Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 28, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38214 | |
Entity Registrant Name | HAMILTON BEACH BRANDS HOLDING COMPANY | |
Entity Incorporation, State or Country Code | DE | |
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 | |
Title of 12(b) Security | Class A Common Stock, Par Value $0.01 Per Share | |
Trading Symbol | HBB | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001709164 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common stock | ||
Entity Information [Line Items] | ||
Shares Outstanding (in shares) | 10,411,349 | |
Class B Common stock | ||
Entity Information [Line Items] | ||
Shares Outstanding (in shares) | 3,627,946 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Current assets | |||
Cash and cash equivalents | $ 2,071 | $ 928 | $ 701 |
Trade receivables, net | 89,898 | 115,135 | 99,723 |
Inventory | 137,224 | 156,038 | 228,353 |
Prepaid expenses and other current assets | 13,793 | 12,643 | 13,105 |
Total current assets | 242,986 | 284,744 | 341,882 |
Property, plant and equipment, net | 27,241 | 27,830 | 28,680 |
Right-of-use lease assets | 41,546 | 44,000 | 45,238 |
Goodwill | 6,253 | 6,253 | 6,253 |
Other intangible assets, net | 1,392 | 1,492 | 1,592 |
Deferred income taxes | 2,853 | 3,117 | 1,364 |
Deferred costs | 14,419 | 14,348 | 19,411 |
Other non-current assets | 6,687 | 7,166 | 5,509 |
Total assets | 343,377 | 388,950 | 449,929 |
Current liabilities | |||
Accounts payable | 84,098 | 61,759 | 121,552 |
Accrued compensation | 7,729 | 11,310 | 7,376 |
Accrued product returns | 5,605 | 6,474 | 5,286 |
Lease liabilities | 6,088 | 5,875 | 5,417 |
Other current liabilities | 11,980 | 16,150 | 12,249 |
Total current liabilities | 115,500 | 101,568 | 151,880 |
Revolving credit agreements | 59,911 | 110,895 | 127,003 |
Lease liabilities, non-current | 44,480 | 46,801 | 48,641 |
Other long-term liabilities | 5,120 | 5,152 | 5,603 |
Total liabilities | 225,011 | 264,416 | 333,127 |
Stockholders' equity | |||
Capital in excess of par value | 66,765 | 65,008 | 63,390 |
Treasury stock | (9,514) | (8,939) | (7,600) |
Retained earnings | 72,563 | 80,238 | 70,145 |
Accumulated other comprehensive loss | (11,595) | (11,918) | (9,278) |
Total stockholders' equity | 118,366 | 124,534 | 116,802 |
Total liabilities and stockholders' equity | 343,377 | 388,950 | 449,929 |
Class A Common stock | |||
Stockholders' equity | |||
Common stock | 111 | 107 | 106 |
Class B Common stock | |||
Stockholders' equity | |||
Common stock | $ 36 | $ 38 | $ 39 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 137,109 | $ 147,527 | $ 265,361 | $ 293,878 |
Cost of sales | 109,693 | 115,549 | 217,035 | 233,670 |
Gross profit | 27,416 | 31,978 | 48,326 | 60,208 |
Selling, general and administrative expenses | 26,640 | 26,503 | 52,559 | 41,936 |
Amortization of intangible assets | 50 | 50 | 100 | 100 |
Operating profit (loss) | 726 | 5,425 | (4,333) | 18,172 |
Interest expense, net | 773 | 867 | 2,042 | 1,600 |
Other expense (income), net | (271) | (252) | (255) | 1,214 |
Income (loss) before income taxes | 224 | 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 earnings (loss) per share (in dollars per share) | $ 0.01 | $ 0.36 | $ (0.33) | $ 0.87 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.01 | $ 0.36 | $ (0.33) | $ 0.87 |
Basic weighted average shares outstanding (in shares) | 14,081 | 14,068 | 14,077 | 14,065 |
Diluted weighted average shares outstanding (in shares) | 14,110 | 14,095 | 14,077 | 14,093 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 110 | $ 5,089 | $ (4,667) | $ 12,262 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustment | 410 | (926) | 479 | (2,116) |
(Loss) gain on long-term intra-entity foreign currency transactions | 201 | 140 | 653 | 1,598 |
Cash flow hedging activity | (25) | 1,368 | (1,462) | 3,421 |
Reclassification of foreign currency adjustments into earnings | 0 | 0 | 0 | 2,085 |
Reclassification of hedging activities into earnings | 342 | (35) | 529 | (132) |
Reclassification of pension adjustments into earnings | 60 | 84 | 124 | 109 |
Total other comprehensive income (loss), net of tax | 988 | 631 | 323 | 4,965 |
Comprehensive income (loss) | $ 1,098 | $ 5,720 | $ (4,344) | $ 17,227 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
