Hamilton Beach Brands Holding (HBB) 10-Q 1 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 27, 2017
Entity Information [Line Items]
Entity Registrant Name	HAMILTON BEACH BRANDS HOLDING COMPANY
Entity Central Index Key	1,709,164
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Shares Outstanding Class A
Entity Information [Line Items]
Shares Outstanding (in shares)		7,015,839
Shares Outstanding Class B
Entity Information [Line Items]
Shares Outstanding (in shares)		6,657,593

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
ASSETS
Cash and cash equivalents	$ 3,113	$ 11,340	$ 5,403
Accounts receivable, net of allowances of $12,860 at September 30, 2017, $15,512 at December 31, 2016 and $13,162 at September 30, 2016	93,019	104,074	83,327
Accounts receivable from NACCO	819	0	2,359
Inventories, net	162,891	128,415	171,534
Prepaid expenses and other	8,594	8,586	8,302
Total current assets	268,436	252,415	270,925
Property, plant and equipment, net	17,633	15,943	16,167
Goodwill	6,253	6,253	6,253
Other intangibles, net	6,245	7,282	7,626
Deferred income taxes	19,409	17,504	16,700
Deferred costs	8,494	7,968	8,279
Other non-current assets	2,879	3,468	2,038
Total assets	329,349	310,833	327,988
LIABILITIES AND EQUITY
Accounts payable	136,689	121,253	150,189
Accounts payable to NACCO	9,996	9,705	5,181
Revolving credit agreements	35,462	12,714	5,250
Accrued payroll	14,791	17,443	14,157
Accrued cooperative advertising	8,900	15,056	10,619
Other current liabilities	18,252	13,779	13,810
Total current liabilities	224,090	189,950	199,206
Revolving credit agreements	45,000	26,000	21,829
Other long-term liabilities	27,960	29,615	28,577
Total liabilities	297,050	245,565	249,612
Stockholders' equity
Common stock	0	0	0
Preferred stock	0	0	0
Capital in excess of par value	47,773	75,031	75,031
Retained earnings	0	6,738	19,964
Accumulated other comprehensive loss	(15,610)	(16,501)	(16,619)
Total stockholders' equity	32,299	65,268	78,376
Total liabilities and equity	329,349	310,833	327,988
Class A Common Stock
Stockholders' equity
Common stock	68	0	0
Class B Common Stock
Stockholders' equity
Common stock	$ 68	$ 0	$ 0

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Allowance for doubtful accounts receivable	$ 12,860	$ 15,512	$ 13,162
Common stock, par value (in dollars per share)	$ 1	$ 1	$ 1
Common stock, shares authorized (in shares)	1,000	1,000	1,000
Common stock, shares outstanding (in shares)	0	100	100
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)	0	0	0
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	70,000,000	70,000,000	70,000,000
Common stock, shares outstanding (in shares)	6,836,716	0	0
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	30,000,000	30,000,000	30,000,000
Common stock, shares outstanding (in shares)	6,836,716	0	0

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenues	$ 181,713	$ 188,390	$ 474,971	$ 486,442
Cost of sales	133,586	138,329	353,436	364,052
Gross profit	48,127	50,061	121,535	122,390
Operating expenses
Selling, general and administrative expenses	40,351	36,237	113,343	109,081
Amortization of intangible assets	346	346	1,036	1,036
Operating expenses	40,697	36,583	114,379	110,117
Operating profit	7,430	13,478	7,156	12,273
Other expense (income)
Interest expense	423	286	1,300	1,115
Other, net, including interest income	40	457	(939)	288
Other (income) expense	463	743	361	1,403
Income before income tax provision	6,967	12,735	6,795	10,870
Income tax provision	2,708	4,003	2,655	3,323
Net income	$ 4,259	$ 8,732	$ 4,140	$ 7,547
Basic and diluted earnings per share (in dollars per share)	$ 0.31	$ 0.64	$ 0.30	$ 0.55
Basic and diluted weighted average shares outstanding (in shares)	13,673,000	13,673,000	13,673,000	13,673,000

