Lifetime Brands Provides COVID-19 Related Business Update - Seite 2

Cost Reductions

To mitigate the effect of current market conditions, the Company has taken immediate steps to meaningfully reduce non-essential operating costs. In addition, the Company is reducing the compensation on a graduated basis for Lifetime’s senior managers, with CEO Robert Kay and Executive Chairman Jeffrey Siegel voluntarily reducing their base salary by 20%, which will also impact other compensation-related provisions in their employment agreements. The members of the Company’s Board of Directors have each also agreed to reduce the cash portion of their annual compensation by 20%. In addition, Lifetime has furloughed a number of employees in various functions throughout the Company as a precautionary measure in the event of a prolonged economic downturn. While the Company continues to assess this rapidly changing environment, the cost reduction activities are substantial and are expected to shield against prolonged impact from the current crisis.

Solid Liquidity Position

The Company remains well-capitalized as it manages through the impact of the ongoing COVID-19 pandemic, largely due to the operational and restructuring efforts it has undertaken over the past two years and its disciplined approach to capital allocation. Lifetime has a strong portfolio of assets and products in addition to an efficient and robust infrastructure and ample liquidity.  This includes a cash balance in excess of $80 million as of March 31, 2020, which has been supplemented by a drawdown on its line of credit prior to March 31, 2020, such action undertaken solely as a precautionary measure. Notably, the Company’s net debt position was more than $30 million lower at the end of the first quarter compared to year-end 2019. Furthermore, the Company has adequate borrowing capacity on its existing line of credit and no debt maturities on its term loan until 2025. Combined with the cost control actions that have been implemented, Lifetime remains confident in its liquidity position as it actively manages the impact of the ongoing crisis.

Postponement of May Dividend

In addition to the cost reduction actions announced today, the Board of Directors has unanimously elected to push back the timing of its quarterly dividend, originally payable on May 15, 2020 to holders of record as of May 1, 2020, in order to provide additional flexibility until there is greater clarity on the potential impact to Lifetime’s business moving forward. The Company will announce the new record date and payment date before May 1, 2020. Further, as a result of staffing constraints, remote work transitions and other financial reporting considerations, the Company will postpone the filing of its Form 10-Q for the first quarter of fiscal 2020 (the “First Quarter 10-Q”) to allow its finance department sufficient time to fulfill the additional activities and requirements resulting from the recent COVID-19 outbreak. The original filing deadline for the First Quarter 10-Q is May 11, 2020, but the U.S. Securities and Exchange Commission (the “SEC”) has granted an extension to permit companies whose financial reporting is adversely affected by COVID-19 to file within 45 days after the original filing deadline. Lifetime expects to file the First Quarter 10-Q after May 11, 2020, but less than 45 days thereafter. The Company will announce the anticipated filing date on a Current Report on Form 8-K filed with the SEC on or prior to May 11, 2020.