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 amortization | 2,128 | 2,465 |
Deferred income taxes | 0 | 1,533 |
Stock compensation expense | 1,759 | 1,806 |
Brazil foreign currency loss | 0 | 2,085 |
Other | (611) | 223 |
Net changes in operating assets and liabilities: | ||
Trade receivables | 26,393 | 19,846 |
Inventory | 20,390 | (45,714) |
Other assets | 396 | 3,383 |
Accounts payable | 22,240 | (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) | 0 |
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 cash | 182 | (36) |
Cash, cash equivalents and restricted cash | ||
Increase (decrease) for the period | 1,165 | (426) |
Balance at the beginning of the period | 1,905 | 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 assets | 63 | 62 |
Restricted cash included in other non-current assets | 936 | 961 |
Total cash, cash equivalents, and restricted cash | $ 3,070 | $ 1,724 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Thousands | Total | Capital in Excess of Par Value | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Class A Common stock Common Stock | Class B Common stock Common Stock |
Beginning balance at Dec. 31, 2021 | $ 102,279 | $ 61,586 | $ (5,960) | $ 60,753 | $ (14,243) | $ 103 | $ 40 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 7,173 | 7,173 | |||||
Issuance of common stock, net of conversions | 0 | (1) | 2 | (1) | |||
Share-based compensation expense | 764 | 764 | |||||
Cash dividends | (1,392) | (1,392) | |||||
Other comprehensive income (loss), net of tax | 2,321 | 2,321 | |||||
Reclassification adjustment to net income (loss) | 2,013 | 2,013 | |||||
Ending balance at Mar. 31, 2022 | 113,158 | 62,349 | (5,960) | 66,534 | (9,909) | 105 | 39 |
Beginning balance at Dec. 31, 2021 | 102,279 | 61,586 | (5,960) | 60,753 | (14,243) | 103 | 40 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 12,262 | ||||||
Purchase of treasury stock | (1,600) | ||||||
Ending balance at Jun. 30, 2022 | 116,802 | 63,390 | (7,600) | 70,145 | (9,278) | 106 | 39 |
Beginning balance at Dec. 31, 2021 | 102,279 | 61,586 | (5,960) | 60,753 | (14,243) | 103 | 40 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Purchase of treasury stock | (3,000) | ||||||
Ending balance at Dec. 31, 2022 | 124,534 | 65,008 | (8,939) | 80,238 | (11,918) | 107 | 38 |
Beginning balance at Mar. 31, 2022 | 113,158 | 62,349 | (5,960) | 66,534 | (9,909) | 105 | 39 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 5,089 | 5,089 | |||||
Issuance of common stock, net of conversions | 0 | (1) | 1 | ||||
Purchase of treasury stock | (1,640) | (1,640) | |||||
Share-based compensation expense | 1,042 | 1,042 | |||||
Cash dividends | (1,478) | (1,478) | |||||
Other comprehensive income (loss), net of tax | 582 | 582 | |||||
Reclassification adjustment to net income (loss) | 49 | 49 | |||||
Ending balance at Jun. 30, 2022 | 116,802 | 63,390 | (7,600) | 70,145 | (9,278) | 106 | 39 |
Beginning balance at Dec. 31, 2022 | 124,534 | 65,008 | (8,939) | 80,238 | (11,918) | 107 | 38 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (4,777) | (4,777) | |||||
Issuance of common stock, net of conversions | 0 | (2) | 4 | (2) | |||
Share-based compensation expense | 797 | 797 | |||||
Cash dividends | (1,460) | (1,460) | |||||
Other comprehensive income (loss), net of tax | (916) | (916) | |||||
Reclassification adjustment to net income (loss) | 251 | 251 | |||||
Ending balance at Mar. 31, 2023 | 118,429 | 65,803 | (8,939) | 74,001 | (12,583) | 111 | 36 |
Beginning balance at Dec. 31, 2022 | 124,534 | 65,008 | (8,939) | 80,238 | (11,918) | 107 | 38 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (4,667) | ||||||
Purchase of treasury stock | (600) | ||||||
Ending balance at Jun. 30, 2023 | 118,366 | 66,765 | (9,514) | 72,563 | (11,595) | 111 | 36 |
Beginning balance at Mar. 31, 2023 | 118,429 | 65,803 | (8,939) | 74,001 | (12,583) | 111 | 36 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 110 | 110 | |||||
Purchase of treasury stock | (575) | (575) | |||||
Share-based compensation expense | 962 | 962 | |||||
Cash dividends | (1,548) | (1,548) | |||||
Other comprehensive income (loss), net of tax | 586 | 586 | |||||
Reclassification adjustment to net income (loss) | 402 | 402 | |||||