Unaudited Condensed Consolidat5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 4,259	$ 8,732	$ 4,140	$ 7,547
Foreign currency translation adjustment	(18)	(517)	1,725	(1,335)
Current period cash flow hedging activity, net of $21 and $390 tax benefit in the three and nine months ended September 30, 2017, and $63 tax expense and $440 tax benefit in the three and nine months ended September 30, 2016, respectively.	(72)	145	(931)	(837)
Reclassification of hedging activities into earnings, net of $13 and $42 tax expense in the three and nine months ended September 30, 2017, respectively, and $69 tax benefit and $5 tax expense in the three and nine months ended September 30, 2016, respectively.	(35)	163	(116)	(42)
Reclassification of pension adjustments into earnings, net of $53 and $155 tax benefit in the three and nine months ended September 30, 2017, respectively, and $50 and $147 tax benefit in the three and nine months ended September 30, 2016, respectively.	62	88	213	219
Total other comprehensive income (loss)	(63)	(121)	891	(1,995)
Comprehensive income	$ 4,196	$ 8,611	$ 5,031	$ 5,552

Unaudited Condensed Consolidat6

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Current period cash flow hedging activity, tax expense (benefit)	$ (21)	$ 63	$ (390)	$ (440)
Reclassification of hedging activities into earnings, tax expense (benefit)	13	(69)	42	5
Reclassification of pension and postretirement adjustments into earnings, tax expense (benefit)	$ (53)	$ (50)	$ (155)	$ (147)

Unaudited Condensed Consolidat7

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities
Net income	$ 4,140	$ 7,547
Adjustments to reconcile from net income to net cash (used for) provided by operating activities:
Depreciation and amortization	3,709	4,053
Amortization of deferred financing fees	151	170
Deferred income taxes	(1,905)	3,343
Other	(1,305)	(2,157)
Working capital changes:
Affiliates receivable/payable	(513)	(5,892)
Accounts receivable	11,053	19,000
Inventories	(34,476)	(44,925)
Other current assets	149	(54)
Accounts payable	15,421	55,825
Other current liabilities	(4,124)	(2,403)
Net cash (used for) provided by operating activities	(7,700)	34,507
Investing activities
Expenditures for property, plant and equipment	(4,366)	(4,392)
Other	21	66
Net cash used for investing activities	(4,345)	(4,326)
Financing activities
Net additions (reductions) to revolving credit agreements	41,747	(31,286)
Cash dividends paid to NACCO	(38,000)	(10,000)
Other	0	(186)
Net cash provided by (used for) financing activities	3,747	(41,472)
Effect of exchange rate changes on cash	71	(104)
Cash and cash equivalents
Decrease for the period	(8,227)	(11,395)
Balance at the beginning of the period	11,340	16,798
Balance at the end of the period	$ 3,113	$ 5,403

Unaudited Condensed Consolidat8

Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Capital in Excess of Par Value	Retained Earnings	Foreign Currency Translation Adjustment	Deferred Gain (Loss) on Cash Flow Hedging	Pension Plan Adjustment	Class A Common StockClass B Common Stock	Class B Common StockClass B Common Stock
Balance, beginning of period at Dec. 31, 2015	$ 82,824	$ 75,031	$ 22,417	$ (6,545)	$ 343	$ (8,422)	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	7,547		7,547
Cash dividends to NACCO	(10,000)		(10,000)
Current period other comprehensive income (loss)	(2,172)			(1,335)	(837)
Reclassification adjustment to net income (loss)	177				(42)	219
Balance, end of period at Sep. 30, 2016	78,376	75,031	19,964	(7,880)	(536)	(8,203)	0	0
Balance, beginning of period at Dec. 31, 2016	65,268	75,031	6,738	(8,623)	616	(8,494)	0	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock	0	(136)					68	68
Net income	4,140		4,140
Cash dividends to NACCO	(38,000)	(27,122)	(10,878)
Current period other comprehensive income (loss)	794			1,725	(931)
Reclassification adjustment to net income (loss)	97				(116)	213
Balance, end of period at Sep. 30, 2017	$ 32,299	$ 47,773	$ 0	$ (6,898)	$ (431)	$ (8,281)	$ 68	$ 68

