Hamilton Beach Brands Holding Co false 0001709164 0001709164 2025-01-13 2025-01-13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 13, 2025
HAMILTON BEACH BRANDS HOLDING COMPANY
(Exact name of registrant as specified in its charter)
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Delaware |
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001-38214 |
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31-1236686 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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4421 WATERFRONT DR |
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GLEN ALLEN |
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VA |
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23060 |
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(Address of principal executive offices) |
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(Zip code) |
(804) 273-9777
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Class A Common Stock, Par Value $0.01 Per Share |
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HBB |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company 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):
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. ☐
Item 7.01 |
Regulation FD Disclosure. |
On January 13, 2025, R. Scott Tidey, President and Chief Executive Officer, and Sally M. Cunningham, Senior Vice President, Chief Financial Officer and Treasurer, will present an investor presentation on behalf of Hamilton Beach Brands Holding Company at the 2025 ICR Investor Conference. In the presentation, the Company is reaffirming the Outlook it provided on October 30, 2024, which stated: For the full year 2024 compared to the full year 2023, the Company expects revenue to increase modestly, Operating profit to increase significantly based on an expansion of gross profit margin, and Cash Flow from operating activities less cash used for investing activities to be at the high end of its normalized range of $25 million to $35 million per year. A copy of the investor presentation is attached hereto as Exhibit 99 and is incorporated herein by reference.
The information in Item 7.01 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 (the “Exchange Act”), 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 (the “Securities Act”) or the Exchange Act, 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 7.01 of this Current Report on Form 8-K, the following Exhibit is furnished as part of this Current Report on Form 8-K.
Forward-Looking Statements
The statements contained in this Current Report on Form 8-K that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act 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, 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.
SIGNATURES
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: January 13, 2025 |
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HAMILTON BEACH BRANDS HOLDING COMPANY |
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By: |
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/s/ Sally M. Cunningham |
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Name: |
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Sally M. Cunningham |
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Title: |
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Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)/(Principal Accounting Officer) |
Exhibit 99 Investor Presentation ICR Conference 2025 January 13,
2025
2 Forward-Looking Statements The statements contained in this presentation
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, 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.
3 Company Overview Markets Served Who We Are • Core Consumer market
is North • Hamilton Beach Brands Holding Company America (U.S., Canada, Mexico, • Long tenured company (115 years) Latin America) • A leading designer, marketer and distributor of a wide range of • Increasing share of the
Premium branded small electric household and specialty housewares small kitchen appliance market appliances, as well as commercial products for • Growing presence in global restaurants, fast food chains, bars and hotels Commercial kitchen and
hotel • Provider of connected devices and software for home amenities markets healthcare management • Developing global Home Healthcare • Became public in 2017, traded on NYSE under ticker HBB solutions business • Annual
revenue: ~$650 million • Annual units sold: 25-30 million • Growing revenue profitability while reducing working capital and debt
4 Investment Highlights 01 02 03 Leader in large and growing Proven
innovator with 115 Strong relationships consumer housewares market, years of industry leading R&D with key customers across all with a powerful portfolio of markets and channels, with a iconic brands leading ecommerce presence 04 05 06 07 Six
strategic Asset-light business Disciplined capital Experienced initiatives to drive model generates allocation strategy of management team revenue growth and healthy free cash flow reinvestment in executing strategic margin expansion business,
returning priorities over time value to shareholders
5 Luxury Powerful Brand Portfolio Flagship brands Hamilton Beach and
Proctor Silex are well known and trusted names that have served consumers for 115 years • Core business provides strong foundation to support newer growth initiatives Premium, Commercial, • Exclusive multiyear trademark licensing Home
Health and other agreements with increasing number of premium consumer brands sold at higher prices and higher margins • Portfolio offers good, better, best product assortment from Value to Luxury Value
6 Broad Product Assortment ® Participates in high demand Hamilton