Ending balance at Jun. 30, 2023 | $ 118,366 | $ 66,765 | $ (9,514) | $ 72,563 | $ (11,595) | $ 111 | $ 36 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends (in dollars per share) | $ 0.11 | $ 0.105 | $ 0.105 | $ 0.10 |
Basis of Presentation and Recen
Basis of Presentation and Recently Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Recently Issued Accounting Standards | Basis of Presentation and Recently Issued Accounting Standards Basis of Presentation Hamilton Beach Brands Holding Company is a holding company and operates through its wholly-owned subsidiary, Hamilton Beach Brands, Inc. (“HBB”) (collectively “Hamilton Beach Holding” or the “Company”). HBB is 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. HBB operates in the consumer, commercial and specialty small appliance markets. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. These 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, 2022. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the remainder of the year due to the highly seasonal nature of the Company's primary markets. A majority of revenue and operating profit typically occurs in the second half of the calendar year when sales of products to retailers and consumers historically increase significantly for the fall holiday-selling season. Accounting Standards 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. The Company previously qualified as an emerging growth company and elected to use the extended transition period for complying with new and revised financial accounting standards. The amendments were effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. On January 1, 2022, the Company adopted Topic 842. The impacts of the adoption were reflected in the Annual Report on Form 10-K for the year ended December 31, 2022. The Company lost the emerging growth company status as of December 31, 2022, the last day of the fiscal year following the fifth anniversary of our spin-off from NACCO Industries, Inc. The Consolidated Balance Sheet as of June 30, 2022 and the Consolidated Statement of Cash Flows for the six months ended June 30, 2022 have been revised to reflect the Company's adoption of Topic 842 on January 1, 2022. U.S. Pension Plan Termination In the second quarter of 2022, the Company began the process of terminating its U.S. defined benefit pension plan (the "Plan"), which could take up to an estimated 24 months to complete. Benefit obligations under the Plan will be settled through a combination of lump sum payments to eligible plan participants and the purchase of a group annuity contract, under which future benefit obligations will be transferred to a third-party insurance company. The Plan continues to be overfunded and t he Company expects that there will be no further required minimum contributions to the Plan. We currently expect that all surplus assets remaining after the Plan termination will be transferred to a qualified replacement plan. The deferred loss within Accumulated Other Comprehensive Income will be fully recognized when the plan is terminated or as settlements occur, which would trigger accelerated recognition. |
Transfer of Financial Assets
Transfer of Financial Assets | 6 Months Ended |
Jun. 30, 2023 | |
Transfers and Servicing [Abstract] | |
Transfer of Financial Assets | Transfer of Financial Assets HBB has entered into an arrangement with a financial institution to sell certain U.S. trade receivables on a non-recourse basis. HBB utilizes this arrangement as an integral part of financing working capital. Under the terms of the agreement, HBB 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 sold receivables which result in a reduction in trade receivables because the agreement transfers effective control over and risk related to the receivables to the buyer. Under this arrangement, HBB derecognized $29.6 million and $59.3 million of trade receivables during the three and six months ending June 30, 2023, respectively, $24.7 million and $52.3 million of trade receivables during the three and six months ending June 30, 2022, respectively, and $118.5 million during the year ending December 31, 2022. The loss incurred on sold receivables in the consolidated results of operations for the three and six months ended June 30, 2023 and 2022 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 Consolidated Statements of Cash Flows. |
Fair Value Disclosure
