licensed product brand.

Previous wording

Net sales for the International segment were $11.2 million for the three months ended June 30, 2024, a decrease of $0.2 million, or 1.8%, as compared to net sales of $11.4 million for the corresponding period in 2023. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations, net sales decreased $0.3 million, or 2.8%, as compared to consolidated net sales in the corresponding period in 2023. The decrease was attributable to lower replenishment orders for e-commerce and brick-and-mortar customers, partially offset by higher sales in Australia for the Company's global trading business in Asia.

Current wording

Net sales for the International segment were $36.5 million for the nine months ended September 30, 2024, an increase of $0.9 million, or 2.5%, as compared to net sales of $35.6 million for the corresponding period in 2023. In constant currency, a non-GAAP financial measure, which excludes the impact of foreign exchange fluctuations, net sales stayed flat, as compared to consolidated net sales in the corresponding period in 2023. The increase was attributable to higher sales in Australia for the Company's global trading business in Asia and sales in continental Europe, partially offset by lower replenishment orders for e-commerce.

Previous wording

Gross margin for the U.S. segment was $103.8 million, or 39.8%, for the six months ended June 30, 2024, as compared to $100.6 million, or 37.5%, for the corresponding period in 2023. The improvement in gross margin percentage was due to lower inbound freight costs and product mix.

Current wording

Gross margin for the U.S. segment was $166.5 million, or 38.6%, for the nine months ended September 30, 2024, as compared to $167.6 million, or 37.4%, for the corresponding period in 2023. The improvement in gross margin percentage was due to lower inbound freight costs and product mix.

Previous wording

Gross margin for the International segment was $8.3 million, or 36.2%, for the six months ended June 30, 2024, as compared to $9.2 million, or 39.3%, for the corresponding period in 2023. The decrease in gross margin was driven by lower sales. The decrease in gross margin percentage was driven by higher product costs due to unfavorable fluctuations in foreign currency exchange rates.

Current wording

Gross margin for the International segment was $13.0 million, or 35.6%, for the nine months ended September 30, 2024, as compared to $13.2 million, or 37.1%, for the corresponding period in 2023. The decrease in gross margin percentage was driven by higher product costs due to unfavorable fluctuations in foreign currency exchange rates.

Previous wording

Distribution expenses for the six months ended June 30, 2024 were $31.2 million, as compared to $32.6 million for the corresponding period in 2023. Distribution expenses as a percentage of net sales were 11.0% for the six months ended June 30, 2024, as compared to 11.2% for the six months ended June 30, 2023.

Current wording

Distribution expenses for the nine months ended September 30, 2024 were $51.3 million, as compared to $49.7 million for the corresponding period in 2023. Distribution expenses as a percentage of net sales were 11.0% for the nine months ended September 30, 2024, as compared to 10.3% for the nine months ended September 30, 2023.

Previous wording

Distribution expenses as a percentage of net sales for the U.S. segment were 9.5% and 9.7% for the six months ended June 30, 2024 and 2023, respectively. Distribution expenses during the six months ended June 30, 2024 and 2023 include $0.1 million and $0.4 million, respectively, for redesign costs related to upgrading the Company's U.S. warehouse management system. As a percentage of sales shipped from the Company’s U.S. warehouses, excluding non-recurring expenses, distribution expenses were 10.0% and for the six months ended June 30, 2024 and 2023. The decrease in expenses as a percentage of net sales was a result of improved labor management efficiencies resulting in a decrease of employee expenses, lower storage expenses from lower inventory levels, and lower pallet expenses, partially offset by higher labor rates and software maintenance expenses.

Current wording

34 - percentage of sales shipped from the Company’s U.S. warehouses, excluding non-recurring expenses, distribution expenses were 10.0% and 9.7% for the nine months ended September 30, 2024 and 2023, respectively. The increase in expenses as a percentage of net sales was a result of higher depreciation expense due to changes in asset retirement obligation estimates, higher labor rates, and higher software expenses due to the launch of a new warehouse management system at the Company's west coast distribution center. These increases were partially offset by lower storage expenses, improved labor management efficiencies resulting in a decrease of employee expenses, and lower pallet expenses.

Previous wording

Distribution expenses as a percentage of net sales for the International segment were 27.7% for the six months ended June 30, 2024, compared to 27.6% for the corresponding period in 2023. As a percentage of sales shipped from the Company’s international warehouse, distribution expenses were 24.3% and 24.5% for the six months ended June 30, 2024 and 2023, respectively. The decrease in expenses as a percentage of sales was a result of lower freight out expenses, partially offset by lower shipment volume.

Current wording

Distribution expenses as a percentage of net sales for the International segment were 26.9% for the nine months ended September 30, 2024, compared to 27.2% for the corresponding period in 2023. As a percentage of sales shipped from the Company’s international warehouse, distribution expenses were 24.3% and 23.8% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in expenses as a percentage of net sales was primarily attributed to lower freight out expenses, higher sales, partially offset by higher expenses for the distribution of the Company's products within its global trading business in Asia.

