0001709164false00017091642023-08-022023-08-02


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 _______________________________________________________________________________________________________________________________________________________________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):August 2, 2023
HAMILTON BEACH BRANDS HOLDING COMPANY
(Exact name of registrant as specified in its charter)
Delaware001-3821431-1236686
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
4421 WATERFRONT DRGLEN ALLENVA23060
(Address of principal executive offices)(Zip code)
(804)273-9777
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, Par Value $0.01 Per ShareHBBNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
☐



Item 2.02 Results of Operations and Financial Condition.
    
On August 2, 2023, Hamilton Beach Brands Holding Company (the “Company”) issued a press release announcing its unaudited financial results for the second quarter ended June 30, 2023. A copy of the Company’s press release is attached hereto as Exhibit 99 and is incorporated herein by reference.

The information set forth in Item 2.02 of this Current Report on Form 8-K and the information attached hereto are being furnished by the Company pursuant to Item 2.02 of Form 8-K, insofar as they disclose historical information regarding the Company’s results of operations.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

As described in Item 2.02 of this Current Report on Form 8-K, the following Exhibit is furnished as part of this Current Report on Form 8-K.
    

(d) Exhibits
99
104Cover Page Interactive Data File (formatted as Inline XBRL)




SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date:
August 2, 2023
HAMILTON BEACH BRANDS HOLDING COMPANY
By:
/s/ Sally M. Cunningham
Name:
Sally M. Cunningham
Title:
Senior Vice President, Chief Financial Officer and Treasurer




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CONTACT:
Lou Anne J. Nabhan
Louanne.nabhan@hamiltonbeach.com

For Immediate Release
Wednesday, August 2, 2023

HAMILTON BEACH BRANDS HOLDING COMPANY
ANNOUNCES SECOND QUARTER 2023 RESULTS

Glen Allen, Virginia - Hamilton Beach Brands Holding Company (NYSE: HBB), which operates through its wholly owned subsidiary Hamilton Beach Brands, Inc., today announced results for the second quarter of 2023.

Highlights of the Second Quarter 2023 Compared to the Second Quarter 2022

6/30/20236/30/2022
(In millions)
Revenue$137.1 $147.5 
Gross profit$27.4 $32.0 
% of revenue20.0 %21.7 %
Operating profit$0.7 $5.4 
% of revenue0.5 %3.7 %
Cash flow from operating and investing activities $55.6 $(26.1)
Net debt$57.8 $126.3 

•Total revenue declined 7.1%, in line with Company expectations and due to softer consumer demand and continued retailer inventory rebalancing early in the quarter
•Operating profit was $0.7 million compared to $5.4 million reflecting gross profit contraction
•Cash flow from operating and investing activities was $55.6 million compared to a use of $26.1 million due to the Company's focus on net working capital improvements
•For the full year 2023, Hamilton Beach Brands continues to expect total revenue to be flat with full- year 2022, driven by second-half and holiday placements and promotions. Full-year 2023 operating profit is expected to increase compared to full-year 2022, excluding last year's $10 million insurance recovery

Results of the Second Quarter 2023 Compared to the Second Quarter 2022
Total revenue was $137.1 million, a 7.1% decrease, compared to $147.5 million, in line with Company expectations. Revenue decreased in the Company's U.S., Latin American and Canadian consumer markets primarily due to lower unit volume, partially offset by increased revenue in the Mexican consumer market. In the U.S., many retail customers managed overall inventory levels conservatively early in the quarter as inflation and high interest rates created uncertainty about consumer demand. In Latin America, retailers continued to rebalance excess inventories created by last year's supply chain disruptions.
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In the Global Commercial market, revenue decreased as demand normalized compared to last year's second quarter, which experienced strong post-pandemic demand in the food service and hospitality industries.
Gross profit was $27.4 million compared to $32.0 million. Gross profit margin contracted by 170 basis points to 20.0% compared to 21.7%, due to unfavorable customer and product mix resulting in lower average margin, the impact of lower volume on fixed cost coverage, and a $0.5 million non-cash lease impairment charge related to the consolidation of warehouses.
Selling, general and administrative expenses were flat year over year at $26.6 million compared to $26.5 million.
Operating profit was $0.7 million compared to operating profit of $5.4 million.
Interest expense, net decreased to $0.8 million compared to $0.9 million, primarily due to decreased average borrowings outstanding under the Company's revolving credit facility partially offset by higher interest rates.
Net income was $0.1 million, or $0.01 per diluted share, compared to net income of $5.1 million, or $0.36 per diluted share.