Fair Value Disclosure | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosure | Fair Value Disclosure The following table presents the Company's assets and liabilities accounted for at fair value on a recurring basis: Description Balance Sheet Location JUNE 30 DECEMBER 31 JUNE 30 Assets: Interest rate swap agreements Current Prepaid expenses and other current assets $ 1,067 $ 837 $ 685 Long-term Other non-current assets 4,153 4,539 2,883 Foreign currency exchange contracts Current Prepaid expenses and other current assets — 174 79 $ 5,220 $ 5,550 $ 3,647 Liabilities: Foreign currency exchange contracts Current Other current liabilities 807 101 154 $ 807 $ 101 $ 154 The Company measures its derivatives at fair value using significant observable inputs, which is Level 2 as defined in the fair value hierarchy. The Company uses a present value technique that incorporates the Secured Overnight Financing Rate ("SOFR") swap curve, foreign currency spot rates and foreign currency forward rates to value its derivatives, including its interest rate swap agreements and foreign currency exchange contracts, and also incorporates the effect of its subsidiary and counterparty credit risk into the valuation. Other Fair Value Measurement Disclosures The carrying amounts of cash and cash equivalents, trade receivables and accounts payable approximate fair value due to the short-term maturities of these instruments. The fair value of the revolving credit agreement, including book overdrafts, which approximate book value, was determined using current rates offered for similar obligations taking into account subsidiary credit risk, which is Level 2 as defined in the fair value hierarchy. There were no transfers into or out of Levels 1, 2, or 3 during the three and six months ended June 30, 2023. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Capital Stock The following table sets forth the Company's authorized capital stock information: JUNE 30 DECEMBER 31 JUNE 30 Preferred stock, par value $0.01 per share Preferred stock authorized 5,000 5,000 5,000 Preferred stock outstanding — — — Class A Common stock, par value $0.01 per share Class A Common authorized 70,000 70,000 70,000 Class A Common issued (1)(2) 11,094 10,663 10,592 Treasury Stock 683 626 516 Class B Common stock, par value $0.01 per share, convertible into Class A Common stock on a one-for-one basis Class B Common authorized 30,000 30,000 30,000 Class B Common issued (1) 3,629 3,844 3,865 (1) Class B Common converted to Class A Common were 0 and 215 shares during the three and six months ending June 30, 2023, respectively, and 4 and 135 during the three and six months ending June 30, 2022. (2) The Company issued Class A Common of 24 and 216 shares during the three and six months ending June 30, 2023, respectively, and 22 and 190 shares during the three and six months ending June 30, 2022. Stock Repurchase Program: In February 2022, the Company's Board approved a stock repurchase program for the purchase of up to $25 million of the Company's Class A Common outstanding starting February 22, 2022 and ending December 31, 2023. During the three and six months ended June 30, 2023, the Company repurchased 56,973 shares at prevailing market prices for an aggregate purchase price of $0.6 million. During the three and six months ended June 30, 2022, the Company repurchased 151,221 shares at prevailing market prices for an aggregate purchase price of $1.6 million. During the year ended December 31, 2022, the Company repurchased 261,049 shares for an aggregate purchase price of $3.0 million. As of June 30, 2023, the Company had $21.4 million remaining authorized for repurchase. Accumulated Other Comprehensive Loss: The following table summarizes changes in accumulated other comprehensive loss by component and related tax effects for periods shown: Foreign Currency Deferred Gain (Loss) on Cash Flow Hedging Pension Plan Adjustment Total Balance, January 1, 2023 $ (8,924) $ 4,158 $ (7,152) $ (11,918) Other comprehensive income (loss) 715 (1,881) — (1,166) Reclassification adjustment to net income (loss) — 252 87 339 Tax effects (194) 379 (23) 162 Balance, March 31, 2023 (8,403) 2,908 (7,088) (12,583) Other comprehensive income (loss) 425 (59) — 366 Reclassification adjustment to net income (loss) — 465 83 548 Tax effects 186 (89) (23) 74 Balance, June 