Hamilton Beach Brands Holding (HBB) 10-Q 2 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 27, 2018
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	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Shares Outstanding Class A
Entity Information [Line Items]
Shares Outstanding (in shares)		9,185,505
Shares Outstanding Class B
Entity Information [Line Items]
Shares Outstanding (in shares)		4,509,663

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
ASSETS
Cash and cash equivalents	$ 2,389	$ 10,906	$ 5,575
Accounts receivable, net	88,579	114,100	61,248
Inventories	157,622	134,744	129,727
Prepaid expenses and other	11,848	8,835	8,790
Total current assets	260,438	268,585	205,340
Property, plant and equipment, net	20,597	19,083	16,204
Goodwill	6,253	6,253	6,253
Other intangibles, net	5,555	5,900	6,936
Deferred income taxes	12,200	12,825	16,434
Deferred costs	10,347	10,466	8,282
Other non-current assets	3,224	3,121	3,329
Total assets	318,614	326,233	262,778
LIABILITIES AND EQUITY
Accounts payable	108,185	143,012	79,185
Accounts payable to NACCO Industries, Inc.	9,285	9,189	7,027
Revolving credit agreements	65,508	31,346	30,978
Accrued payroll	9,833	17,302	8,293
Accrued cooperative advertising	5,734	11,418	6,683
Other current liabilities	27,832	18,679	14,449
Total current liabilities	226,377	230,946	146,615
Revolving credit agreements	20,000	20,000	28,000
Other long-term liabilities	24,600	28,879	26,487
Total liabilities	270,977	279,825	201,102
Stockholders' equity
Common stock	0	0	0
Preferred stock	0	0	0
Capital in excess of par value	49,051	47,773	75,031
Retained earnings	12,191	12,603	2,381
Accumulated other comprehensive loss	(13,742)	(14,104)	(15,736)
Total stockholders' equity	47,637	46,408	61,676
Total liabilities and equity	318,614	326,233	262,778
Class A Common Stock
Stockholders' equity
Common stock	92	88	0
Class B Common Stock
Stockholders' equity
Common stock	$ 45	$ 48	$ 0

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
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	0	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)	9,164,049	8,865,207	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)	4,521,958	4,808,225	0

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Revenues	$ 146,633	$ 140,282
Cost of sales	108,840	105,705
Gross profit	37,793	34,577
Operating expenses
Selling, general and administrative expenses	37,785	36,670
Amortization of intangible assets	345	345
Operating expenses	38,130	37,015
Operating loss	(337)	(2,438)
Other expense (income)
Interest expense	544	415
Other, net, including interest income	(317)	(682)
Other (income) expense	227	(267)
Loss before income tax benefit	(564)	(2,171)
Income tax benefit	(146)	(814)
Net loss	$ (418)	$ (1,357)
Basic and diluted loss per share (usd per share)	$ (0.03)	$ (0.10)
Basic and diluted weighted average shares outstanding (in shares)	13,683	13,673
Cash Dividends on Class A Common and Class B Common per share	$ 0.085	$ 0

Unaudited Condensed Consolidat5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (418)	$ (1,357)
Foreign currency translation adjustment	917	1,071
Current period cash flow hedging activity, net of $90 tax expense and $139 tax benefit in the three months ended March 31, 2018 and March 31, 2017, respectively.	289	(337)
Reclassification of hedging activities into earnings, net of $64 tax benefit and $18 tax expense in the three months ended March 31, 2018 and March 31, 2017, respectively.	166	(50)
Reclassification of pension adjustments into earnings, net of $44 and $51 tax benefit in the three months ended March 31, 2018 and March 31, 2017, respectively.	158	81
Total other comprehensive income	1,530	765
Comprehensive income (loss)	$ 1,112	$ (592)

Unaudited Condensed Consolidat6

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Current period cash flow hedging activity, tax expense (benefit)	$ 90	$ (139)
Reclassification of hedging activities into earnings, tax expense (benefit)	(64)	18
Reclassification of pension and postretirement adjustments into earnings, tax expense (benefit)	$ (44)	$ (51)