Cash Flow and Debt    
For the six months ended June 30, 2023, net cash provided by operating activities was $57.3 million compared to cash used for operating activities of $25.5 million in the prior year, primarily due to the Company's focus on net working capital improvement. Net working capital provided cash of $69.0 million in 2023 compared to a use of cash of $36.1 million in 2022. Trade receivables provided net cash of $26.4 million during 2023 compared to $19.8 million provided in the prior year due to collection initiatives that resulted in improvements to days sales outstanding. The Company took significant actions to reduce inventory and increase accounts payable. Net cash provided by inventory was $20.4 million in 2023 compared to $45.7 million used in 2022. Net cash provided by accounts payable was $22.2 million in 2023 compared to $10.3 million used in 2022.
The Company allocated its strong cash flow primarily to reduce debt and return value to shareholders through the quarterly dividend and repurchase of stock. On June 30, 2023, net debt, or debt minus cash and cash equivalents, was $57.8 million compared to $126.3 million on June 30, 2022. During the three months ended June 30, 2023, the Company paid $1.5 million in regular cash dividends and repurchased 56,973 shares at prevailing market prices for an aggregate purchase price of $0.6 million.

Outlook
For the full year 2023, the Company continues to expect total revenue to be flat with full year 2022. An increase in revenue for the second half of 2023 is expected to offset the decrease in revenue for the first half of 2023. The Company is pleased with the incremental placements and promotions it has secured for the second half of 2023 and the holiday-selling season and with gains in consumer market share. Sales of commercial products are expected to increase in 2023 driven by new product launches and new distribution.
Operating profit for the full year 2023 is expected to increase compared to 2022, excluding the $10 million insurance recovery in 2022. Cash flow before financing in 2023 is expected to increase significantly compared to 2022 as a result of improvements in net working capital. The Company's outlook could change if retailer replenishment orders or consumer demand are softer than currently expected.
Over the past two years, the Company has successfully navigated many challenges that were related to the pandemic and supply chain disruptions. Throughout that period, Hamilton Beach Brands continued to invest in the development of innovative products and expand its brand portfolio. In 2023 and beyond, the Company believes it is well positioned to benefit from these investments.
Hamilton Beach Brands is an industry leader with many competitive advantages. Its diversified brand and product portfolio provides numerous offerings to value-tier consumers and includes the opportunity to capture potential trade-down during times of economic downturn. Its premium products also provide exposure to high-income consumers, whose buying patterns are not as influenced by price considerations. The Company expects to benefit from its growing participation in the global commercial market. The Company began to focus on increasing its participation in the large and fast-growing Home Health and Wellness market in 2021 and believes this initiative will begin to have a positive impact on its results in 2023.
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The Company expects continued progress with its strategic initiatives to drive revenue growth, expand operating margin and generate strong cash flow over time. The initiatives are focused on increasing sales of innovative, higher priced, higher margin products in the Company's core North American market. The following is a summary of each initiative.
Drive Core Growth: This initiative is focused on driving the growth of the Company's flagship brands, Hamilton Beach® and Proctor Silex® in its core North American market. Both brands have a long history of consumer trust, based on quality, durability and innovative solutions. New products are supported by digital marketing, social media advertising and influencer marketing. Hamilton Beach® continues to be the #1 small kitchen appliance brand in the U.S. based on units sold.
Gain Share in the Premium Market: The Company continues to develop, license and acquire brands to increase its participation in the premium market. New products and digital marketing support underpin the strategy to grow this business. In March 2023, Hamilton Beach Brands announced an agreement to provide the next generation of specialty appliances for use with Numilk® raw ingredients to create a variety of fresh non-dairy milk products on demand in homes and commercial establishments. The new appliances are expected to launch in early 2024.
Expand in Home Health and Wellness: The Company has taken many steps to introduce new products as it aims to achieve meaningful dollar and share participation in the large and fast-growing home health and wellness market. In the air purifier category, the Company has launched a line of premium True HEPA air purifiers under the licensed CloroxTM brand. In water filtration, the Company has created a new category with an electric countertop model launched under the licensed brand Brita HubTM. In the home medical market, the Company is partnering with HealthBeacon®, a leader in digital technology, to leverage Hamilton Beach Brands strengths in brand equity, sourcing, logistics and new product development to create appliances that help consumers manage their health needs at home.
Lead in the Global Commercial Market: This initiative is focused on securing new business and increasing sales with existing customers that operate in the food service and hospitality industries throughout the world. Continuing to develop products that create a competitive advantage in the Company's core blending and mixing categories, as well as expanding into new categories organically, is the cornerstone of the strategy.
Accelerate Digital Transformation: The Company has a well-developed ecommerce capability and continues its investments to gain share in ecommerce markets for consumer and commercial products. The Company collaborates closely with omni-channel and online-only retail customers to leverage the fast-paced changes in the ecommerce channel and increase awareness and sell-through of its products. The Company focuses on robust digital marketing that includes online product content, search optimization and advertising, attracting favorable reviews and strong star ratings, and social media strategies. The Company's new U.S. distribution center includes a state-of-the art capability to ship small packages directly to consumers in partnership with retail customers.
Leverage Partnerships and Acquisitions: This initiative is focused on identifying and securing businesses with a strategic fit to the Company's portfolio. Hamilton Beach Brands is actively engaged in the pursuit of additional trademark licensing agreements, strategic alliances, and acquisitions to drive growth in all its markets.