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations and Basis of Presentation	Nature of Operations and Basis of Presentation Nature of Operations The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Hamilton Beach Brands Holding Company ("Hamilton Beach Holding” or the “Company”). Intercompany accounts and transactions among the consolidated companies are eliminated in consolidation. The Company's subsidiaries operate in the following principal industries: consumer, commercial and specialty small appliances and specialty retail. The Company manages its subsidiaries primarily by industry. Hamilton Beach Brands, Inc. (“HBB”) is a leading designer, marketer and distributor of small branded electric household and specialty housewares appliances as well as commercial products for restaurants, bars and hotels. The Kitchen Collection, LLC (“KC”) is a national specialty retailer of kitchenware operating under the Kitchen Collection ® store name in outlet and traditional malls throughout the United States. Basis of Presentation On September 29, 2017, NACCO Industries, Inc. ("NACCO"), Hamilton Beach Holding's former parent company, spun-off the Company to NACCO stockholders. In the spin-off, NACCO stockholders, in addition to retaining their shares of NACCO common stock, received one share of Hamilton Beach Holding Class A common stock and one share of Hamilton Beach Holding Class B common stock for each share of NACCO Class A or Class B common stock. In accordance with applicable authoritative accounting guidance, the Company accounted for the spin-off from NACCO based on the historical carrying value of assets and liabilities. As a result of the distribution of one share of Hamilton Beach Holding Class A common stock and one share of Hamilton Beach Holding Class B common stock for each share of NACCO Class A or NACCO Class B common stock, the earnings per share amounts for the Company have been calculated based upon the number of shares distributed in the spin-off. NACCO did not receive any proceeds from the spin-off. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company at September 30, 2017 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the nine months ended September 30, 2017 and 2016 have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Registration Statement on Form S-1 (Registration No. 333-220066) (the "Registration Statement"). The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information or notes required by U.S. GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2017. The HBB and KC businesses are seasonal and a majority of revenues and operating profit typically occurs in the second half of the calendar year when sales of small electric household appliances to retailers and consumers increase significantly for the fall holiday selling season.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	9 Months Ended
	Sep. 30, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recently Issued Accounting Standards	Recently Issued Accounting Standards Accounting Standards Not Yet Adopted The Company is an emerging growth company and has not elected to opt out of the extended transition period for complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. In May 2014, the FASB codified in ASC 606, "Revenue Recognition - Revenue from Contracts with Customers," which supersedes most current revenue recognition guidance, including industry-specific guidance, and requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers and provide additional disclosures. The effective date for nonpublic entities is annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The Company plans to adopt the standard on January 1, 2018. The Company anticipates using the modified retrospective method with the cumulative effect of initially applying the standard recognized as an adjustment to equity. The Company has developed a project plan with respect to its implementation of this standard, including identification of revenue streams and review of contracts and procedures currently in place. To date, the Company has completed its initial review of the revenue streams related to its HBB and KC subsidiaries. The Company is also in the process of identifying and implementing any necessary changes to processes and controls to meet the standard's updated reporting and disclosure requirements. While the Company continues to assess the potential impact of the new standard, Hamilton Beach Holding’s revenue is primarily generated from the sale of finished product to customers. Those sales are recognized at a single point in time when ownership, risks and rewards transfer. The amount and timing of revenue recognition is not materially impacted by the new standard therefore the adoption of the standard is not expected to have a material impact to the Company’s financial position, results of operations or cash flows. The adoption of this guidance will result in increased disclosures to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are summarized as follows: SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30 Sourced inventories - HBB $ 133,018 $ 95,008 $ 133,396 Retail inventories - KC 29,873 33,407 38,138 Total inventories $ 162,891 $ 128,415 $ 171,534

Fair Value Disclosure

Fair Value Disclosure	9 Months Ended
	Sep. 30, 2017
Fair Value Disclosures [Abstract]
Fair Value Disclosure	Fair Value Disclosure Recurring Fair Value Measurements : The following table presents the Company's assets and liabilities accounted for at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Description Date (Level 1) (Level 2) (Level 3) September 30, 2017 Assets: Interest rate swap agreements $ 603 $ — $ 603 $ — $ 603 $ — $ 603 $ — Liabilities: Foreign currency exchange contracts $ 694 $ — $ 694 $ — $ 694 $ — $ 694 $ — December 31, 2016 Assets: Interest rate swap agreements $ 774 $ — $ 774 $ — Foreign currency exchange contracts 147 — 147 — $ 921 $ — $ 921 $ — September 30, 2016 Assets: Foreign currency exchange contracts $ 15 $ — $ 15 $ — $ 15 $ — $ 15 $ — Liabilities: Interest rate swap agreements $ 745 $ — $ 745 $ — $ 745 $ — $ 745 $ — The Company uses significant other observable inputs to value derivative instruments used to hedge foreign currency and interest rate risk; therefore, they are classified within Level 2 of the valuation hierarchy. The fair value for these contracts is determined based on exchange rates and interest rates, respectively. There were no transfers into or out of Levels 1, 2 or 3 during the three and nine months ended September 30, 2017 and 2016 .