Unaudited Condensed Consolidat7

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net loss	$ (418)	$ (1,357)
Adjustments to reconcile from net loss to net cash used for operating activities:
Depreciation and amortization	1,235	1,308
Amortization of deferred financing fees	50	55
Deferred income taxes	582	1,249
Other	(1,770)	(3,089)
Working capital changes:
Affiliates receivable/payable	96	(2,679)
Accounts receivable	25,521	42,826
Inventories	(22,878)	(1,312)
Other current assets	(3,013)	(161)
Accounts payable	(34,827)	(42,068)
Other liabilities	(3,712)	(16,933)
Net cash used for operating activities	(39,134)	(22,161)
Investing activities
Expenditures for property, plant and equipment	(2,401)	(1,225)
Other	0	5
Net cash used for investing activities	(2,401)	(1,220)
Financing activities
Net additions to revolving credit agreements	34,162	20,263
Cash dividends to NACCO Industries, Inc.	0	(3,000)
Net cash provided by financing activities	33,000	17,263
Effect of exchange rate changes on cash	18	353
Cash and cash equivalents
Decrease for the period	(8,517)	(5,765)
Balance at the beginning of the period	10,906	11,340
Balance at the end of the period	2,389	5,575
Common class A and B
Financing activities
Cash dividends to NACCO Industries, Inc.	$ (1,162)	$ 0

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, 2016	$ 65,268	$ 75,031	$ 6,738	$ (8,623)	$ 616	$ (8,494)	$ 0	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(1,357)		(1,357)
Cash dividends to NACCO Industries, Inc.	(3,000)		(3,000)
Current period other comprehensive income (loss)	734			1,071	(337)
Reclassification adjustment to net income (loss)	31				50	(81)
Balance, end of period at Mar. 31, 2017	61,676	75,031	2,381	(7,552)	229	(8,413)	0	0
Balance, beginning of period at Dec. 31, 2017	46,408	47,773	12,603	(7,934)	508	(6,678)	88	48
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(418)		(418)
Cash dividends to NACCO Industries, Inc.	(1,162)		(1,162)
Current period other comprehensive income (loss)	1,206			917	289
Reclassification adjustment to net income (loss)	324				(166)	(158)
Issuance of common stock, net of conversions	324	323					4	(3)
Share-based compensation expense	955	955
Reclassification due to adoption of ASU 2018-02	0		1,168		118	(1,286)
Balance, end of period at Mar. 31, 2018	$ 47,637	$ 49,051	$ 12,191	$ (7,017)	$ 1,081	$ (7,806)	$ 92	$ 45

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2018
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”). Hamilton Beach Holding is an operating holding company for two separate businesses. The Company includes the required intercompany eliminations between the two separate businesses and certain federal tax attributes. Costs incurred as a stand-alone public entity are allocated to the HBB segment. The only material assets held by Hamilton Beach Holding are its investments in consolidated subsidiaries, and substantially all of its cash flows are provided by dividends paid or distributions made by its subsidiaries. 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 segment. Hamilton Beach Brands, Inc. (“HBB”) is a leading designer, marketer and distributor of branded, small 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 in outlet and traditional malls throughout the United States. 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 for periods prior to the spin-off have been calculated based upon the number of shares distributed in the spin-off. NACCO did not receive any proceeds from the spin-off. Basis of Presentation 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 March 31, 2018 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months ended March 31, 2018 and 2017 have been included. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The balance sheet at December 31, 2017 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 months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2018. 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. For further information regarding seasonality of these businesses, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017.

Recently Issued Accounting Stan

Recently Issued Accounting Standards	3 Months Ended
	Mar. 31, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recently Issued Accounting Standards	Recently Issued Accounting Standards The Company is an emerging growth company and has elected not 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. Accounting Standards Adopted In May 2014, the FASB codified in ASC 606, "Revenue Recognition - Revenue from Contracts with Customers" ("ASC 606"), which supersedes ASC 605, "Revenue Recognition" ("ASC 605"), 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 has adopted the guidance for all contracts at the date of initial application of January 1, 2018. The amount and timing of revenue recognition is not materially impacted by the new standard, thus no cumulative adjustment was recognized upon adoption. See Note 3 for further discussion on the nature, amount and timing of revenue and cash flows arising from contracts with customers. In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220)". The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act (the "Tax Act") of 2017 from accumulated other comprehensive income ("AOCI") into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company elected to early adopt ASU 2018-02 as of January 1, 2018. As a result of adopting this standard, the Company reclassified $1.2 million from AOCI to retained earnings. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is planning to adopt ASU 2016-02 for its fiscal year ending December 31, 2020 and is currently evaluating to what extent ASU 2016-02 will affect the Company's financial position, results of operations, cash flows and related disclosures.

