Hamilton Beach Brands Holding Co
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
HBB$32.16-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001709164-24-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001709164-25-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 47 previous paragraphs and 36 current paragraphs.
16 unchanged; 12 reworded; 8 added; 17 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Our operations are managed and reported intwo operating segments, each of which is a reportable segment for financial reporting purposes: (1) Home and Commercial Products and (2) Health.
Current report
The market for small electric household and specialty housewares appliances is fairly steady throughout the year, however the Company’s revenue typically increases during the second half of the year and peaks during the fourth quarter due to the fall holiday-selling season.
Current report
Revenue - Revenue increased $5.1 million, or 4.0%, to $133.4 million compared to $128.3 million in the prior year. The revenue growth reflected favorable product mix and increased volume, partially offset by pricing and foreign currency. In the Company’s North America Consumer markets, revenue increased driven by growth in the U.S. market. In the Company’s Global Commercial market, revenue decreased slightly due to softness in international markets. HealthBeacon contributed $1.5 million in revenue for the three months ended March 31, 2025.
Current report
Selling, general and administrative expenses (SG&A) -Selling, general and administrative expenses decreased by $0.6 million compared to the first quarter of 2024. The decrease was primarily driven by HealthBeacon acquisition expenses that did not recur in 2025.
Current report
Interest (income) expense, net- The Company had net interest income of $0.1 million compared to net interest expense of $0.2 million in the prior year, primarily due to investment of increased cash on hand in the first quarter of 2025.
Current report
Income tax expense (benefit) - The effective tax rate was 28.8% and 8.6% for three months ended March 31, 2025 and 2024, respectively. The higher effective tax rate in the first quarter of 2025 reflects the shift from a loss in the first quarter of 2024 to profit in the first quarter of 2025, coupled with the exclusion of the foreign losses of HealthBeacon in both periods requiring a full valuation allowance for which no benefit can be recognized. Excluding these impacts, the Company’s effective tax rate remains consistent.
Current report
Operating activities - Net cash provided by operating activities was $6.6 million, compared to $19.7 million in the prior year. Net working capital provided cash of $16.3 million in 2025 compared to cash provided of $33.5 million in 2024. Cash provided by trade receivables decreased to $34.9 million in 2025 from $46.2 million in the prior year. The decrease is primarily related to improvements in trade receivable collections that benefited the prior year. Net inventory and accounts payable represented a use of cash of $18.6 million in 2025, up from $12.7 million in the prior year, driven by a material level of inventory pulled forward in the current period ahead of uncertainty related to tariff impacts.
Current report
The HBB Facility contains customary representations and warranties, events of default and covenants, including, among other things, covenants applicable to HBB and its subsidiaries limiting indebtedness, liens, investments, dispositions and restricted payments. Additionally, if Excess Availability (as defined in the HBB Facility) is less than $15.0 million at any time, the HBB Facility will require that HBB maintain a minimum Fixed Charge Coverage Ratio (as defined in the HBB Facility) of 1.00 to 1.00 until Excess Availability is greater than or equal to $15.0 million for 30 consecutive days. As of March 31, 2025, we were in compliance with all applicable financial covenants in the HBB Facility.
Removed paragraphs (17)
Previous report
HBB is the Company’s single reportable segment.
Previous report
The Company’s business is seasonal, and a majority of revenue and operating profit typically occurs in the second half of the year when sales of small electric appliances and kitchenware historically increase significantly for the fall holiday-selling season.
Previous report
Revenue - Revenue increased $3.1 million compared to the prior year due to a more favorable product mix and increased unit volume primarily driven by increased revenue in the US Consumer and Mexican Consumer markets. Additionally, the acquisition of HealthBeacon added a new revenue stream during the year and contributed $1.2 million in revenue for the three months ended September 30, 2024. These increases were partially offset by decreased revenue in the Latin American, Canadian Consumer, and Global Commercial markets.
Previous report
Selling, general and administrative expenses (SG&A) -Selling, general and administrative expenses increased by $7.7 million compared to the third quarter of 2023. The increase was primarily driven by higher employee-related costs, including $2.9 million of increased non-cash equity incentive compensation due to stock price appreciation, the addition of $1.8 million of HealthBeacon SG&A expenses, and the absence of a $0.9 million non-recurring insurance recovery in the prior year.