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Contingencies Various legal and regulatory proceedings and claims have been or may be asserted against Hamilton Beach Holding and certain subsidiaries relating to the conduct of their businesses, including product liability, patent infringement, asbestos-related claims, environmental and other claims. These proceedings and claims are incidental to the ordinary course of business of the Company. Management believes that it has meritorious defenses and will vigorously defend the Company in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, in some circumstances, an estimate of the possible loss. These matters are subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of an adverse impact on the Company’s financial position, results of operations and cash flows of the period in which the ruling occurs, or in future periods. Environmental matters HBB is investigating or remediating historical environmental contamination at some current and former sites operated by HBB or by businesses it acquired. Based on the current stage of the investigation or remediation at each known site, HBB estimates the total investigation and remediation costs and the period of assessment and remediation activity required for each site. The estimate of future investigation and remediation costs is primarily based on variables associated with site clean-up, including, but not limited to, physical characteristics of the site, the nature and extent of the contamination and applicable regulatory programs and remediation standards. No assessment can fully characterize all subsurface conditions at a site. There is no assurance that additional assessment and remediation efforts will not result in adjustments to estimated remediation costs or the time frame for remediation at these sites. HBB's estimates of investigation and remediation costs may change if it discovers contamination at additional sites or additional contamination at known sites, if the effectiveness of its current remediation efforts change, if applicable federal or state regulations change or if HBB's estimate of the time required to remediate the sites changes. HBB's revised estimates may differ materially from original estimates. At September 30, 2017 , December 31, 2016 and September 30, 2016 , HBB had accrued undiscounted obligations of $9.0 million , $8.7 million and $9.0 million , respectively, for environmental investigation and remediation activities. In addition, HBB estimates that it is reasonably possible that it may incur additional expenses in the range of zero to $5.3 million related to the environmental investigation and remediation at these sites.

Business Segments

Business Segments	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
Business Segments	Business Segments Hamilton Beach Holding is an operating holding company with HBB and KC as reportable segments. See Note 1 for a discussion of the Company's industries and product lines. Financial information for each of Hamilton Beach Holding's reportable segments is presented in the following table. The line “Eliminations” eliminates revenues from HBB sales to KC. The amounts of these revenues are based on current market prices of similar third-party transactions. No other sales transactions occur among reportable segments. THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 2017 2016 2017 2016 Revenues HBB $ 153,592 $ 157,264 $ 395,320 $ 400,058 KC 28,644 32,895 81,177 89,912 Eliminations (523 ) (1,769 ) (1,526 ) (3,528 ) Total $ 181,713 $ 188,390 $ 474,971 $ 486,442 Operating profit (loss) HBB (a) $ 9,001 $ 14,399 $ 14,947 $ 19,162 KC (1,581 ) (921 ) (7,868 ) (6,822 ) Eliminations 10 — 77 (67 ) Total $ 7,430 $ 13,478 $ 7,156 $ 12,273 (a) HBB's operating profit includes the recognition of $2.5 million of expenses related to the spin-off in the three and nine months ended September 30, 2017.

Income Taxes Income Taxes

Income Taxes Income Taxes	9 Months Ended
	Sep. 30, 2017
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The U.S. operating results of the Company will be included in the consolidated federal income tax return filed by NACCO through the spin-off date. The Company's allocation of taxes through the spin-off date will be in accordance with the Tax Allocation Agreement. In general, the Tax Allocation Agreement between the Company and NACCO provides that federal income taxes are computed by the Company as if it had filed a tax return on a standalone basis. Subsequent to the spin-off, the Company will file a separate federal tax return in the U.S. for the period subsequent to the spin-off date.