Beach participates Hamilton Beach brand small in 50+ product categories appliances rank in the Top 3 categories like single-serve often offering multiple brands positions for national brands in coffee, blenders, toaster per category 26 key product
sub-categories ovens and grills in the U.S.¹ ¹ Source: Circana, Retail Tracking Service, US Unit Sales, Small Appliances Sub-Categories, 12 months ending September 30, 2024
7 Consistent Product Innovation ® Hamilton Beach’s Good
Thinking approach to consumer-driven innovation Goal is to • Gather data/feedback from 25,000+ maximize innovations consumer touchpoints annually with unique consumer • 200+ new product platforms benefits launched over last 5 years
• Pipeline of innovative new products focused on core, premium, commercial, home health markets • HBB’s dollar and unit market share grew in North America in 2023 and 2024¹ ¹ Source: Circana September 30, 2024
8 New Products Proprietary & Confidential
9 Best-in-Class Customer Relationships Products distributed through all
key channels Global Health North American Consumer Global Commercial Largest customers for flagship brands
10 Strategic Growth Initiatives 01. Drive Core Growth 02. Gain Share in
the Premium Market Core Premium Leverage Partnerships and 03. Lead in Global Commercial Market Acquisitions Customer Focused Accelerate Digital 04. Accelerate Growth of Hamilton Beach Health Transformation Health Commercial 05. Accelerate Digital
Transformation 06. Leverage Partnerships and Acquisitions
11 01 Strategic initiative Hamilton Beach is the #1 small kitchen
appliance national brand in the U.S. by units sold¹ Drive Core • Proctor Silex brand products feature sleek, practical designs at accessible price points Growth • Growth plans to increase revenue and market share focus on innovative
new product development • New product launches include new models in high-demand categories including coffee makers, air fryer toaster ovens, blenders, food processors, hand and stand mixers, slow cookers, garment care, and more •
Marketing support includes digital, social media and influencers ¹ Source: Circana September 30, 2024
12 02 Strategic initiative Gain Share • Some premium brands are
owned while others are used under exclusive multiyear trademark licensing in Premium and other agreements Leveraging • U.S. premium market is ~$3.7 billion; HBB share is brands into ~3%, providing significant room for growth¹ new premium
Market lines • Accounted for 15% of HBB revenue in 2023 • Growth plans include new brands such as Numilk machines to create fresh plant-based milks on demand ¹ Source: Circana December 31, 2023
13 Premium New Products
14 03 Strategic initiative • Increasing participation in
multi-billion-dollar Lead in Global global market with significant upside • Investing in higher margin products for commercial food service/beverages and Commercial hotel amenities • Accounted for 8% of HBB revenue in 2023 Market •
Growth plans include product innovation, increasing sales with existing and new customers, and leveraging HBB partnerships
15 Commercial Growth Plans Regional and global chains expansion •
Blending and mixing • Back-of-house food prep Drive growth in Europe, Asia, Africa and India Coffee Numilk commercial machine shops are a prime target
16 04 Strategic initiative 2021 2024 Accelerate Acquired HealthBeacon
PLC, a Created Hamilton Beach Health brand medical technology firm Growth of • Opportunity driven by demographics, increased chronic medical conditions, need for at-home treatments, technology • Developing healthcare management tools
including remote Hamilton Beach therapeutic monitoring systems • First system is the Smart Sharps Bin provided primarily Health through specialty pharmacies • Revenue model is subscription-based, high margin • Growth plans include
adding new patients with existing or new pharmacy customers, increasing conditions treated using the system
17 • Best-in-class retailer support driving 05 prominent brand
placement on Strategic initiative leading sites • HBB’s strong product reviews and ratings online build brand equity Accelerate HBB has • Growth plans include online content capitalized on Digital consumer investments to drive
awareness/sell- shift to online through, online advertising and other shopping digital marketing strategies Transformation 48% of HBB’s U.S. consumer sales were from ecommerce in 2023, growing at 13% CAGR over the last 5 years
18 Identify businesses that fit strategically 06 within the Hamilton
Beach portfolio and Strategic initiative leverage Company’s many strengths PARTNERSHIPS Leverage Partnerships & ACQUISITIONS Acquisitions • Pursue additional trademark licensing agreements • Forge strategic alliances
19 Twelve Months Ending Income Statement Data 9/30/24 12/31/23 12/31/22
Financial Revenue $647,834 $625,625 $640,949 Gross Profit $169,736 $143,676 $129,114 Summary % of Revenue 26.2% 23.0% 20.1% Operating Profit $44,622 $35,081 $38,794 (In thousands) % of Revenue 6.9% 5.6% 6.1% • Strong recovery from global
supply chain As of challenges Balance Sheet Data 9/30/24 12/31/23 12/31/22 • Trending above historical profitability Total Assets $408,669 $384,702 $388,950 Net Working Capital¹ $135,362 $162,284 $209,414 Debt $50,000 $50,000 $110,895
• Asset light model Net Debt² $22,514 $34,630 $109,967 • Disciplined management of working capital Twelve Months Ending • Significant reduction of pandemic-related debt Free Cash Flow 9/30/24 12/31/23 12/31/22 Cash Flow from
Operations $55,130 $88,636 ($3,418) • Cash provided by operating activities $55M Capital Expenditures ($8,364) ($5,174) ($2,279) (TTM 9/30/2024) Free Cash Flow³ $46,766 $86,463 ($5,697) Capital Allocation • Disciplined capital