Revenues (Notes)

Revenues (Notes)	3 Months Ended
	Mar. 31, 2018
Revenue Recognition and Deferred Revenue [Abstract]
Revenues	Revenues The Company accounts for revenue in accordance with ASC 606, which was adopted on January 1, 2018, using the modified retrospective method. The amount and timing of revenue recognition was not impacted by the new standard and therefore no cumulative adjustment was recognized upon adoption. Results for the reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts continue to be reported in accordance with historical accounting methods under ASC 605. The classification of refund liabilities, which is now reported in Other current liabilities on the Consolidated Balance Sheet, was previously classified as an allowance against Accounts Receivable. Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales taxes are excluded from revenue. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. A description of our performance obligations for each segment is included below. Hamilton Beach Brands • Product revenues - Product revenues consist of sales of small electric household and specialty housewares appliances to traditional brick and mortar and e-commerce retailers, distributors and directly to the end consumer as well as sales of commercial products for restaurants, bars and hotels. Transactions with these customers generally originate upon the receipt of a purchase order from the customer, which in some cases are governed by master sales agreements, specifying product(s) that the customer desires. Contracts for product revenues generally have an original duration of one year or less, and payment terms are generally standard and based on customer creditworthiness. Revenue from product sales is recognized at the point in time when control transfers to the customer, which is either when product is shipped from the Company's facility, or delivered to customers, depending on the shipping terms. The amount of consideration received and revenue recognized varies with changes in incentives, returns and consideration paid to customers for advertising arrangements. The Company has elected to account for shipping and handling activities performed after a customer obtains control of the goods as activities to fulfill the promise to transfer the goods, and therefore these activities are not assessed as a separate service to customers. • License revenues - From time to time, the Company enters into licensing agreements which grant the right to use, on a non-exclusive basis, certain of the Company’s intellectual property (IP) in connection with designing, manufacturing, distributing, advertising, promoting and selling the licensees’ products during the term of the agreement. The IP that is licensed generally consists of trademarks, tradenames, trade dress, and/or logos (the “Licensed IP”). In exchange for granting the right to use the Licensed IP, the Company receives a royalty payment, which is a function of (1) the total net sales of products that use the Licensed IP and (2) the royalty percentage that is stated in the licensing agreement. The Company recognizes revenue at the later of when the subsequent sales occur or satisfying the performance obligation (over time). Kitchen Collection • Product revenues - KC sells a variety of kitchenware products from a number of highly recognizable name brands to individual consumers. Products are predominantly sold through brick and mortar retail stores whereby customers come into KC stores, explore the assortment of merchandise available for sale, select various products that they desire to purchase, bring those products to the sales register and pay the cashier the agreed-upon price using either cash or credit card. Once the sale is complete, a receipt is generated and provided to the customer as proof of purchase. Therefore, the sales process is both originated and completed simultaneously at the point of sale. Revenue from product sales is recognized at the point in time when control transfers to the customer, which occurs when the products are scanned at the sales register. The amount of consideration received and revenue recognized varies with changes in returns. HBB’s warranty program to the consumer consists generally of an assurance-type limited warranty lasting for varying periods of up to ten years for electric appliances, with the majority of products having a warranty of one year. There is no guarantee to the customer as HBB may repair or replace, at its option, those products returned under warranty. Accordingly, the Company determined no separate performance obligation exists. HBB products are not sold with the right of return. However, based on historical experience, a portion of HBB and KC products sold are estimated to be returned due to reasons such as buyer remorse, duplicate gifts received, product failure and excess inventory stocked by the customer, which, subject to certain terms and conditions, the Company will agree to accept. The Company accounts for these product returns as variable consideration. Other forms of variable consideration include customer programs and incentive offerings, including special pricing agreements, price competition, promotions and other volume-based incentives. To estimate variable consideration, the Company applies both the “expected value” method and “most likely amount” method based on the form of variable consideration, according to which method would provide the better prediction. The expected value method involves a probability weighted determination of the expected amount, whereas the most likely amount method identifies the single most likely outcome in a range of possible amounts. The following table presents the Company's revenues on a disaggregated basis for the three months ending March 31, 2018: HBB KC Consolidated (1) Type of good or service: Products $ 124,581 $ 22,100 $ 145,800 Licensing 833 — 833 Total revenues $ 125,414 $ 22,100 $ 146,633 (1) Includes the required intercompany eliminations between HBB and KC.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories are summarized as follows: MARCH 31 DECEMBER 31 MARCH 31 Sourced inventories - HBB $ 132,749 $ 111,493 $ 98,483 Retail inventories - KC 24,873 23,251 31,244 Total inventories $ 157,622 $ 134,744 $ 129,727

