HAMILTON BEACH BRANDS HOLDING COMPANY ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 RESULTS

2024 Revenue Increased 4.6% to $654.7 MillionFull Year Gross Margin Expanded 300 Basis Points to 26.0%Cash Flow from Operations for 2024 was $65.4 MillionFourth Quarter Revenue Increased 3.3% to $213.5 Million , /PRNewswire/ -- Hamilton Beach Brands Holding Company (NYSE: HBB) (The Company) today announced results for the fourth quarter and full year 2024. Fourth Quarter 2024 Overview Revenue increased 3.3% to $213.5 million compared to $206.7 million Gross margin decreased 70 basis points to 26.1% compared to 26.8% Operating profit decreased 5.7% to $23.6 million compared to $25.0 million Full Year 2024 Overview Revenue increased 4.6% to $654.7 million compared to $625.6 million Gross margin increased 300 basis points to 26.0% compared to 23.0% Operating profit increased 23.1% to $43.2 million compared to $35.1 million Cash flow from operating activities was $65.4 million compared to $88.6 million Total debt at year-end 2024 was $50.0 million and year-end net cash position was $0.6 million "The fourth quarter represented a good finish to an outstanding year, marked by strong execution across our businesses," said R. Scott Tidey, President and Chief Executive Officer. "Our top and bottom-line results in the period were in line with our internal targets, driven by solid holiday sell-through. Our ongoing commitment to innovation helped fuel market share gains for our core business in 2024, and accelerated our presence in large, underpenetrated markets such as premium and commercial small appliances. Our operating performance generated robust positive cash flow, allowing us to return capital to shareholders through share repurchases and dividends and end the year in a net cash position." Results of the Fourth Quarter 2024 Compared to the Fourth Quarter 2023Total revenue grew $6.9 million, or 3.3%, to $213.5 million compared to $206.7 million. The revenue growth reflected higher volume and favorable product mix, 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. The acquisition of HealthBeacon on February 2, 2024 added $1.7 million of revenue in the fourth quarter of 2024. Gross profit was $55.8 million, or 26.1% of total revenue, compared to $55.3 million, or 26.8% of total revenue. The decrease in gross profit margin was primarily due to planned price decreases in the current year period following the realization of lower costs that positively impacted gross margins starting in the year ago period. Gross profit margin in both periods exceeded the high end of the Company's historical range. Selling, general and administrative expenses (SG&A) increased to $32.1 million compared to $30.2 million. The increase was primarily driven by the addition of $2.1 million of HealthBeacon expenses, partially offset by slightly lower employee-related costs. Operating profit was $23.6 million compared to $25.0 million. Interest expense, net decreased to $0.3 million compared to $0.4 million, primarily due to lower average borrowings outstanding under the Company's revolving credit facility and lower interest rates. Income tax benefit was $1.0 million compared to income tax expense of $5.1 million in the prior year period. The favorable benefit of $6.1 million is primarily due to a $4.3 million foreign tax benefit and a change in U.S. tax accounting method, both of which will not recur. Net income was $24.0 million, or $1.75 per diluted share, compared to net income of $19.6 million, or $1.40 per diluted share. Results of the Full Year 2024 Compared to the Full Year 2023Total revenue of $654.7 million increased 4.6% compared to $625.6 million, driven by higher volume and favorable product mix, partially offset by lower average selling prices reflecting lower costs and foreign currency. In the Company's North America Consumer markets, revenue increased in the U.S. and Mexico markets. In the Company's Global Commercial market, revenue was relatively flat year over year. The acquisition of HealthBeacon on February 2, 2024 added $4.3 million of revenue in 2024. Gross profit was $170.2 million, or 26.0% of total revenue, compared to $143.7 million, or 23.0% of total revenue. The 300 basis point expansion in gross profit margin was primarily due to lower product and transportation costs combined with a more favorable product mix, and represented a record annual gross margin for the Company since becoming a stand-alone public company in 2017. Selling, general and administrative expenses (SG&A) increased to $126.7 million compared to $108.4 million. The increase was primarily driven by the addition of $7.7 million of HealthBeacon expenses, higher employee-related expenses of $5.9 million, including $4.0 million of increased incentive compensation due to higher achievement percentage, and an increase in outside services which include an incremental $1 million of HealthBeacon M&A transaction costs. Operating profit increased 23.1% to $43.2 million compared to $35.1 million. Interest expense, net decreased to $0.6 million compared to $3.0 million, primarily due to lower average borrowings outstanding under the Company's revolving credit facility and lower interest rates. The effective tax rate on income was 7.8% and 20.4% for the years ended December 31, 2024 and 2023, respectively. The effective tax rate was lower for the year ended December 31, 2024 