Conference Call
The Company will conduct an earnings conference call and webcast on Thursday, August 3, 2023, at 9:30 a.m. Eastern time. The call may be accessed by dialing 888-350-3452 (toll free), International 647-362-9199. Conference ID: 1809480. The conference call will also be webcast live on the Company’s Investor Relations website at www.hamiltonbeachbrands.com. An archive of the webcast will be available on the website.





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About Hamilton Beach Brands Holding Company
Hamilton Beach Brands Holding Company operates through its wholly owned subsidiary Hamilton Beach Brands, Inc., a leading designer, marketer, and distributor of a wide range of branded small electric household and specialty housewares appliances, as well as commercial products for restaurants, fast food chains, bars, and hotels. The Company’s owned consumer brands include Hamilton Beach®, Proctor Silex®, Hamilton Beach Professional®, Weston®, TrueAir®, and Hamilton Beach Health®. The Company’s owned commercial brands include Hamilton Beach Commercial® and Proctor Silex Commercial®. Hamilton Beach Brands licenses the brands for Wolf Gourmet® countertop appliances, CHI® premium garment care products, CloroxTM True HEPA air purifiers, and Brita HubTM countertop electric water filtration appliances. Hamilton Beach Brands has exclusive multiyear agreements to design, sell, market and distribute Bartesian® premium cocktail delivery machines, the Smart Sharps BinTM from Hamilton Beach Health® powered by HealthBeacon®, and specialty appliances to create Numilk® non-dairy fresh milk on demand. For more information about Hamilton Beach Brands Holding Company, visit hamiltonbeachbrands.com.
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Forward-Looking Statements
The statements contained in this news release that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Such risks and uncertainties include, without limitation: (1) the Company’s ability to source and ship products to meet anticipated demand, (2) the Company’s ability to successfully manage constraints throughout the global transportation supply chain, (3) uncertain or unfavorable global economic conditions; (4) changes in the sales prices, product mix or levels of consumer purchases of small electric and specialty housewares appliances, (5) changes in consumer retail and credit markets, including the increasing volume of transactions made through third-party internet sellers, (6) bankruptcy of or loss of major retail customers or suppliers, (7) changes in costs, including transportation costs, of sourced products, (8) delays in delivery of sourced products, (9) changes in or unavailability of quality or cost effective suppliers, (10) exchange rate fluctuations, changes in the import tariffs and monetary policies and other changes in the regulatory climate in the countries in which the Company operates or buys and/or sells products, (11) the impact of tariffs on customer purchasing patterns, (12) product liability, regulatory actions or other litigation, warranty claims or returns of products, (13) customer acceptance of, changes in costs of, or delays in the development of new products, (14) increased competition, including consolidation within the industry, (15) shifts in consumer shopping patterns, gasoline prices, weather conditions, the level of consumer confidence and disposable income as a result of economic conditions, unemployment rates or other events or conditions that may adversely affect the level of customer purchases of the Company's products, (16) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, and (17) other risk factors, including those described in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2022. Furthermore, the future impact of unfavorable economic conditions, including inflation, rising interest rates, availability of capital markets and consumer spending rates remains uncertain. In uncertain economic environments, the Company cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on its business, results of operations, cash flows and financial position.
*****

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HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 THREE MONTHS ENDED
JUNE 30		SIX MONTHS ENDED
JUNE 30
 2023 202220232022
 (In thousands, except per share data)(In thousands, except per share data)
Revenue$137,109 $147,527 $265,361 $293,878 
Cost of sales109,693 115,549 217,035 233,670 
Gross profit27,416 31,978 48,326 60,208 
Selling, general and administrative expenses26,640 26,503 52,559 41,936 
Amortization of intangible assets50 50 100 100 
Operating profit (loss)726 5,425 (4,333)18,172 
Interest expense, net773 867 2,042 1,600 
Other expense (income), net(271)(252)(255)1,214 
Income (loss) before income taxes224 4,810 (6,120)15,358 
Income tax expense (benefit)114 (279)(1,453)3,096 
Net income (loss) $110 $5,089 $(4,667)$12,262 
   