30, 2023 $ (7,792) $ 3,225 $ (7,028) $ (11,595) Balance, January 1, 2022 $ (9,877) $ (638) $ (3,728) $ (14,243) Other comprehensive income (loss) 359 2,691 — 3,050 Reclassification adjustment to net income (loss) 1,267 (126) 50 1,191 Tax effects 727 (609) (25) 93 Balance, March 31, 2022 (7,524) 1,318 (3,703) (9,909) Other comprehensive income (loss) (726) 1,789 — 1,063 Reclassification adjustment to net income (loss) — (49) 109 60 Tax effects (60) (407) (25) (492) Balance, June 30, 2022 $ (8,310) $ 2,651 $ (3,619) $ (9,278) |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue is 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, which includes an estimate for variable consideration. 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 HBB products are not sold with a general right of return. However, based on historical experience, a portion of products sold are estimated to be returned due to reasons such as product failure and excess inventory stocked by the customer, which, subject to certain terms and conditions, HBB will agree to accept. Product returns, customer programs and incentive offerings, including special pricing agreements, price competition, promotions, and other volume-based incentives are accounted for as variable consideration. A description of revenue sources and performance obligations for HBB are as follows: Consumer and Commercial product revenue Transactions with both consumer and commercial 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 revenue 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 a product is shipped from the Company's facility, or delivered to customers, depending on the shipping terms. The amount of revenue recognized varies primarily with price concessions and changes in returns. The Company offers price concessions to our customers for incentive offerings, special pricing agreements, price competition, promotions or other volume-based arrangements. The Company evaluated such agreements with our customers and determined returns and price concessions should be accounted for as variable consideration. Consumer product revenue consists of sales of small electric household and specialty housewares appliances to traditional brick and mortar and ecommerce retailers, distributors and directly to the end consumer. A majority of this revenue is in North America. Commercial product revenue consists of sales of products for restaurants, fast-food chains, bars and hotels. Approximately one-half of our commercial sales is in the U.S. and the other half is in markets across the globe. License revenue From time to time, the Company enters into exclusive and non-exclusive licensing agreements which grant the right to use certain of HBB’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, trade names, patents, trade dress, logos and/or products (the “Licensed IP”). In exchange for granting the right to use the Licensed IP, HBB 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. HBB recognizes revenue at the later of when the subsequent sales occur or when the performance obligation is satisfied (over time). The following table sets forth Company's revenue on a disaggregated basis for the three and six months ended June 30: THREE MONTHS ENDED SIX MONTHS ENDED 2023 2022 2023 2022 Type of good or service: Consumer products $ 122,561 $ 130,698 $ 235,993 $ 260,458 Commercial products 13,671 15,092 27,075 30,172 Licensing 877 1,737 2,293 3,248 Total revenues $ 137,109 $ 147,527 $ 265,361 $ 293,878 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved in various legal and regulatory proceedings and claims that have arisen in the ordinary course of business, including product liability, patent infringement, asbestos related claims, environmental and other claims. Although it is difficult to predict the ultimate outcome of these proceedings and claims, the Company believes the ultimate disposition of these matters will not have a material adverse effect on the financial condition, results of operation or cash flows of the Company. Any costs that the Company 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. Proceedings and claims asserted against the Company 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 for 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 current estimates may differ materially from original