# EDGAR Filing Document

**Accession Number:** 0001709164
**File Stem:** 0001709164-23-000017
**Filing Date:** 2023-3
**Character Count:** 36459
**Document Hash:** d3137576b7b05c358a247f59bb8d4eb9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001709164-23-000017.hdr.sgml**: 20230309

**ACCESSION NUMBER**: 0001709164-23-000017

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230309

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230309

**DATE AS OF CHANGE**: 20230309

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Hamilton Beach Brands Holding Co
- **CENTRAL INDEX KEY:** 0001709164
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC HOUSEWARES & FANS [3634]
- **IRS NUMBER:** 311236686
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38214
- **FILM NUMBER:** 23720107

**BUSINESS ADDRESS:**
- **STREET 1:** 4421 WATERFRONT DRIVE
- **CITY:** GLEN ALLEN
- **STATE:** VA
- **ZIP:** 23060
- **BUSINESS PHONE:** 804-273-9777

**MAIL ADDRESS:**
- **STREET 1:** 4421 WATERFRONT DRIVE
- **CITY:** GLEN ALLEN
- **STATE:** VA
- **ZIP:** 23060

?xml version="1.0" ? hbb-20230309

    

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, D.C. 20549** 

 **_______________________________________________________________________________________________________________________________________________________________________________________________________**

**FORM 8-K** 

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| |
|:---|
| **CURRENT REPORT** |
| **Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934** |

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| | | | |
|:---|:---|:---|:---|
| Date of Report (Date of earliest event reported): | Date of Report (Date of earliest event reported): | Date of Report (Date of earliest event reported): | March 9, 2023 |
| **HAMILTON BEACH BRANDS HOLDING COMPANY** | **HAMILTON BEACH BRANDS HOLDING COMPANY** | **HAMILTON BEACH BRANDS HOLDING COMPANY** | **HAMILTON BEACH BRANDS HOLDING COMPANY** |
| (Exact name of registrant as specified in its charter) | (Exact name of registrant as specified in its charter) | (Exact name of registrant as specified in its charter) | (Exact name of registrant as specified in its charter) |
| Delaware |  | 001-38214 | 31-1236686 |
| (State or other jurisdiction of incorporation) |  | (Commission File Number) | (IRS Employer Identification No.) |
| 4421 WATERFRONT DR | GLEN ALLEN | VA | 23060 |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) | (Zip code) |
|  | (804) | 273-9777 |  |
| (Registrant's telephone number, including area code) | (Registrant's telephone number, including area code) | (Registrant's telephone number, including area code) | (Registrant's telephone number, including area code) |
| N/A | N/A | N/A | N/A |
| (Former name or former address, if changed since last report) | (Former name or former address, if changed since last report) | (Former name or former address, if changed since last report) | (Former name or former address, if changed since last report) |

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| **Class A Common Stock, Par Value $0.01 Per Share** | **HBB** | **New York Stock Exchange** |

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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

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| | | |
|:---|:---|:---|
| Emerging growth company | ☐ | |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  | |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  | ☐ |

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**Item 2.02 Results of Operations and Financial Condition.**

&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;On March 9, 2023, Hamilton Beach Brands Holding Company (the "Company") issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2022. A copy of the press release is attached as Exhibit 99 to this Current Report on Form 8-K.

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

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

**Item 9.01 Financial Statements and Exhibits.**

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

&nbsp;&nbsp;&nbsp;&nbsp;

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| | |
|:---|:---|
| (d) <u>Exhibits</u> | |
| 99 | <u>[Hamilton Beach Brands Holding Company fourth quarter and year ended December 31, 2022 earnings release, dated March 9, 2023.](hbbhc123122earningsrelease.htm)</u> |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |

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**SIGNATURES**

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

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| | | | |
|:---|:---|:---|:---|
| Date: | <u>March 9, 2023</u> |  | HAMILTON BEACH BRANDS HOLDING COMPANY |
|  |  | By: | /s/ Linda Woermer |
|  |  | Name: | Linda Woermer |
|  |  | Title: | Senior Director, Controller of Hamilton Beach Brands, Inc. |

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## Ex-99

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| | |
|:---|:---|
| ![imagea.jpg](imagea.jpg) | ![testa01a.jpg](testa01a.jpg) |

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CONTACT:

Lou Anne J. Nabhan

Louanne.nabhan@hamiltonbeach.com

**For Immediate Release**

**<u>Thursday, March 9, 2023</u>**

**HAMILTON BEACH BRANDS HOLDING COMPANY ANNOUNCES**

 **<u>FOURTH QUARTER AND FULL YEAR 2022 RESULTS</u>**

Glen Allen, Virginia - Hamilton Beach Brands Holding Company (NYSE: HBB), which operates through its wholly-owned subsidiary Hamilton Beach Brands, Inc., today announced results for the fourth quarter and full year 2022.

**Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Q4 2022 revenue of $196.2 million was nearly flat to Q4 2021, as increased revenue in the global commercial, U.S. and Mexican consumer markets was offset by decreased revenue in the Latin American and Canadian markets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Q4 2022 operating profit was $11.3 million compared to $17.9 million in Q4 2021, reflecting short-term gross profit margin contraction, primarily due to holiday promotions, partially offset by lower SG&A expense

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Full-year 2022 revenue of $640.9 million, the second highest in the history of Hamilton Beach Brands, compared to a record $658.4 million in 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Full-year 2022 operating profit was $38.8 million, including a $10.0 million insurance recovery, compared to $31.5 million in 2021

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company effectively managed elevated inventory levels during the year and significantly reduced inventory and debt in Q4 2022

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Demand for small kitchen appliances in 2023 is expected to decrease moderately compared to 2022, especially in the first half of the year, as consumers continue to calibrate spending in response to inflation and economic concerns

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• For the full year 2023, Hamilton Beach Brands expects total revenue to be flat to 2022 and operating profit to increase, excluding the insurance recovery in 2022

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**Fourth Quarter 2022 Compared to Fourth Quarter 2021**

Total revenue of $196.2 million compared to $197.8 million in the fourth quarter of 2021. Lower unit volume was offset by higher prices and a favorable product mix. Revenue increased in the global commercial market and in the U.S. and Mexican consumer markets, while revenue decreased in the Latin American and Canadian consumer markets. Consumer revenue overall was below expectations due to softer than anticipated consumer pull-through and retailer reorders during the holiday selling season.

In the global commercial market, revenue increased $6.0 million, or 57.1%. This growth reflects a continued strong rebound in the food service and hospitality industries from pandemic-driven demand softness as well as the Company's new products, line extensions and sales initiatives. In the premium market, revenue increased 14.5%. Revenue in the ecommerce channel accounted for 44.9% of total revenue and increased 0.4%.

Gross profit was $34.1 million compared to $43.1 million. Gross profit margin was 17.4% compared to 21.8%. This short-term contraction was primarily due to holiday promotions offered in response to soft consumer consumption trends and other efforts to reduce inventory levels.

Selling, general and administrative expenses decreased to $22.8 million compared to $25.1 million, primarily due to lower environmental expense and lower expenses for temporary workers and outside services.

Operating profit was $11.3 million compared to $17.9 million.

Interest expense, net increased by $0.9 million to $1.7 million, due primarily to rising interest rates, as well as increased average borrowings outstanding under the Company's revolving credit facility.

Net income was $7.1 million, or $0.51 per diluted share, compared to net income of $12.6 million, or $0.90 per diluted share.

**Full Year 2022 Compared to Full Year 2021**

Total revenue of $640.9 million, the second highest in the history of Hamilton Beach Brands, decreased 2.6% compared to a record $658.4 million in 2021. Revenue in the global commercial market increased $20.5 million, or 50.0% and partially offset lower revenue in the Company's consumer markets.

The Company continued to make progress with its strategic initiatives in 2022. Revenue in the global commercial market accounted for 9.6% of total revenue. Revenue in the premium market increased 15.7% and accounted for 15.3% of total revenue. Revenue in the ecommerce channel accounted for 38.0% of total revenue and increased 2.8%.

Gross profit was $129.1 million compared to $136.5 million. Gross profit margin was 20.1% compared to 20.7%. Price increases implemented during 2022 partially offset higher costs.

Selling, general and administrative expenses were $90.1 million compared to $104.8 million. This change primarily reflected a $10.0 million insurance recovery recognized in the first quarter of 2022, a decrease in outside services, and the absence of incremental expense incurred in 2021 to relocate the Company's U.S. distribution center to a new facility.

Operating profit was $38.8 million compared to $31.5 million, including the $10.0 million insurance recovery.

Interest expense, net increased by $1.7 million, to $4.6 million, due primarily to rising interest rates, as well as increased average borrowings outstanding under the Company's revolving credit facility.