Previous report
Interest expense, net- Interest expense, net decreased $0.5 million due to decreased average borrowings outstanding under the HBB Facility and lower interest rates compared to the third quarter of 2023.
Previous report
Pension termination expense - During the third quarter of 2024, a one-time non-cash expense of $7.6 million was incurred in connection with the termination of the Company’s U.S. defined benefit pension plan related to the reclassification of historical unrecognized losses from Accumulated Other Comprehensive Income.
Previous report
Other expense (income), net- Other expense (income), net includes currency losses of $0.2 million in the current year compared to currency losses of $0.4 million in the prior year.
Previous report
Income tax expense (benefit) - The effective tax rate was 27.4% and 21.6% for three months ended September 30, 2024 and 2023, respectively. The effective tax rate was higher in the three months ended September 30, 2024 due to a valuation allowance on foreign losses in the current year and a tax benefit on foreign income in the prior year that did not recur.
Previous report
First Nine Months of 2024 Compared with First Nine Months of 2023
Previous report
Revenue - Revenue increased by $22.2 million compared to the prior year due to increased unit volume and a more favorable product mix primarily driven by increased revenue in the US Consumer, Mexico Consumer, and Latin American markets. Additionally, the acquisition of HealthBeacon added a new revenue stream during the year and contributed $2.6 million in revenue for the nine months ended September 30, 2024. These increases were partially offset by decreased revenue in the Canadian Consumer market and Global Commercial market.
Previous report
Gross profit -Gross profit margin increased to 25.9% from 21.1% primarily due to lower product costs and a favorable product mix.
Previous report
Selling, general and administrative expenses (SG&A) -Selling, general and administrative expenses increased $16.4 million compared to 2023. The increase is primarily due to the addition of $5.6 million of HealthBeacon SG&A expenses, higher employee-related costs, including $4.2 million of increased non-cash equity incentive compensation due to stock price appreciation, an increase in outside services and non-recurring items, which include $1.3 million of HealthBeacon transaction costs and the absence of a $0.9 million insurance recovery that occurred in the prior year.
Previous report
Interest expense, net- Interest expense, net decreased $2.3 million due to decreased average borrowings outstanding under the HBB Facility, and lower interest rates compared to 2023.
Previous report
Pension termination expense - During the third quarter of 2024, a one-time non-cash expense of $7.6 million was incurred in connection with the termination of the Company’s U.S. defined benefit pension plan related to the reclassification of historical unrecognized losses from Accumulated Other Comprehensive Income.
Previous report
Income tax expense (benefit) -The effective tax rate was 34.7% compared to 19.7% in the prior year. The effective tax rate was higher for the nine months ended September 30, 2024 due to a valuation allowance on foreign losses in the current year and tax benefits on foreign income and credits in the prior year that did not recur.
Previous report
Operating activities - Net cash provided by operating activities was $35.2 million, representing more normalized post-pandemic working capital, compared to $68.7 million in the prior year, which benefited from significant excess inventory reduction activities. Net working capital provided cash of $20.3 million in 2024 compared to cash provided of $64.3 million in 2023. The 2024 period benefited from the Company's continued focus on working capital management which led to improvements in days sales outstanding and days payable outstanding. The change in net cash provided by operating activities reflects the net working capital changes partially offset by adjustments to net income for the non-cash stock compensation and pension termination expenses.
Previous report
The HBB Facility includes restrictive covenants, which, among other things, limit the payment of dividends, subject to achieving availability thresholds. Dividends are not to exceed $7.0 million during any calendar year to the extent that for the thirty days prior to the dividend payment date, and after giving effect to the dividend payment, HBB maintains excess availability of at least $18.0 million. Dividend amounts are discretionary to the extent that for the thirty days prior to the dividend payment date, and after giving effect to the dividend payment, HBB maintains excess availability of at least $30.0 million. The HBB Facility also requires the Company to achieve a minimum fixed charge coverage ratio in certain circumstances, as defined in the HBB Facility. As of September 30, 2024, we were in compliance with all financial covenants in the HBB Facility.
Reworded paragraphs (12)
Previous wording
Third Quarter of 2024 Compared with Third Quarter of 2023
Current wording
First Quarter of 2025 Compared with First Quarter of 2024
Previous wording
Gross profit - As a percentage of revenue, gross profit margin increased to 28.0% compared to 26.1% in the prior year primarily due to a favorable product mix and lower product costs.