Fair Value Disclosure

Fair Value Disclosure	3 Months Ended
	Mar. 31, 2018
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) March 31, 2018 Assets: Interest rate swap agreements $ 1,422 $ — $ 1,422 $ — Foreign currency exchange contracts 265 — 265 — $ 1,687 $ — $ 1,687 $ — Liabilities: Foreign currency exchange contracts $ 212 $ — $ 212 $ — $ 212 $ — $ 212 $ — December 31, 2017 Assets: Interest rate swap agreements $ 894 $ — $ 894 $ — Foreign currency exchange contracts 245 — 245 — $ 1,139 $ — $ 1,139 $ — Liabilities: Foreign currency exchange contracts $ 93 $ — $ 93 $ — $ 93 $ — $ 93 $ — March 31, 2017 Assets: Interest rate swap agreements $ 802 $ — $ 802 $ — Foreign currency exchange contracts 27 — 27 $ — $ 829 $ — $ 829 $ — Liabilities: Interest rate swap agreements $ 489 $ — $ 489 $ — $ 489 $ — $ 489 $ — 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. At March 31, 2018, December 31, 2017, and March 31, 2017, there were no transfers into or out of Levels 1, 2 or 3.

Contingencies

Contingencies	3 Months Ended
	Mar. 31, 2018
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 March 31, 2018 , December 31, 2017 and March 31, 2017 , HBB had accrued undiscounted obligations of $8.7 million , $8.9 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	3 Months Ended
	Mar. 31, 2018
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. Financial information for each of Hamilton Beach Holding’s reportable segments is presented in the following table. The line “Eliminations” in the revenues section 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 MARCH 31 2018 2017 Revenues HBB $ 125,414 $ 114,154 KC 22,100 26,665 Eliminations (881 ) (537 ) Total $ 146,633 $ 140,282 Operating profit (loss) HBB $ 3,993 $ 782 KC (4,304 ) (3,279 ) Eliminations (26 ) 59 Total $ (337 ) $ (2,438 ) Net income (loss) HBB $ 2,802 $ 689 KC (3,638 ) (2,143 ) Eliminations 418 97 Total $ (418 ) $ (1,357 )

Income Taxes Income Taxes

Income Taxes Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes On December 22, 2017, the U.S. federal government enacted the Tax Act, which significantly revises U.S. tax law. The Company’s effective income tax rate was 25.9% for the three months ended March 31, 2018 compared to 37.5% for the three months ended March 31, 2017, primarily due to the reduction of the U.S. federal corporate tax rate from 35 percent to 21 percent during 2018. Subsequent to the enactment of the Tax Act, the SEC staff issued Staff Accounting Bulletin 118 (“SAB 118”), which provides a measurement period of up to one year after the enactment date for companies to finalize the recognition of the income tax effects of the Tax Act. As a result of the Tax Act and pursuant to SAB 118, the Company recorded a provisional net tax charge of $4.7 million during the year ended December 31, 2017; however, there is still uncertainty as to the application of the Tax Act, in particular as it relates to state income taxes. Further, management has not yet completed the analysis of the amount of foreign earnings subject to U.S. income tax, and the portion of foreign earnings held in cash or other specified assets. No adjustments were recorded to the provisional amounts during the three months ending March 31, 2018. The ultimate impact of the Tax Act may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions, additional regulatory guidance that may be issued, and the computation of state income taxes as there is uncertainty on conformity to the U.S. federal tax system following the Tax Act.

Transfer of Financial Assets (N

Transfer of Financial Assets (Notes)	3 Months Ended
	Mar. 31, 2018
Transfers and Servicing [Abstract]
Transfer of Financial Assets	Transfer of Financial Assets The Company has entered into an arrangement with a financial institution to sell certain U.S. accounts receivable on a non-recourse basis. The Company utilizes this arrangement as an integral part of financing working capital. Under the terms of the agreement, the Company receives cash proceeds and retains no rights or interest and has no obligations with respect to the sold receivables. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreement transfers effective control over and risk related to the receivables to the buyer. Under this arrangement, the Company derecognized $31.5 million and $29.7 million of accounts receivable during the periods ending March 31, 2018 and March 31, 2017, respectively. The loss incurred on sold receivables in the consolidated results of operations for the three months ended March 31, 2018 and 2017 was not material. The Company does not carry any servicing assets or liabilities. Cash proceeds from this arrangement are reflected as operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows.