allocation strategy to Debt Addition (Reductions) ($1,266) ($60,916) $14,383 return shareholder value and invest in growth Cash Dividends Paid ($6,261) ($6,082) ($5,782) See Appendix for Non-GAAP reconciliations Share Repurchases ($11,469) ($3,074)
($2,979) ¹ NWC: Inventory plus Trade Receivables Net less Accounts Payable per the face of the Balance Sheet ² Net Debt: Debt less Cash and Cash Eequivalents per the face of the Balance Sheet Acquisitions ($7,412) $0 $0 ³ Free Cash
Flow: Cash Flow from Operations less Capital Expenditures
20 Revenue Growth Roadmap Fastest growing areas of HBB's Growth driven by
business are expected to be: 6 key strategic • Premium • Commercial initiatives • Health In 2024, the Small Kitchen Appliance market in North America is expected to be above 2023 and that trend is expected to continue in 2025 HBB
2024 total revenue is expected to increase modestly over 2023, outpacing the market due to progress with strategic initiatives
21 Key Margin Drivers Gross profit margin expansion from mix shift to
premium and commercial products 01 SG&A leverage as the business scales 02 HBB 2024 operating profit is expected to increase significantly compared to 2023, 03 due to gross profit margin expansion
22 Key: Strategic Global Footprint and Corporate HQ Operations Regional
HQ Sales rd 3 Party Manufacturers Health Asset-Light Business Model Dublin, Ireland Minneapolis, Markham, Ontario HealthBeacon HQ Canada HQ – Sales Minnesota Sales Office and Marketing Belleville, Ontario Distribution Center Geel, Belgium
Shanghai, China Distribution Center rd 3 Party Sales Office, Hamilton Beach outsources Manufacturing Engineering, Quality China Richmond, Virginia Assurance manufacturing within the Corporate Headquarters All Disciplines Asia Pacific region
Bentonville, Southern Pines, Arkansas North Carolina Sales Office Service Center, ~1% HealthBeacon Shenzhen, China Engineering, Quality of sales Byhalia, Assurance, Operations, and Distribution Center Results in low capex Mississippi Distribution
Center Orlando, Florida requirements Miami, Florida Sales Office HealthBeacon DC rd 3 Party Manufacturing Asia Pacific Provides significant free Mexico City, Mexico Tultitlan, Mexico cash flow for reinvestment Mexico HQ – Sales and
Distribution Center Marketing; Administrative
23 Strong Balance Sheet and Liquidity Goal is to maintain a $75M net debt
Ample liquidity conservative leverage reduction in 2023, to support growth profile not greater than Further reduced in 2024 investments 2.5x-3x
24 Disciplined Capital Allocation Priorities Reinvest in Return value to
shareholders the business • Maintain competitive dividends • Share repurchases Opportunistically buy back stock • Support organic growth o Repurchased 552,864 shares (TTM 9/30/2024) • Disciplined M&A strategy Paid $6.3M o
Goal is to offset dilution at a minimum focused on synergistic, in dividends (TTM 9/30/2024) bolt-on opportunities For 2024, Cash Flow from operating activities less cash used for investing activities is expected to be at the high end of HBB’s
normalized range of $25 million to $35 million per year.
25 Why Invest in HBB - Recap 01 02 03 Leader in large and growing Proven
innovator with 115 Strong relationships consumer housewares market, years of industry leading R&D with key customers across all with a powerful portfolio of markets and channels, with a iconic brands growing ecommerce presence 04 05 06 07 Six
strategic Asset-light business Disciplined capital Experienced initiatives to drive model generates allocation strategy of management team revenue growth and healthy free cash flow reinvestment in executing strategic margin expansion business,
returning priorities over time value to shareholders
Thank You
Appendix
28 As of Net Working Capital 9/30/24 12/31/23 12/31/22 Non-GAAP Trade
receivables, net $99,049 $135,434 $115,135 Inventory $164,802 $126,554 $156,038 Disclosure Less: Accounts Payable $128,489 $99,704 $61,759 • Net working capital, net debt and Net Working Capital $135,362 $162,284 $209,414 free cash flow are
non-GAAP financial measures that As of management uses in evaluating Net Debt 9/30/24 12/31/23 12/31/22 financial position. The presentation of these measures is not intended Total debt $50,000 $50,000 $110,895 to be considered in isolation from,
Less: Cash and cash equivalents $22,602 $15,370 $928 as a substitute for, or as superior to, Less: Highly liquid short-term investments $4,903 $0 $0 the financial information prepared Net Debt $22,495 $34,630 $109,067 and presented in accordance
with U.S. GAAP. The presentation of Twelve Months Ending these measures may be different Free Cash Flow 9/30/24 12/31/23 12/31/22 from non-GAAP financial measures Cash Flow from Operations $55,130 $88,636 ($3,418) used by other companies. A Less:
Capital Expenditures $8,364 $5,174 $2,279 reconciliation of these measures to Free Cash Flow $46,766 $86,463 ($5,697) its most directly comparable GAAP measure is provided in the table.
29 Presenters Scott Sally Tidey Cunningham President and SVP, CFO,
Treasurer CEO President and CEO since October Joined company in February 2023, bringing 2024. Previously Senior Vice strong public company experience and track President, Global Sales. Joined record of value creation, digital transformation, company
in 1993 and served in roles M&A integration. Previous public company of increasing responsibility. experience. Experienced management team with proven ability to execute and deliver results
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Grafico Azioni Hamilton Beach Brands (NYSE:HBB)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Hamilton Beach Brands (NYSE:HBB)
Storico
Da Gen 2024 a Gen 2025