estimates. At June 30, 2023, December 31, 2022, and June 30, 2022, HBB had accrued undiscounted obligations of $3.5 million, $3.2 million and $3.4 million, respectively, for environmental investigation and remediation activities. HBB estimates that it is reasonably possible that it may incur additional expenses in the range of zero to $1.4 million related to the environmental investigation and remediation at these sites. As of June 30, 2023, HBB has $1.0 million, classified as restricted cash, associated with reimbursement of environmental investigation and remediation costs from a responsible party in exchange for release from all future obligations for one site. Additionally, HBB has a $1.1 million asset associated with the reimbursement of costs associated with two sites. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The effective tax rate on income was 50.9% and (5.8)% for three months ended June 30, 2023 and June 30, 2022, respectively. The effective tax rate was higher in the three months ended June 30, 2023 due to a discrete benefit from the reversal of interest and penalties on unrecognized tax benefits in the prior year that did not recur and a discrete expense in the current year for state income tax. |
Basis of Presentation and Rec_2
Basis of Presentation and Recently Issued Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Hamilton Beach Brands Holding Company is a holding company and operates through its wholly-owned subsidiary, Hamilton Beach Brands, Inc. (“HBB”) (collectively “Hamilton Beach Holding” or the “Company”). HBB is 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. HBB operates in the consumer, commercial and specialty small appliance markets. The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. These 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, 2022. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the remainder of the year due to the highly seasonal nature of the Company's primary markets. A majority of revenue and operating profit typically occurs in the second half of the calendar year when sales of products to retailers and consumers historically increase significantly for the fall holiday-selling season. |
Accounting Standards Adopted | Accounting Standards 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. The Company previously qualified as an emerging growth company and elected to use the extended transition period for complying with new and revised financial accounting standards. The amendments were effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. On January 1, 2022, the Company adopted Topic 842. The impacts of the adoption were reflected in the Annual Report on Form 10-K for the year ended December 31, 2022. The Company lost the emerging growth company status as of December 31, 2022, the last day of the fiscal year following the fifth anniversary of our spin-off from NACCO Industries, Inc. The Consolidated Balance Sheet as of June 30, 2022 and the Consolidated Statement of Cash Flows for the six months ended June 30, 2022 have been revised to reflect the Company's adoption of Topic 842 on January 1, 2022. |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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: Description Balance Sheet Location JUNE 30 DECEMBER 31 JUNE 30 Assets: Interest rate swap agreements Current Prepaid expenses and other current assets $ 1,067 $ 837 $ 685 Long-term Other non-current assets 4,153 4,539 2,883 Foreign currency exchange contracts Current Prepaid expenses and other current assets — 174 79 $ 5,220 $ 5,550 $ 3,647 Liabilities: Foreign currency exchange contracts Current Other current liabilities 807 101 154 $ 807 $ 101 $ 154 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Capital Stock | The following table sets forth the Company's authorized capital stock information: JUNE 30 DECEMBER 31 JUNE 30 Preferred stock, par value $0.01 per share Preferred stock authorized 5,000 5,000 5,000 Preferred stock outstanding — — — Class A Common stock, par value $0.01 per share Class A Common authorized 70,000 70,000 70,000 Class A Common issued (1)(2) 11,094 10,663 10,592 Treasury Stock 683 626 516 Class B Common stock, par value $0.01 per share, convertible into Class A Common stock on a one-for-one basis Class B Common authorized 30,000 30,000 30,000 Class B Common issued (1) 3,629 3,844 3,865 (1) Class B Common converted to Class A Common were 0 and 215 shares during the three and six months ending June 30, 2023, respectively, and 4 and 135 during the three and six months ending June 30, 2022. (2) The Company issued Class A Common of 24 and 216 shares during the three and six months ending June 30, 2023, respectively, and 22 and 190 shares during the three and six months ending June 30, 2022. |