Nature of Operations and Basis

Nature of Operations and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	Nature of Operations The accompanying Unaudited Condensed Consolidated Financial Statements include the accounts of Hamilton Beach Brands Holding Company ("Hamilton Beach Holding” or the “Company”). Intercompany accounts and transactions among the consolidated companies are eliminated in consolidation. The Company's subsidiaries operate in the following principal industries: consumer, commercial and specialty small appliances and specialty retail. The Company manages its subsidiaries primarily by industry. Hamilton Beach Brands, Inc. (“HBB”) is a leading designer, marketer and distributor of small branded electric household and specialty housewares appliances as well as commercial products for restaurants, bars and hotels. The Kitchen Collection, LLC (“KC”) is a national specialty retailer of kitchenware operating under the Kitchen Collection ® store name in outlet and traditional malls throughout the United States.
Basis of Presentation	Basis of Presentation On September 29, 2017, NACCO Industries, Inc. ("NACCO"), Hamilton Beach Holding's former parent company, spun-off the Company to NACCO stockholders. In the spin-off, NACCO stockholders, in addition to retaining their shares of NACCO common stock, received one share of Hamilton Beach Holding Class A common stock and one share of Hamilton Beach Holding Class B common stock for each share of NACCO Class A or Class B common stock. In accordance with applicable authoritative accounting guidance, the Company accounted for the spin-off from NACCO based on the historical carrying value of assets and liabilities. As a result of the distribution of one share of Hamilton Beach Holding Class A common stock and one share of Hamilton Beach Holding Class B common stock for each share of NACCO Class A or NACCO Class B common stock, the earnings per share amounts for the Company have been calculated based upon the number of shares distributed in the spin-off. NACCO did not receive any proceeds from the spin-off. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company at September 30, 2017 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the nine months ended September 30, 2017 and 2016 have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Registration Statement on Form S-1 (Registration No. 333-220066) (the "Registration Statement"). The balance sheet at December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information or notes required by U.S. GAAP for complete financial statements. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2017. The HBB and KC businesses are seasonal and a majority of revenues and operating profit typically occurs in the second half of the calendar year when sales of small electric household appliances to retailers and consumers increase significantly for the fall holiday selling season.
Accounting Standards Not Yet Adopted	Accounting Standards Not Yet Adopted The Company is an emerging growth company and has not elected to opt out of the extended transition period for complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company can adopt the new or revised standard at the time private companies adopt the new or revised standard. In May 2014, the FASB codified in ASC 606, "Revenue Recognition - Revenue from Contracts with Customers," which supersedes most current revenue recognition guidance, including industry-specific guidance, and requires an entity to recognize revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers and provide additional disclosures. The effective date for nonpublic entities is annual reporting periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The Company plans to adopt the standard on January 1, 2018. The Company anticipates using the modified retrospective method with the cumulative effect of initially applying the standard recognized as an adjustment to equity. The Company has developed a project plan with respect to its implementation of this standard, including identification of revenue streams and review of contracts and procedures currently in place. To date, the Company has completed its initial review of the revenue streams related to its HBB and KC subsidiaries. The Company is also in the process of identifying and implementing any necessary changes to processes and controls to meet the standard's updated reporting and disclosure requirements. While the Company continues to assess the potential impact of the new standard, Hamilton Beach Holding’s revenue is primarily generated from the sale of finished product to customers. Those sales are recognized at a single point in time when ownership, risks and rewards transfer. The amount and timing of revenue recognition is not materially impacted by the new standard therefore the adoption of the standard is not expected to have a material impact to the Company’s financial position, results of operations or cash flows. The adoption of this guidance will result in increased disclosures to help users of financial statements understand the nature, amount and timing of revenue and cash flows arising from contracts.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories are summarized as follows: SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30 Sourced inventories - HBB $ 133,018 $ 95,008 $ 133,396 Retail inventories - KC 29,873 33,407 38,138 Total inventories $ 162,891 $ 128,415 $ 171,534

Fair Value Disclosure (Tables)

Fair Value Disclosure (Tables)	9 Months Ended
	Sep. 30, 2017
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	The following table presents the Company's assets and liabilities accounted for at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Description Date (Level 1) (Level 2) (Level 3) September 30, 2017 Assets: Interest rate swap agreements $ 603 $ — $ 603 $ — $ 603 $ — $ 603 $ — Liabilities: Foreign currency exchange contracts $ 694 $ — $ 694 $ — $ 694 $ — $ 694 $ — December 31, 2016 Assets: Interest rate swap agreements $ 774 $ — $ 774 $ — Foreign currency exchange contracts 147 — 147 — $ 921 $ — $ 921 $ — September 30, 2016 Assets: Foreign currency exchange contracts $ 15 $ — $ 15 $ — $ 15 $ — $ 15 $ — Liabilities: Interest rate swap agreements $ 745 $ — $ 745 $ — $ 745 $ — $ 745 $ —

Business Segments (Tables)