Nature of Operations and Basis

Nature of Operations and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2018
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”). Hamilton Beach Holding is an operating holding company for two separate businesses. The Company includes the required intercompany eliminations between the two separate businesses and certain federal tax attributes. Costs incurred as a stand-alone public entity are allocated to the HBB segment. The only material assets held by Hamilton Beach Holding are its investments in consolidated subsidiaries, and substantially all of its cash flows are provided by dividends paid or distributions made by its subsidiaries. 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 segment. Hamilton Beach Brands, Inc. (“HBB”) is a leading designer, marketer and distributor of branded, small 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 in outlet and traditional malls throughout the United States. 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 for periods prior to the spin-off have been calculated based upon the number of shares distributed in the spin-off. NACCO did not receive any proceeds from the spin-off.
Basis of Presentation	Basis of Presentation 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 March 31, 2018 and the results of its operations, comprehensive income (loss), cash flows and changes in equity for the three months ended March 31, 2018 and 2017 have been included. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The balance sheet at December 31, 2017 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 months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2018. 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 Adopted and Not Yet Adopted	Accounting Standards Adopted In May 2014, the FASB codified in ASC 606, "Revenue Recognition - Revenue from Contracts with Customers" ("ASC 606"), which supersedes ASC 605, "Revenue Recognition" ("ASC 605"), 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 has adopted the guidance for all contracts at the date of initial application of January 1, 2018. The amount and timing of revenue recognition is not materially impacted by the new standard, thus no cumulative adjustment was recognized upon adoption. See Note 3 for further discussion on the nature, amount and timing of revenue and cash flows arising from contracts with customers. In February 2018, the FASB issued ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220)". The guidance in ASU 2018-02 allows an entity to elect to reclassify the stranded tax effects related to the Tax Cuts and Jobs Act (the "Tax Act") of 2017 from accumulated other comprehensive income ("AOCI") into retained earnings. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company elected to early adopt ASU 2018-02 as of January 1, 2018. As a result of adopting this standard, the Company reclassified $1.2 million from AOCI to retained earnings. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is planning to adopt ASU 2016-02 for its fiscal year ending December 31, 2020 and is currently evaluating to what extent ASU 2016-02 will affect the Company's financial position, results of operations, cash flows and related disclosures.

Revenues (Tables)

Revenues (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue Recognition and Deferred Revenue [Abstract]
Disaggregation of Revenue	The following table presents the Company's revenues on a disaggregated basis for the three months ending March 31, 2018: HBB KC Consolidated (1) Type of good or service: Products $ 124,581 $ 22,100 $ 145,800 Licensing 833 — 833 Total revenues $ 125,414 $ 22,100 $ 146,633 (1) Includes the required intercompany eliminations between HBB and KC.

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories are summarized as follows: MARCH 31 DECEMBER 31 MARCH 31 Sourced inventories - HBB $ 132,749 $ 111,493 $ 98,483 Retail inventories - KC 24,873 23,251 31,244 Total inventories $ 157,622 $ 134,744 $ 129,727

Fair Value Disclosure (Tables)

Fair Value Disclosure (Tables)	3 Months Ended
	Mar. 31, 2018
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) March 31, 2018 Assets: Interest rate swap agreements $ 1,422 $ — $ 1,422 $ — Foreign currency exchange contracts 265 — 265 — $ 1,687 $ — $ 1,687 $ — Liabilities: Foreign currency exchange contracts $ 212 $ — $ 212 $ — $ 212 $ — $ 212 $ — December 31, 2017 Assets: Interest rate swap agreements $ 894 $ — $ 894 $ — Foreign currency exchange contracts 245 — 245 — $ 1,139 $ — $ 1,139 $ — Liabilities: Foreign currency exchange contracts $ 93 $ — $ 93 $ — $ 93 $ — $ 93 $ — March 31, 2017 Assets: Interest rate swap agreements $ 802 $ — $ 802 $ — Foreign currency exchange contracts 27 — 27 $ — $ 829 $ — $ 829 $ — Liabilities: Interest rate swap agreements $ 489 $ — $ 489 $ — $ 489 $ — $ 489 $ —