Schedule of Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss: The following table summarizes changes in accumulated other comprehensive loss by component and related tax effects for periods shown: Foreign Currency Deferred Gain (Loss) on Cash Flow Hedging Pension Plan Adjustment Total Balance, January 1, 2023 $ (8,924) $ 4,158 $ (7,152) $ (11,918) Other comprehensive income (loss) 715 (1,881) — (1,166) Reclassification adjustment to net income (loss) — 252 87 339 Tax effects (194) 379 (23) 162 Balance, March 31, 2023 (8,403) 2,908 (7,088) (12,583) Other comprehensive income (loss) 425 (59) — 366 Reclassification adjustment to net income (loss) — 465 83 548 Tax effects 186 (89) (23) 74 Balance, June 30, 2023 $ (7,792) $ 3,225 $ (7,028) $ (11,595) Balance, January 1, 2022 $ (9,877) $ (638) $ (3,728) $ (14,243) Other comprehensive income (loss) 359 2,691 — 3,050 Reclassification adjustment to net income (loss) 1,267 (126) 50 1,191 Tax effects 727 (609) (25) 93 Balance, March 31, 2022 (7,524) 1,318 (3,703) (9,909) Other comprehensive income (loss) (726) 1,789 — 1,063 Reclassification adjustment to net income (loss) — (49) 109 60 Tax effects (60) (407) (25) (492) Balance, June 30, 2022 $ (8,310) $ 2,651 $ (3,619) $ (9,278) |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table sets forth Company's revenue on a disaggregated basis for the three and six months ended June 30: THREE MONTHS ENDED SIX MONTHS ENDED 2023 2022 2023 2022 Type of good or service: Consumer products $ 122,561 $ 130,698 $ 235,993 $ 260,458 Commercial products 13,671 15,092 27,075 30,172 Licensing 877 1,737 2,293 3,248 Total revenues $ 137,109 $ 147,527 $ 265,361 $ 293,878 |
Basis of Presentation and Rec_3
Basis of Presentation and Recently Issued Accounting Standards (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Outstanding payment obligations | $ 48.8 | $ 23.3 | $ 52.1 |
United States | Pension Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum termination and settlement period | 24 months |
Transfer of Financial Assets (D
Transfer of Financial Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Transfers and Servicing [Abstract] | |||||
Accounts receivable derecognized | $ 29.6 | $ 24.7 | $ 59.3 | $ 52.3 | $ 118.5 |
Loss on sale of accounts receivable | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Disclosure (Details)
Fair Value Disclosure (Details) - Fair value measurements, recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Assets: | |||
Assets at fair value | $ 5,220 | $ 5,550 | $ 3,647 |
Liabilities: | |||
Liabilities at fair value | 807 | 101 | 154 |
Prepaid expenses and other current assets | |||
Assets: | |||
Interest rate swap agreements | 1,067 | 837 | 685 |
Foreign currency exchange contracts | 0 | 174 | 79 |
Other non-current assets | |||
Assets: | |||
Interest rate swap agreements | 4,153 | 4,539 | 2,883 |
Other current liabilities | |||
Liabilities: | |||
Foreign currency exchange contracts | $ 807 | $ 101 | $ 154 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Capital Stock (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 $ / shares shares | Jun. 30, 2022 $ / shares shares | Jun. 30, 2023 $ / shares shares | Jun. 30, 2022 $ / shares shares | Dec. 31, 2022 $ / shares shares | |
Class of Stock [Line Items] | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock outstanding (in shares) | 0 | 0 | 0 | 0 | 0 |
Class A Common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 70,000,000 | 70,000,000 | 70,000,000 | 70,000,000 | 70,000,000 |
Common stock issued (in shares) | 11,094,000 | 10,592,000 | 11,094,000 | 10,592,000 | 10,663,000 |
Treasury Stock (in shares) | 683,000 | 516,000 | 626,000 | ||
Class A Common shares issued (in shares) | 24,000 | 22,000 | 216,000 | 190,000 | |
Class B Common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, convertible conversion ratio | 1 | 1 | 1 | 1 | 1 |