primarily due to the aforementioned, non-recurring foreign tax benefit and a change in U.S. tax accounting method. Net income was $30.8 million, or $2.20 per diluted share, compared to net income of $25.2 million, or $1.80 per diluted share. Cash Flow and DebtFor the year ended December 31, 2024, net cash provided by operating activities was $65.4 million, compared to $88.6 million for the year ended December 31, 2023 which benefited from post-pandemic working capital improvements. Net working capital provided cash of $14.5 million in 2024 compared to $49.5 million in 2023. Capital expenditures in 2024 were $3.2 million compared to $3.4 million in 2023. The Company allocated its strong cash flow primarily to fund the acquisition of HealthBeacon and return value to shareholders through the share repurchases and quarterly dividend. On both December 31, 2024 and December 31, 2023 total debt was $50.0 million. On December 31, 2024, net cash was $0.6 million compared to net debt of $34.6 million on December 31, 2023. Net (cash) debt is defined as total debt minus cash and cash equivalents and highly liquid short-term investments. For the full year 2024, the Company repurchased 668,785 shares of its Class A common stock at prevailing market prices for an aggregate purchase price of $14.1 million and paid $6.3 million in dividends. OutlookIn 2025, the retail marketplace for small kitchen appliances is expected to grow in the low-single digit range led by the U.S. The Company expects to modestly outperform the industry in 2025, with revenue growth approaching the mid-single digit range. The Company expects operating profit to increase at a faster rate than revenue driven by expense leverage on higher revenue with gross profit margin in-line with 2024's record level and a sharp decrease in HealthBeacon SG&A expenses. This will be partially offset by a significant step-up in planned advertising spend in fiscal 2025 to support the Company's strategic growth initiatives. Cash flow from operating activities less cash used for investing activities for 2025 is expected to be in the range of $40 million to $50 million. Conference CallThe Company will conduct an earnings conference call and webcast on Wednesday, February 26, 2025, at 4:30 p.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 www.hamiltonbeachbrands.com. An archive of the webcast will be available on the website. About Hamilton Beach Brands Holding CompanyHamilton Beach Brands Holding Company is a leading designer, marketer, and distributor of a wide range of brand name small electric household and specialty housewares appliances, and commercial products for restaurants, fast food chains, bars, and hotels, and is a provider of connected devices and software for healthcare management. The Company's owned consumer brands include Hamilton Beach®, Proctor Silex®, Hamilton Beach Professional®, Weston®, and TrueAir®. The Company's owned commercial brands include Hamilton Beach Commercial® and Proctor Silex Commercial®. The Company licenses the brands for CHI® premium garment care products, CloroxTM home appliances, and Brita HubTM countertop electric water filtration appliances. The Company has exclusive multiyear agreements to design, sell, market, and distribute Bartesian® cocktail makers and Numilk® plant-based milk makers. The Company's Hamilton Beach Health subsidiary is focused on expanding the Company's participation in the home health and medical markets. In 2024, Hamilton Beach Health acquired HealthBeacon, a medical technology firm and strategic partner of the Company since 2021. HealthBeacon, a medical technology firm that specializes in developing connected devices. For more information about Hamilton Beach Brands Holding Company, visit www.hamiltonbeachbrands.com. Forward-Looking StatementsThe 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 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, 2024. Furthermore, the future impact of unfavorable economic conditions, including inflation, changing interest rates, availability of capital markets and consumer spending rates remains uncertain. In uncertain economic environments, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if any, such circumstances could have on our business, results of operations, cash flows and financial position. HAMILTON BEACH BRANDS HOLDING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) THREE MONTHS ENDED DECEMBER 31 YEAR ENDED DECEMBER 31 2024 2023 2024 2023 (In thousands, except per share data) (In thousands, except per share data) Revenue $ 213,509 $ 206,650 $ 654,693 $ 625,625 Cost of sales 157,754 151,366 484,486 481,949 Gross profit 55,755 55,284 170,207 143,676 Selling, general and administrative expenses 32,108 30,245 126,703 108,395 Amortization of intangible assets 78 50 302 200 Operating profit 23,569 24,989 43,202 35,081 Interest expense, net 283 366 613 3,000 Pension termination expense 16 — 7,611 — Other expense (income), net 248 (5) 1,602 385 Income before income taxes 23,022 24,628 33,376 31,696 Income tax expense (benefit) (977) 5,059 2,617 6,454 Net income $ 23,999 $ 19,569 $ 30,759 $ 25,242 Basic earnings (loss) per share: Basic earnings (loss) per share $ 1.76 $ 1.40 $ 2.20 $ 1.80 Diluted earnings (loss) per share: Diluted earnings (loss) per share $ 1.75 $ 1.40 $ 2.20 $ 1.80 Basic weighted average shares outstanding 13,673 13,966 13,950 14,036 Diluted