Business Segments (Tables)	9 Months Ended
	Sep. 30, 2017
Segment Reporting [Abstract]
Segment Reporting Information	Financial information for each of Hamilton Beach Holding's reportable segments is presented in the following table. The line “Eliminations” eliminates revenues from HBB sales to KC. The amounts of these revenues are based on current market prices of similar third-party transactions. No other sales transactions occur among reportable segments. THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 2017 2016 2017 2016 Revenues HBB $ 153,592 $ 157,264 $ 395,320 $ 400,058 KC 28,644 32,895 81,177 89,912 Eliminations (523 ) (1,769 ) (1,526 ) (3,528 ) Total $ 181,713 $ 188,390 $ 474,971 $ 486,442 Operating profit (loss) HBB (a) $ 9,001 $ 14,399 $ 14,947 $ 19,162 KC (1,581 ) (921 ) (7,868 ) (6,822 ) Eliminations 10 — 77 (67 ) Total $ 7,430 $ 13,478 $ 7,156 $ 12,273 (a) HBB's operating profit includes the recognition of $2.5 million of expenses related to the spin-off in the three and nine months ended September 30, 2017.

Nature of Operations and Basi20

Nature of Operations and Basis of Presentation Nature of Operations and Basis of Presentation (Details)	Sep. 29, 2017shares
Class A Common Stock
Class of Stock [Line Items]
Shares of common stock issued in spin-off	1
Class B Common Stock
Class of Stock [Line Items]
Shares of common stock issued in spin-off	1

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Inventory Disclosure [Abstract]
Sourced inventories - HBB	$ 133,018	$ 95,008	$ 133,396
Retail inventories - KC	29,873	33,407	38,138
Total inventories	$ 162,891	$ 128,415	$ 171,534

Fair Value Disclosure (On a Rec

Fair Value Disclosure (On a Recurring Basis) (Details) - Fair value measurements, recurring - USD ($)	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Assets:
Interest rate swap agreements	$ 603,000	$ 774,000
Foreign currency exchange contracts		147,000	$ 15,000
Assets at fair value	603,000	921,000	15,000
Liabilities:
Foreign currency exchange contracts	694,000
Interest rate swap agreements			745,000
Liabilities at fair value	694,000		745,000
Level 1
Assets:
Interest rate swap agreements	0	0
Foreign currency exchange contracts		0	0
Assets at fair value	0	0	0
Liabilities:
Foreign currency exchange contracts	0
Interest rate swap agreements			0
Liabilities at fair value	0		0
Level 2
Assets:
Interest rate swap agreements	603,000	774,000
Foreign currency exchange contracts		147,000	15,000
Assets at fair value	603,000	921,000	15,000
Liabilities:
Foreign currency exchange contracts	694,000
Interest rate swap agreements			745,000
Liabilities at fair value	694,000		745,000
Level 3
Assets:
Interest rate swap agreements	0	0
Foreign currency exchange contracts		0	0
Assets at fair value	0	$ 0	0
Liabilities:
Foreign currency exchange contracts	0
Interest rate swap agreements			0
Liabilities at fair value	$ 0		$ 0

Contingencies (Narrative) (Deta

Contingencies (Narrative) (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016
Loss Contingencies [Line Items]
Accrual for environmental investigation and remediation activities	$ 9,000,000	$ 8,700,000	$ 9,000,000
Minimum
Loss Contingencies [Line Items]
Estimate of possible loss	0
Maximum
Loss Contingencies [Line Items]
Estimate of possible loss	$ 5,300,000

Business Segments (Details)

Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Segment Reporting Information [Line Items]
Revenues	$ 181,713	$ 188,390	$ 474,971	$ 486,442
Operating profit (loss)	7,430	13,478	7,156	12,273
Operating segments | HBB
Segment Reporting Information [Line Items]
Revenues	153,592	157,264	395,320	400,058
Operating profit (loss)	9,001	14,399	14,947	19,162
Operating segments | KC
Segment Reporting Information [Line Items]
Revenues	28,644	32,895	81,177	89,912
Operating profit (loss)	(1,581)	(921)	(7,868)	(6,822)
Eliminations
Segment Reporting Information [Line Items]
Revenues	(523)	(1,769)	(1,526)	(3,528)
Operating profit (loss)	10	$ 0	77	$ (67)
Spin-off | Operating segments | HBB
Segment Reporting Information [Line Items]
Expenses related to spin-off	$ 2,500		$ 2,500