Common stock authorized (in shares) | 30,000,000 | 30,000,000 | 30,000,000 | 30,000,000 | 30,000,000 |
Common stock issued (in shares) | 3,629,000 | 3,865,000 | 3,629,000 | 3,865,000 | 3,844,000 |
Class B Common converted to Class A Common (in shares) | 0 | 4,000 | 215,000 | 135,000 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Feb. 28, 2022 | |
Class of Stock [Line Items] | ||||||
Stock repurchased (in shares) | 56,973 | 151,221 | 56,973 | 151,221 | 261,049 | |
Aggregate purchase price | $ 575 | $ 1,640 | $ 600 | $ 1,600 | $ 3,000 | |
Remaining authorized repurchase amount | $ 21,400 | $ 21,400 | ||||
Shares Outstanding Class A | ||||||
Class of Stock [Line Items] | ||||||
Stock repurchase program, number of shares authorized to be repurchased | 25,000,000 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 118,429 | $ 124,534 | $ 113,158 | $ 102,279 |
Other comprehensive income (loss) | 366 | (1,166) | 1,063 | 3,050 |
Reclassification adjustment to net income (loss) | 548 | 339 | 60 | 1,191 |
Tax effects | 74 | 162 | (492) | 93 |
Ending balance | 118,366 | 118,429 | 116,802 | 113,158 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (12,583) | (11,918) | (9,909) | (14,243) |
Ending balance | (11,595) | (12,583) | (9,278) | (9,909) |
Foreign Currency | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (8,403) | (8,924) | (7,524) | (9,877) |
Other comprehensive income (loss) | 425 | 715 | (726) | 359 |
Reclassification adjustment to net income (loss) | 0 | 0 | 0 | 1,267 |
Tax effects | 186 | (194) | (60) | 727 |
Ending balance | (7,792) | (8,403) | (8,310) | (7,524) |
Deferred Gain (Loss) on Cash Flow Hedging | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 2,908 | 4,158 | 1,318 | (638) |
Other comprehensive income (loss) | (59) | (1,881) | 1,789 | 2,691 |
Reclassification adjustment to net income (loss) | 465 | 252 | (49) | (126) |
Tax effects | (89) | 379 | (407) | (609) |
Ending balance | 3,225 | 2,908 | 2,651 | 1,318 |
Pension Plan Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (7,088) | (7,152) | (3,703) | (3,728) |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Reclassification adjustment to net income (loss) | 83 | 87 | 109 | 50 |
Tax effects | (23) | (23) | (25) | (25) |
Ending balance | $ (7,028) | $ (7,088) | $ (3,619) | $ (3,703) |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 137,109 | $ 147,527 | $ 265,361 | $ 293,878 |
Consumer products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 122,561 | 130,698 | 235,993 | 260,458 |
Commercial products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 13,671 | 15,092 | $ 27,075 | 30,172 |
Commercial products | Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk, percentage | 50% | |||
Commercial products | Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | Non-US | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk, percentage | 50% | |||
Licensing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 877 | $ 1,737 | $ 2,293 | $ 3,248 |
Minimum | Other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Warranty term | 1 year | |||
Maximum | Electric appliances | ||||
Disaggregation of Revenue [Line Items] | ||||
Warranty term | 10 years | |||
Maximum | Other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Warranty term | 3 years | |||
Maximum | Consumer products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue contract duration | 1 year | |||
Maximum | Commercial products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue contract duration | 1 year |
Contingencies (Details)
Contingencies (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 USD ($) numberOfSite | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Loss Contingencies [Line Items] | |||
Accrual for environmental investigation and remediation activities | $ 3.5 | $ 3.2 | $ 3.4 |
Portion of loss contingency proceeds representing restricted cash | 1 | ||
Asset associated with reimbursement of costs | $ 1.1 | ||
Loss Contingency, Number Of Sites Associated With Cost Reimbursement | numberOfSite | 2 | ||
Minimum | |||
Loss Contingencies [Line Items] | |||
Estimate of additional expenses | $ 0 | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Estimate of additional expenses | $ 1.4 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate on loss, percent | 50.90% | (5.80%) | 23.70% | 20.20% |