The effective tax rate was 22.1% compared to 26.4%. The current year amount reflected the favorable impact of reversing interest and penalties on unrecognized tax benefits that were included in the prior year. The reversal was due to a change in the Company's position on an unresolved tax matter related to the Company's Mexican subsidiaries.

Net income was $25.3 million, or $1.81 per diluted share, compared to net income of $21.3 million, or $1.53 per diluted share.

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**Cash Flow and Debt** 

For the year ended December 31, 2022, net cash used for operating activities was $3.4 million compared to cash provided by operating activities of $17.9 million in 2021, primarily due to net working capital, which was a use of cash of $39.0 million in 2022 compared to a use of cash of $1.5 million in 2021. In 2022, trade receivables provided net cash of $4.5 million compared to net cash provided of $27.6 million in the prior year, due to the timing of collections. Net cash used for inventory and accounts payable combined was $43.5 million in 2022 compared to $29.1 million in 2021. During the year, the Company effectively managed inventory levels that were elevated due to supply chain disruptions early in 2022 and significantly reduced inventory and debt during the fourth quarter. Cash inflow from decreased inventory was offset by a larger cash outflow related to accounts payable due to timing of payments.

Capital expenditures for 2022 decreased to $2.3 million compared to $11.8 million in 2021, primarily due to capital spending for the Company's new distribution center in 2021 that did not recur.

At December 31, 2022, net debt, or debt minus cash and cash equivalents, was $110.0 million compared to $95.7 million at December 31, 2021, due to higher net working capital, and compared to $144.5 million at September 30, 2022.

**Dividend and Share Repurchases**

During 2022, the Company returned value to shareholders by paying $5.8 million in dividends and repurchasing 261,049 shares of its Class A common stock at prevailing market prices for an aggregate purchase price of $3.0 million.

**Outlook**

In 2023, the retail marketplace remains uncertain, as consumers continue to adjust spending patterns in response to inflation and economic concerns. Demand for small kitchen appliances (SKA) is expected to be moderately softer than in 2022, especially in the first half of the year. Visibility regarding the potential degree of softness is limited at this time. Industry demand may be helped in part by consumers continuing to focus on a home-centric lifestyle. Home-centric consumers cook more, many product categories are considered essential, and increased product use creates a need for replacements and upgrades. The SKA industry historically has been resilient during times of economic downturn.

For the full year 2023, the Company expects its total revenue to be flat to 2022. In the first half of 2023, due to an expected continuation of soft consumer consumption trends, the Company has taken a more conservative view and expects a moderate decrease in revenue compared to the first half of 2022. In the second half of 2023, the Company expects to benefit from continued progress with its strategic initiatives and is optimistic about its new product offerings and potential placements for the holiday selling season, and expects revenue to increase modestly compared to the second half of 2022.

Operating profit for the full year 2023 is expected to increase compared to 2022, excluding the $10.0 million insurance recovery. In 2023, the Company expects gross profit margin expansion and moderately higher SG&A expense, mostly due to increased employee-related costs and some investment in new products advertising. Product costs for small kitchen appliances and transportation expenses have been moderating as many of the supply chain challenges of the past few years have subsided. The Company is working with its retail partners on appropriate rollbacks of previous price increases in ways that will keep Hamilton Beach Brands competitive while also protecting margins. The Company expects gross profit margin to return to its historical range as the first half of 2023 unfolds, following a short-term contraction in the fourth quarter of 2022. The Company continues to focus on driving efficiencies and value improvement across the enterprise.

Interest expense in 2023 is expected to increase compared to 2022, mostly due to higher rates. Capital expenditures in 2023 are expected to be $4 million to $5 million. Cash flow before financing in 2023 is expected to increase significantly compared to 2022 as a result of improvements in net working capital. The Company's outlook could change if consumer demand or retailer replenishment orders are softer than currently expected.

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The Company has many competitive advantages that position it for a solid performance in 2023. Its diversified brand and product portfolio provides numerous offerings to value-tier consumers and includes the opportunity to capture potential trade-down during times of economic downturn. Its premium products also provide exposure to high-income consumers, whose buying patterns are not as influenced by price considerations. The Company also expects to benefit from its growing participation in the global commercial market, which is expected to continue to rebound strongly from pandemic-driven demand softness. The Company expects continued progress with its strategic initiatives to drive revenue growth, expand operating margin and generate strong cash flow over time. The initiatives are focused on increasing sales of innovative, higher priced, higher margin products in the Company's core North American market. In addition to commercial products, focus areas include the premium and home health and wellness markets. The Company is also focused on driving growth of its flagship brands, Hamilton Beach<sup>®</sup> and Proctor Silex<sup>®</sup>, accelerating its digital transformation, and leveraging partnerships and acquisitions. Following is a brief summary of each initiative.