Business Segments (Tables)

Business Segments (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Segment Reporting Information	THREE MONTHS ENDED MARCH 31 2018 2017 Revenues HBB $ 125,414 $ 114,154 KC 22,100 26,665 Eliminations (881 ) (537 ) Total $ 146,633 $ 140,282 Operating profit (loss) HBB $ 3,993 $ 782 KC (4,304 ) (3,279 ) Eliminations (26 ) 59 Total $ (337 ) $ (2,438 ) Net income (loss) HBB $ 2,802 $ 689 KC (3,638 ) (2,143 ) Eliminations 418 97 Total $ (418 ) $ (1,357 )

Nature of Operations and Basi23

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

Recently Issued Accounting St24

Recently Issued Accounting Standards (Details) $ in Millions	3 Months Ended
	Mar. 31, 2018USD ($)
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Amount reclassified from AOCI to retained earnings	$ 1.2

Revenues (Details)

Revenues (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	$ 146,633
Products
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	145,800
Licensing
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	833
HBB
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	125,414
HBB | Products
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	124,581
HBB | Licensing
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	833
KC
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	22,100
KC | Products
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	22,100
KC | Licensing
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	$ 0

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Inventory Disclosure [Abstract]
Sourced inventories - HBB	$ 132,749	$ 111,493	$ 98,483
Retail inventories - KC	24,873	23,251	31,244
Total inventories	$ 157,622	$ 134,744	$ 129,727

Fair Value Disclosure (On a Rec

Fair Value Disclosure (On a Recurring Basis) (Details) - Fair value measurements, recurring - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Assets:
Interest rate swap agreements	$ 1,422	$ 894	$ 802
Foreign currency exchange contracts	265	245	27
Assets at fair value	1,687	1,139	829
Liabilities:
Foreign currency exchange contracts	212	93
Interest rate swap agreements			489
Liabilities at fair value	212	93	489
Level 1
Assets:
Interest rate swap agreements	0	0	0
Foreign currency exchange contracts	0	0	0
Assets at fair value	0	0	0
Liabilities:
Foreign currency exchange contracts	0	0
Interest rate swap agreements			0
Liabilities at fair value	0	0	0
Level 2
Assets:
Interest rate swap agreements	1,422	894	802
Foreign currency exchange contracts	265	245	27
Assets at fair value	1,687	1,139	829
Liabilities:
Foreign currency exchange contracts	212	93
Interest rate swap agreements			489
Liabilities at fair value	212	93	489
Level 3
Assets:
Interest rate swap agreements	0	0	0
Foreign currency exchange contracts	0	0	0
Assets at fair value	0	0	0
Liabilities:
Foreign currency exchange contracts	0	0
Interest rate swap agreements			0
Liabilities at fair value	$ 0	$ 0	$ 0

Contingencies (Narrative) (Deta

Contingencies (Narrative) (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Loss Contingencies [Line Items]
Accrual for environmental investigation and remediation activities	$ 8,700,000	$ 8,900,000	$ 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
	Mar. 31, 2018	Mar. 31, 2017
Segment Reporting Information [Line Items]
Revenues	$ 146,633	$ 140,282
Operating profit (loss)	(337)	(2,438)
Net income (loss)	(418)	(1,357)
Operating segments | HBB
Segment Reporting Information [Line Items]
Revenues	125,414	114,154
Operating profit (loss)	3,993	782
Net income (loss)	2,802	689
Operating segments | KC
Segment Reporting Information [Line Items]
Revenues	22,100	26,665
Operating profit (loss)	(4,304)	(3,279)
Net income (loss)	(3,638)	(2,143)
Eliminations
Segment Reporting Information [Line Items]
Revenues	(881)	(537)
Operating profit (loss)	(26)	59
Net income (loss)	$ 418	$ 97

Income Taxes (Details)

Income Taxes (Details)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Effective income tax rate	25.90%	37.50%

Transfer of Financial Assets (D

Transfer of Financial Assets (Details) - USD ($) $ in Millions	Mar. 31, 2018	Mar. 31, 2017
Transfers and Servicing [Abstract]
Accounts receivable derecognized	$ 31.5	$ 29.7