weighted average shares outstanding 13,686 13,985 13,963 14,060 HAMILTON BEACH BRANDS HOLDING COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited) DECEMBER 312024 DECEMBER 312023 (In thousands) Assets Current assets Cash and cash equivalents $ 45,644 $ 15,370 Trade receivables, net 117,068 135,434 Inventory 124,904 126,554 Prepaid expenses and other current assets 16,103 9,457 Total current assets 303,719 286,815 Property, plant and equipment, net 34,401 27,401 Right-of-use lease assets 36,049 39,423 Goodwill 7,099 6,253 Other intangible assets, net 2,101 1,292 Deferred tax assets 6,693 2,581 Deferred costs 16,156 14,613 Other non-current assets 8,849 6,324 Total assets $ 415,067 $ 384,702 Liabilities and stockholders' equity Current liabilities Accounts payable $ 104,161 $ 99,704 Accrued compensation 18,792 14,948 Accrued product returns 7,876 6,232 Lease liabilities 5,193 6,155 Other current liabilities 18,098 12,549 Total current liabilities 154,120 139,588 Revolving credit agreements 50,000 50,000 Lease liabilities, non-current 39,008 41,937 Other long-term liabilities 6,036 5,910 Total liabilities 249,164 237,435 Stockholders' equity Preferred stock, par value $0.01 per share — — Class A Common stock, par value $0.01 per share; 11,476 and 11,161 shares issued as of December 31, 2024 and 2023, respectively 115 112 Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 3,603 and 3,616 shares issued as of December 31, 2024 and 2023, respectively 36 36 Capital in excess of par value 76,668 70,401 Treasury stock (26,202) (12,013) Retained earnings 123,863 99,398 Accumulated other comprehensive loss (8,577) (10,667) Total stockholders' equity 165,903 147,267 Total liabilities and stockholders' equity $ 415,067 $ 384,702 HAMILTON BEACH BRANDS HOLDING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) YEAR ENDED DECEMBER 31 2024 2023 2022 (In thousands) Operating activities Net income $ 30,759 $ 25,242 $ 25,267 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization 4,801 4,362 4,883 Deferred income taxes (7,269) (906) 372 Stock compensation expense 6,270 5,394 3,424 Brazil foreign currency loss — — 2,085 Pension termination expense 7,611 — — Other 6,354 (358) (129) Net changes in operating assets and liabilities: Trade receivables 13,840 (18,768) 4,532 Inventory (4,103) 30,761 26,399 Other assets 713 10,856 6,274 Accounts payable 4,747 37,493 (69,911) Other liabilities 1,692 (5,440) (6,614) Net cash provided by (used for) operating activities 65,415 88,636 (3,418) Investing activities Expenditures for property, plant and equipment (3,193) (3,419) (2,279) Acquisition of business, net of cash acquired (7,412) — — Issuance of secured loan (600) (1,605) — Repayment of secured loan 2,205 — — Purchase of U.S. Treasury bill (4,884) — — Other — (150) — Net cash provided by (used for) investing activities (13,884) (5,174) (2,279) Financing activities Net additions (reductions) to revolving credit agreements — (60,916) 14,383 Purchase of treasury stock (14,106) (3,074) (2,979) Cash dividends paid (6,294) (6,082) (5,782) Financing fees paid (548) — (47) Net cash provided by (used for) financing activities (20,948) (70,072) 5,575 Effect of exchange rate changes on cash, cash equivalents and restricted cash (438) 1,084 (123) Cash, cash equivalents and restricted cash Increase (decrease) for the year 30,145 14,474 (245) Balance at the beginning of the year 16,379 1,905 2,150 Balance at the end of the year $ 46,524 $ 16,379 $ 1,905 Reconciliation of cash, cash equivalents and restricted cash Cash and cash equivalents $ 45,644 $ 15,370 $ 928 Restricted cash included in prepaid expenses and other current assets 880 72 62 Restricted cash included in other non-current assets — 937 915 Total cash, cash equivalents and restricted cash $ 46,524 $ 16,379 $ 1,905 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures: Net (Cash) Debt Net (cash) debt is a non-GAAP financial measure that management uses in evaluating financial position. Net (cash) debt is defined as long-term debt less cash and cash equivalents and highly liquid short-term investments. Management believes net (cash) debt is an important measure of the Company's financial position due to the amount of cash and cash equivalents on hand. The presentation of this measure is not intended to be considered in isolation from, as a substitute for, or as superior to, the financial information prepared and presented in accordance with U.S. GAAP. The presentation of this measure may be different from non-GAAP financial measures used by other companies. A reconciliation of this measure to its most directly comparable GAAP measure is provided in the table below: TWELVE MONTHS ENDED DECEMBER 31 2024 2023 (In millions) Total debt $ 50.0 $ 50.0 Less: cash and cash equivalents $ (45.6) $ (15.4) Less: highly liquid short-term investments (1) $ (5.0) $ — Net (cash) debt $ (0.6) $ 34.6 (1) Investments with original maturities greater than 3 months but less than one year are included in prepaid expenses and other current assets on the balance sheet. If the original maturity is 3 months or less it is included within cash and cash equivalents. SOURCE Hamilton Beach Brands Holding Company WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

HAMILTON BEACH BRANDS HOLDING COMPANY ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 RESULTS

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