*Drive Core Growth:* This initiative is focused on driving the growth of the Company's flagship Hamilton Beach<sup>®</sup> and Proctor Silex<sup>®</sup> brands, including key category and channel strategies. Both brands have a long history of consumer trust, based on quality, durability and innovative solutions. In 2022, product development teams delivered 40 new consumer product platforms in high-demand categories. New products are supported by digital marketing, social media advertising and influencer marketing. Hamilton Beach<sup>®</sup> continues to be the #1 small kitchen appliance brand in the USA based on units sold. The Company continues to reposition its Proctor Silex<sup>®</sup> brand as "Simply Better." After converting several direct markets to licensing partnerships beginning in 2021, the Company continues to build out licensing partnerships globally.

*Gain Share in the Premium Market:* The Company continues to develop, license and acquire brands to increase its participation in the premium market. New products and digital marketing support underpin the strategy to grow this business. The Bartesian<sup>®</sup> line of premium cocktail machines continues to grow; in 2022, the team launched new duet and commercial models. The CHI<sup>®</sup> brand continues to grow in sales and share of the garment care category and has established itself as a leading premium brand. The Hamilton Beach Professional<sup>®</sup> and Weston<sup>®</sup> brands continue to resonate strongly with consumers within the niches they serve. The Wolf Gourmet<sup>®</sup> brand continues to generate steady sales within the luxury market. In early 2023, Hamilton Beach Brands announced an agreement to provide the next generation of specialty appliances for use with Numilk<sup>®</sup> powdered ingredients to create a variety of nondairy products in consumer homes and in commercial establishments. Hamilton Beach Brands and Numilk are in the product design and engineering phase and expect to launch the new appliances in early 2024.

*Lead in the Global Commercial Market:* This initiative is focused on securing new business and increasing sales with existing customers that operate in the food service and hospitality industries throughout the world. Continuing to develop products that create a competitive advantage in the Company's core blending and mixing categories, as well as expanding into new categories organically, is the cornerstone of the strategy. The Company is also investing in longer term strategies such as ecommerce, digital marketing, the expansion of international markets, and driving new category and channel growth. Identifying strategic partnership opportunities in this market is also a key focus.

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*Accelerate Digital Transformation:* The Company has a well-developed ecommerce capability and continues its investments to gain share in ecommerce markets for consumer and commercial products. The Company collaborates closely with omnichannel and online-only retail customers to leverage the fast-paced changes in the ecommerce channel and increase awareness and sell-through of its products. The Company focuses on robust digital marketing that includes online product content, search optimization and advertising, attracting favorable reviews and strong star ratings, and social media strategies. The Company's consumer products earned an average 4.3-star rating in 2022 and five of its 10 brands were rated 4.5 stars or higher.The Company's new U.S. distribution center includes a state-of-the art capability to ship small packages directly to consumers in partnership with retail customers.

*Leverage Partnerships and Acquisitions:* This initiative is focused on identifying and securing businesses with a strategic fit to the Company's portfolio. Hamilton Beach Brands is actively engaged in the pursuit of additional trademark licensing agreements, strategic alliances and acquisitions that would drive growth in all of its markets.

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**Conference Call**

The Company will conduct an earnings conference call and webcast on Friday, March 10, 2023, at 9:30 a.m. Eastern time. The call may be accessed by dialing 888-350-3452 (toll free), International 647-362-9199. Conference ID: 1809480. The conference call will also be webcast live on the Company's Investor Relations website at <u>www.hamiltonbeachbrands.com</u>. An archive of the webcast will be available on the website.