Current wording
Gross profit - As a percentage of revenue, gross profit margin increased to 24.6% compared to 23.4% in the prior year primarily due to favorable product mix, including the addition of HealthBeacon which operates at a significantly higher gross margin.
Previous wording
Other expense (income), net- Other expense (income), net includes currency losses of $0.8 million in the current year compared to currency gains of $0.1 million in the prior year.
Current wording
Other (income) expense, net- Other (income) expense, net includes currency gains of $0.3 million in the current year compared to currency losses of $0.1 million in the prior year.
Previous wording
Our cash flows are provided by dividends paid or distributions made by HBB. The only material assets held by us are the investment in our consolidated subsidiary. As a result, certain statutory limitations or regulatory or financing agreements could affect the levels of distributions allowed to be made by our subsidiary. We have not guaranteed any of the obligations of HBB.
Current wording
Our cash flows are provided by dividends paid or distributions made by HBB. The only material assets held by us are the investments in our consolidated subsidiary. As a result, certain statutory limitations or regulatory or financing agreements could affect the levels of distributions allowed to be made by our subsidiary. We have not guaranteed any of the obligations of HBB.
Previous wording
Our principal sources of cash to fund liquidity needs are: (1) cash generated from operations and (2) borrowings available under the HBB Facility. Our primary use of funds consists of working capital requirements, operating expenses, payment of dividends, repurchase of shares, capital expenditures, payments of principal and interest on debt and acquisitions.
Current wording
Our principal sources of cash to fund liquidity needs are: (1) cash generated from operations and (2) borrowings available under the HBB Facility. Our primary use of funds consists of working capital requirements, operating expenses, payment of dividends, repurchase of shares, capital expenditures and payments of principal and interest on debt.
Previous wording
The HBB Facility expires on June 30, 2025, within one year after the issuance of these financial statements. We have not yet completed our refinancing of the HBB Facility and, accordingly, all amounts outstanding have been classified as current liabilities. Based on the status of the refinancing and our history of successfully refinancing our debt, we believe that it is probable that the HBB Facility will be refinanced before its maturity. We believe funds available from cash on hand, the HBB Facility and operating cash flows will provide sufficient liquidity to meet our operating needs and commitments arising during the next twelve months.
Current wording
The HBB Facility expires on December 13, 2029. We believe funds available from cash on hand, the HBB Facility and operating cash flows will provide sufficient liquidity to meet our operating needs and commitments arising during the next twelve months.
Previous wording
Investing activities - Net cash used for investing activities in 2024 increased compared to 2023 related primarily to the acquisition of HealthBeacon offset by the extinguishment of our secured loan to HealthBeacon in the first quarter of 2024 which provided net cash of $1.6 million. Additionally, the Company used excess cash on hand to invest in a six-month U.S. Treasury bill during the third quarter of 2024.
Current wording
Investing activities - Net cash used for investing activities in 2025 decreased $6.2 million compared to 2024 related primarily to the 2024 acquisition of HealthBeacon partially offset by the extinguishment of our secured loan to HealthBeacon in the first quarter of 2024, neither of which recurred in the first quarter of 2025.
Previous wording
Financing activities - Net cash used for financing activities was $14.6 million in 2024 compared to net cash used for financing activities of $65.7 million in 2023. The change is due to a decrease in HBB’s net borrowing activity on the HBB Facility. This decrease was partially offset by increased purchases of treasury stock.
Current wording
Financing activities - Net cash used for financing activities was $5.0 million in 2025 compared to net cash used for financing activities of $2.1 million in 2024. The change is due to increased purchases of treasury stock in the first quarter of 2025.
Previous wording
The HBB Facility expires on June 30, 2025. The entire outstanding balance has been classified as a current liability due to the fact the facility expires within one year and has not yet been refinanced. The Company does not expect to make voluntary repayments under the HBB Facility as the rate of return to invest excess cash exceeds the average interest rate of the HBB Facility. A material decrease in interest rates could cause us to re-evaluate.
Current wording
HBB does not expect to make voluntary repayments within the next twelve months under the HBB Facility as the rate of return to invest excess cash exceeds the average interest rate of the HBB Facility. A material decrease in interest rates could cause HBB to re-evaluate. The obligations under the HBB Facility are secured by all of HBB’s U.S. assets. As of March 31, 2025, the borrowing base under the HBB Facility was $122.6 million and borrowings outstanding were $50.0 million. As of March 31, 2025, the excess availability under the HBB Facility was $72.6 million.