Previous wording

Selling, general and administrative expenses for the U.S. segment were $60.3 million for the six months ended June 30, 2024, as compared to $56.7 million for the corresponding period in 2023. As a percentage of net sales, selling, general and administrative expenses were 23.1% and 21.1% for the six months ended June 30, 2024 and 2023, respectively. The increase in expenses was attributable to higher employee expenses, including incentive compensation, expenses related to the start-up of the Company's manufacturing operations in Mexico, legal expenses, and inflationary increases across several expense categories. This was partially offset by a decrease in the provision for doubtful accounts in the current period.

Current wording

Selling, general and administrative expenses for the U.S. segment were $90.2 million for the nine months ended September 30, 2024, as compared to $88.3 million for the corresponding period in 2023. As a percentage of net sales, selling, general and administrative expenses were 20.9% and 19.7% for the nine months ended September 30, 2024 and 2023, respectively. The increase in expenses was attributable to higher employee expenses, expenses related to the start-up of the Company’s manufacturing operations in Mexico, legal expenses, and inflationary increases across several expense categories. This was partially offset by a decrease in the provision for doubtful accounts in the current period.

Previous wording

Selling, general and administrative expenses for the International segment were $8.0 million for the six months ended June 30, 2024, as compared to $7.5 million for the corresponding period in 2023. The increase was primarily attributable to higher employee expenses, partially due to unfavorable currency translation.

Current wording

Selling, general and administrative expenses for the International segment were $12.5 million for the nine months ended September 30, 2024, as compared to $11.3 million for the corresponding period in 2023. The increase was primarily attributable to higher employee expenses and penalties related to tax filings incurred in the current period.

Previous wording

For the six months ended June 30, 2023, the Company incurred $0.8 million of unallocated corporate expense related to the termination payment with its Executive Chairman.

Current wording

For the nine months ended September 30, 2023, the Company incurred $0.8 million of unallocated corporate expense related to the termination payment with its Executive Chairman.

Previous wording

Interest expense was $10.8 million and $10.9 million for the six months ended June 30, 2024 and 2023, respectively. The decrease in expense was a result of lower average outstanding borrowings, partially offset by higher interest rates on outstanding borrowings.

Current wording

Interest expense was $16.6 million and $16.1 million for the nine months ended September 30, 2024 and 2023, respectively. The increase in expense was a result of higher interest rates on outstanding borrowings, partially offset by lower average outstanding borrowings in the current period.

Previous wording

Mark to market loss on interest rate derivatives was $0.3 million for the six months ended June 30, 2024, as compared to $0.04 million for the six months ended June 30, 2023. The increase was attributable to the change in the fair value based on the increase in interest rates. The mark to market amount represents the change in fair value on the Company’s interest rate derivatives that have not been designated as hedging instruments. These derivatives were entered into for purposes of locking-in a fixed interest rate on a portion of the Company’s variable interest rate debt. As of June 30, 2024, the intent of the Company is to hold these derivative contracts until their maturity.

Current wording

Mark to market loss on interest rate derivatives was $1.2 million for the nine months ended September 30, 2024, as compared to $0.1 million for the nine months ended September 30, 2023. The increase was attributable to the change in the fair value based on the increase in interest rates. The mark to market amount represents the change in fair value on the Company’s interest rate derivatives that have not been designated as hedging instruments. These derivatives were entered into for purposes of locking-in a fixed interest rate on a portion of the Company’s variable interest rate debt. As of September 30, 2024, the intent of the Company is to hold these derivative contracts until their maturity.

Previous wording

Gain on early retirement of debt was $1.5 million for the three months ended June 30, 2023. The gain recognized for the three months ended June 30, 2023 was attributable to the repurchase of $47.2 million in principal amount of the Term Loan. Refer to NOTE 6 — DEBT for additional information.

Current wording

Gain on extinguishments of debt was $1.5 million for the nine months ended September 30, 2023. The gain recognized for the nine months ended September 30, 2023 was attributable to the repurchase of $47.2 million in principal amount of the Term Loan. Refer to NOTE 6 — DEBT for additional information.

Previous wording

Loss on equity securities was $14.2 million for the three months ended June 30, 2024. In the second quarter of 2024, the Company loss 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 4 —INVESTMENT for additional information.

Current wording

Loss on equity securities was $14.2 million for the nine months ended September 30, 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 4 —INVESTMENT for additional information.

Previous wording

Income tax provision of $0.2 million and income tax benefit of $0.1 million for the six months ended June 30, 2024 and 2023, respectively, represent taxes on both US and foreign earnings at a combined effective income tax provision rate of (0.7)% and an income tax benefit rate of 1.6%, respectively. The negative rate for the six months ended June 30, 2024 reflects tax expense on a pretax financial reporting loss. The effective tax rate for the six months ended June 30, 2024 differs from the federal statutory income tax rate of 21.0% primarily due to foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance. The effective tax rate for the six months ended June 30, 2023 differs from the federal statutory income tax rate of 21.0% primarily due to state and local tax expense and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

Current wording

Income tax provision of $1.7 million and $2.9 million for the nine months ended September 30, 2024 and 2023, respectively, represent taxes on both U.S. and foreign earnings at a combined effective income tax provision rate of (8.2)% and 197.0%, respectively. The negative rate for the nine months ended September 30, 2024 reflects tax expense on a pretax financial reporting loss. The effective tax rate for the nine months ended September 30, 2024 and 2023 differs from the federal statutory income tax rate of 21.0% primarily due to the impact of non-deductible expenses and foreign losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.