**About Hamilton Beach Brands Holding Company** 

**Forward-Looking Statements**

&nbsp;&nbsp;&nbsp;&nbsp;The statements contained in this news release that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties, which could cause actual results to differ materially from those presented. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Such risks and uncertainties include, without limitation: (1) the Company's ability to source and ship products to meet anticipated demand, (2) the Company's ability to successfully manage constraints throughout the global transportation supply chain, (3) uncertain or unfavorable global economic conditions, including those resulting from the COVID-19 pandemic and its downstream impacts and the ongoing conflict in Ukraine; (4) changes in the sales prices, product mix or levels of consumer purchases of small electric and specialty housewares appliances, (5) changes in consumer retail and credit markets, including the increasing volume of transactions made through third-party internet sellers, (6) bankruptcy of or loss of major retail customers or suppliers, (7) changes in costs, including transportation costs, of sourced products, (8) delays in delivery of sourced products, (9) changes in or unavailability of quality or cost effective suppliers, (10) exchange rate fluctuations, changes in the import tariffs and monetary policies and other changes in the regulatory climate in the countries in which the Company operates or buys and/or sells products, (11) the impact of tariffs on customer purchasing patterns, (12) product liability, regulatory actions or other litigation, warranty claims or returns of products, (13) customer acceptance of, changes in costs of, or delays in the development of new products, (14) increased competition, including consolidation within the industry, (15) shifts in consumer shopping patterns, gasoline prices, weather conditions, the level of consumer confidence and disposable income as a result of economic conditions, unemployment rates or other events or conditions that may adversely affect the level of customer purchases of the Company's products, (16) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, and (17) other risk factors, including those described in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2022. Furthermore, the future impact of unfavorable economic conditions, including inflation, rising interest rates, availability of capital markets, consumer spending rates, negative impacts resulting from the COVID-19 pandemic and its downstream impacts and the ongoing conflict in Ukraine remain uncertain. In uncertain economic environments, the Company cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on its business, results of operations, cash flows and financial position.

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**HAMILTON BEACH BRANDS HOLDING COMPANY**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
| | THREE MONTHS ENDED<br>DECEMBER 31 | THREE MONTHS ENDED<br>DECEMBER 31 | YEAR ENDED<br>DECEMBER 31 | YEAR ENDED<br>DECEMBER 31 |
| | **2022** | 2021 | **2022** | 2021 |
| | (In thousands, except per share data) | (In thousands, except per share data) | (In thousands, except per share data) | (In thousands, except per share data) |
| **Revenue** | $**196248** | $197750 | $**640949** | $658394 |
| Cost of sales | **162186** | 154608 | **511835** | 521892 |
| **Gross profit** | **34062** | 43142 | **129114** | 136502 |
| Selling, general and administrative expenses | **22759** | 25149 | **90120** | 104763 |
| Amortization of intangible assets | **50** | 50 | **200** | 200 |
| **Operating profit (loss)** | **11253** | 17943 | **38794** | 31539 |
| Interest expense, net | **1700** | 774 | **4589** | 2854 |
| Other expense (income), net | **130** | (93) | **1776** | (272) |
| **Income (loss) from continuing operations before income taxes** | **9423** | 17262 | **32429** | 28957 |
| Income tax expense (benefit) | **2325** | 4624 | **7162** | 7651 |
| **Net income (loss) from continuing operations** | **7098** | 12638 | **25267** | 21306 |
| Income (loss) from discontinued operations, net of tax | **—** |  | **—** |  |
| **Net income (loss)** | $**7098** | $12638 | $**25267** | $21306 |
| **Basic earnings (loss) per share:** |  |  |  |  |
| Continuing operations | $**0.51** | $0.91 | $**1.81** | $1.54 |
| Discontinued operations | **—** |  | **—** |  |
| Basic earnings (loss) per share | $**0.51** | $0.91 | $**1.81** | $1.54 |
| **Diluted earnings (loss) per share:** |  |  |  |  |
| Continuing operations | $**0.51** | $0.90 | $**1.81** | $1.53 |
| Discontinued operations | **—** |  | **—** |  |
| Diluted earnings (loss) per share | $**0.51** | $0.90 | $**1.81** | $1.53 |
| **Basic weighted average shares outstanding** | **13882** | 13904 | **13970** | 13880 |
| **Diluted weighted average shares outstanding** | **13904** | 14057 | **13996** | 13930 |

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**HAMILTON BEACH BRANDS HOLDING COMPANY**