Basic and diluted earnings (loss) per share$0.01 $0.36 $(0.33)$0.87 
Basic weighted average shares outstanding14,081 14,068 14,077 14,065 
Diluted weighted average shares outstanding14,110 14,095 14,077 14,093 

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HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
JUNE 30
2023		DECEMBER 31
2022		JUNE 30
2022
 (In thousands)
Assets  
Current assets
Cash and cash equivalents$2,071 $928 $701 
Trade receivables, net89,898 115,135 99,723 
Inventory137,224 156,038 228,353 
Prepaid expenses and other current assets13,793 12,643 13,105 
Total current assets242,986 284,744 341,882 
Property, plant and equipment, net27,241 27,830 28,680 
Right-of-use lease assets41,546 44,000 45,238 
Goodwill6,253 6,253 6,253 
Other intangible assets, net1,392 1,492 1,592 
Deferred income taxes2,853 3,117 1,364 
Deferred costs14,419 14,348 19,411 
Other non-current assets6,687 7,166 5,509 
Total assets$343,377 $388,950 $449,929 
Liabilities and stockholders' equity  
Current liabilities
Accounts payable$84,098 $61,759 $121,552 
Accrued compensation7,729 11,310 7,376 
Accrued product returns5,605 6,474 5,286 
Lease liabilities6,088 5,875 5,417 
Other current liabilities11,980 16,150 12,249 
Total current liabilities115,500 101,568 151,880 
Revolving credit agreements59,911 110,895 127,003 
Lease liabilities, non-current44,480 46,801 48,641 
Other long-term liabilities5,120 5,152 5,603 
Total liabilities225,011 264,416 333,127 
Stockholders' equity 
Class A Common stock111 107 106 
Class B Common stock36 38 39 
Capital in excess of par value66,765 65,008 63,390 
Treasury stock(9,514)(8,939)(7,600)
Retained earnings72,563 80,238 70,145 
Accumulated other comprehensive loss(11,595)(11,918)(9,278)
Total stockholders' equity118,366 124,534 116,802 
Total liabilities and stockholders' equity$343,377 $388,950 $449,929 













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HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 SIX MONTHS ENDED
JUNE 30
 20232022
 (In thousands)
Operating activities   
Net income (loss)$(4,667)$12,262 
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization2,128 2,465 
Deferred income taxes— 1,533 
Stock compensation expense1,759 1,806 
Brazil foreign currency loss— 2,085 
Other(611)223 
Net changes in operating assets and liabilities:
Trade receivables26,393 19,846 
Inventory20,390 (45,714)
Other assets396 3,383 
Accounts payable22,240 (10,275)
Other liabilities(10,768)(13,070)
Net cash provided by (used for) operating activities 57,260 (25,456)
Investing activities
Expenditures for property, plant and equipment(1,486)(661)
Other(150)— 
Net cash provided by (used for) investing activities(1,636)(661)
Financing activities
Net additions (reductions) to revolving credit agreements(51,058)30,237 
Purchase of treasury stock(575)(1,640)
Cash dividends paid(3,008)(2,870)
Net cash provided by (used for) financing activities (54,641)25,727 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash182 (36)
Cash, cash equivalents and restricted cash
Increase (decrease) for the period1,165 (426)
Balance at the beginning of the period1,905 2,150 
Balance at the end of the period$3,070 $1,724 
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents$2,071 $701 
Restricted cash included in prepaid expenses and other current assets63 62 
Restricted cash included in other non-current assets936 961 
Total cash, cash equivalents, and restricted cash$3,070 $1,724 
8
v3.23.2
Cover Page Cover Page
Aug. 02, 2023
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Title of 12(b) Security Class A Common Stock, Par Value $0.01 Per Share
Written Communications false
Document Period End Date Aug. 02, 2023
Entity Registrant Name HAMILTON BEACH BRANDS HOLDING COMPANY
Document Type 8-K
Entity Incorporation, State or Country Code DE
Entity File Number 001-38214
Entity Tax Identification Number 31-1236686
Entity Address, Address Line One 4421 WATERFRONT DR
Entity Address, City or Town GLEN ALLEN
Entity Address, State or Province VA
Entity Address, Postal Zip Code 23060
City Area Code (804)
Local Phone Number 273-9777
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Trading Symbol HBB
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