Previous wording
The maximum availability under the HBB Facility is governed by a borrowing base derived from advance rates against eligible trade receivables, inventory and trademarks of the borrowers, as defined in the HBB Facility. Borrowings bear interest at a floating rate, which can be a base rate, SOFR or bankers’ acceptance rate, as defined in the HBB Facility, plus an applicable margin. The applicable margins, effective September 30, 2024, for base rate loans and SOFR loans denominated in U.S. dollars were 0.0% and 1.55%, respectively. The applicable margins, effective September 30, 2024, for base rate loans and bankers’ acceptance loans denominated in Canadian dollars were 0.0% and 1.55%, respectively. The HBB Facility also requires a fee of 0.25% per annum on the unused commitment. The margins and unused commitment fee under the HBB Facility are subject to quarterly adjustment based on average excess availability. The weighted average interest rate applicable to the HBB Facility for the nine months ended September 30, 2024 was 3.18% including the floating rate margin and the effect of the interest rate swap agreements described below.
Current wording
The maximum availability under the HBB Facility is governed by a borrowing base derived from advance rates against eligible trade receivables and inventory of HBB. As of March 31, 2025, interest on outstanding loans under the HBB Facility accrues at a per annum rate equal to, at HBB’s option, either Term Secured Overnight Financing Rate (SOFR) (as defined in the HBB Facility) plus 1.65% or the Base Rate(as defined in the HBB Facility) plus 0.00%. As of March 31, 2025, the HBB Facility requires a fee of 0.20% per annum on the unused commitment there under. The weighted average interest rate applicable to the HBB Facility for thethree months ended March 31, 2025 was 3.23% (after giving effect to the interest rate swap agreements described below).
Previous wording
In December 2015, the Company entered into an arrangement with a financial institution to sell certain U.S. trade receivables on a non-recourse basis. See Note 2 of the unaudited consolidated financial statements.
Current wording
The Company has an arrangement with a financial institution to sell certain U.S. trade receivables of a single customer on a non-recourse basis. See Note 2 of the unaudited consolidated financial statements.
Previous wording
The statements contained in this Form 10-Q 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 Exchange Act. 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) uncertain or unfavorable global economic conditions and impacts from global military conflicts; (2) the Company’s ability to source and ship products to meet anticipated demand; (3) the Company’s ability to successfully manage constraints throughout the global transportation supply chain; (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) changes in customers’ inventory management strategies; (16) 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; (17) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation; (18) the Company’s ability to identify, acquire or develop, and successfully integrate, new businesses or new product lines; and (19) 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, 2023. Furthermore, the future impact of unfavorable economic conditions, including inflation…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The statements contained in this Form 10-Q 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 Exchange Act. 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) uncertain or unfavorable global economic conditions and impacts from tariffs, inflation, rising interest rates, recessions or economic slowdowns; (2) changes in costs, including transportation costs and tariffs, of sourced products; (3) the Company’s ability to source and ship products to meet anticipated demand; (4) changes in or unavailability of quality or cost effective suppliers; (5) the Company’s ability to successfully manage constraints throughout the global transportation supply chain; (6) delays in delivery of sourced products; (7) changes in the sales prices, product mix or levels of consumer purchases of small electric and specialty housewares appliances; (8) changes in consumer retail and credit markets, including the increasing volume of transactions made through third-party internet sellers; (9) bankruptcy of or loss of major retail customers or 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) customer acceptance of changes in costs of or delays in the development of new products; (13) product liability, regulatory actions or other litigation, warranty claims or returns of products; (14) increased competition, including consolidation within the industry; (15) changes in customers’ inventory management strategies; (16) 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; (17) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation; (18) the Company’s ability to identify, acquire or develop, and successfully integrate, new businesses or new product lines; and (19) 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, 2024. Furthermore, the future i…
Excerpt shortened here; the source contains the full paragraph.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following table identifies the components of the change in revenue:
Previous report — wording carried elsewhere
The obligations under the HBB Facility are secured by substantially all of HBB’s assets. As of September 30, 2024, the borrowing base under the HBB Facility was $148.5 million and borrowings outstanding were $50.0 million. As of September 30, 2024, the excess availability under the HBB Facility was $98.5 million.