 **CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

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| | | |
|:---|:---|:---|
| | **DECEMBER 31<br>2022** | DECEMBER 31<br>2021 |
| | (In thousands) | (In thousands) |
| **Assets** |  |  |
| **Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**928** | $1125 |
| &nbsp;&nbsp;&nbsp;&nbsp;Trade receivables, net | **115135** | 119580 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | **156038** | 183382 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | **12643** | 14273 |
| **Total current assets** | **284744** | 318360 |
| Property, plant and equipment, net | **27830** | 30485 |
| Right-of-use lease assets | **44000** |  |
| Goodwill | **6253** | 6253 |
| Other intangible assets, net | **1492** | 1692 |
| Deferred tax assets | **3117** | 4006 |
| Deferred costs | **14348** | 18703 |
| Other non-current assets | **7166** | 3005 |
| **Total assets** | $**388950** | $382504 |
| **Liabilities and stockholders' equity** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $**61759** | $131912 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | **11310** | 11719 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued product returns | **6474** | 6429 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | **5875** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | **16150** | 14116 |
| **Total current liabilities** | **101568** | 164176 |
| Revolving credit agreements | **110895** | 96837 |
| Lease liabilities, non-current | **46801** |  |
| Other long-term liabilities | **5152** | 19212 |
| **Total liabilities** | **264416** | 280225 |
| **Stockholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, par value $0.01 per share | **—** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Class A Common stock, par value $0.01 per share; 10,663 and 10,267 shares issued as of December 31, 2022 and 2021, respectively | **107** | 103 |
| &nbsp;&nbsp;&nbsp;&nbsp;Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 3,844 and 4,000 shares issued as of December 31, 2022 and 2021, respectively | **38** | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital in excess of par value | **65008** | 61586 |
| &nbsp;&nbsp;&nbsp;&nbsp;Treasury stock | **(8939)** | (5960) |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | **80238** | 60753 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | **(11918)** | (14243) |
| **Total stockholders' equity** | **124534** | 102279 |
| **Total liabilities and stockholders' equity** | $**388950** | $382504 |

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**HAMILTON BEACH BRANDS HOLDING COMPANY**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

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| | | | |
|:---|:---|:---|:---|
|  | YEAR ENDED DECEMBER 31 | YEAR ENDED DECEMBER 31 | YEAR ENDED DECEMBER 31 |
|  | **2022** | 2021 | 2020 |
|  | (In thousands) | (In thousands) | (In thousands) |
| **Operating activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) from continuing operations | $**25267** | $21306 | $24067 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **4883** | 4913 | 3907 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | **372** | 2110 | (1431) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock compensation expense | **3424** | 3237 | 3978 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brazil foreign currency loss | **2085** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | **(129)** | 1025 | 2055 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net changes in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Affiliate payable | **—** | (505) | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade receivables | **4532** | 27631 | (41314) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | **26399** | (9077) | (65808) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | **6274** | (4729) | (550) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | **(69911)** | (20037) | 40215 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | **(6614)** | (8017) | 6938 |
| **Net cash provided (used for) by operating activities from continuing operations** | **(3418)** | 17857 | (27934) |
| **Investing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expenditures for property, plant and equipment | **(2279)** | (11844) | (3312) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | **—** |  | (500) |
| **Net cash (used for) provided by investing activities from continuing operations** | **(2279)** | (11844) | (3812) |
| **Financing activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net additions (reductions) to revolving credit agreements | **14383** | (1550) | 39761 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of treasury stock | **(2979)** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash dividends paid | **(5782)** | (5468) | (5053) |
| &nbsp;&nbsp;&nbsp;&nbsp;Financing fees paid | **(47)** | (114) | (528) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other financing | **—** | (134) |  |
| **Net cash (used for) provided by financing activities from continuing operations** | **5575** | (7266) | 34180 |
| **Cash flows from discontinued operations** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) operating activities from discontinued operations | **—** |  | (6193) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used for) investing activities from discontinued operations | **—** |  | 6 |
| **Cash (used for) provided by discontinued operations** | **—** |  | (6187) |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash, cash equivalents, and restricted cash | **(123)** | (33) | 25 |
| **Cash, cash equivalents and restricted cash** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) for the period from continuing operations | **(245)** | (1286) | 2459 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) for the year from discontinued operations | **—** |  | (6187) |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance at the beginning of the year | **2150** | 3436 | 7164 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Balance at the end of the year** | $**1905** | $2150 | $3436 |
| **Reconciliation of cash, cash equivalents and restricted cash** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Continuing operations: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**928** | $1125 | $2415 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash included in prepaid expenses and other current assets | **62** | 48 | 208 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash included in other non-current assets | **915** | 977 | 813 |
| **Total cash, cash equivalents, and restricted cash** | $**1905** | $2150 | $3436 |

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