Form 8-K - Current report

Hamilton Beach Brands Holding Co false 0001709164 0001709164 2024-08-28 2024-08-28

 

 

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): August 28, 2024

 

 

HAMILTON BEACH BRANDS HOLDING COMPANY

(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)		(Zip code)

[phone]

(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:

 

☐

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:

 

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

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. ☐

 

 

 

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Item 7.01 Regulation FD Disclosure.

On August 28, 2024, members of management of Hamilton Beach Brands Holding Company will present an investor presentation at the 2024 Midwest IDEAS Investor Conference. 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 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.

(d) Exhibits

 

99		Hamilton Beach Brands Holding Company’s Investor Presentation dated August 28, 2024
104		Cover Page Interactive Data File (formatted as Inline XBRL)

 

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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.

 

Date: August 28, 2024						HAMILTON BEACH BRANDS HOLDING COMPANY
				By:		/s/ Sally M. Cunningham
				Name:		Sally M. Cunningham
				Title:		Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)/(Principal Accounting Officer)

Exhibit 99 Investor Presentation Three Part Advisors Midwest IDEAS Investor Conference AUGUST 28, 2024

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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.

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3 Company Overview Who We Are Markets Served • Hamilton Beach Brands Holding Company • Core Consumer market is North America (U.S., Canada, Mexico, • A leading designer, marketer and distributor of a wide range of Latin America) branded small electric household and specialty housewares appliances, as well as commercial • Increasing share of the Premium products for restaurants, fast food chains, bars and hotels small kitchen appliance market • Provider of connected devices and software for healthcare • Growing presence in global Commercial kitchen and hotel management amenities markets • Long tenured company (110+ years) • Burgeoning global Home Healthcare • Became public in 2017, traded on NYSE under ticker HBB solutions business as of 2021 • Annual revenue: ~$650 million • Leader in large and growing small appliances industry • Annual units sold: 25-30 million • Growing revenue profitability while reducing working capital and debt

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4 Investment Highlights 01 02 03 Leader in large and growing Proven innovator with 110+ 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 against margin expansion business, returning strategic priorities over time value to shareholders

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5 Luxury Powerful Brand Portfolio Flagship brands Hamilton Beach and Proctor Silex are well known and trusted names that have served consumers for 110+ years • Core business provides strong foundation Premium, to support newer growth initiatives Commercial, Health & • Exclusive multiyear trademark licensing Wellness 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

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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 June 30, 2024

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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, health & wellness markets • HBB grew dollar and unit market share in North America in 2023 and through first half of 2024¹ ¹ Source: Circana June 30, 2024

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8 2024 New Products Proprietary & Confidential

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9 Best-in-Class Customer Relationships Products distributed through all key channels Global Health North American Consumer Global Commercial Largest customers for flagship brands

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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

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11 01 Strategic initiative Hamilton Beach is the #1 small kitchen appliance brand in the U.S. by units sold¹ Drive Core • Proctor Silex brand is “Simply Better”, products feature sleek, practical designs at accessible price points Growth • Growth plans to increase revenue and market share focus on innovative new product development • 2024 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 • Increasing digital, social media and influencer marketing support ¹ Source: Circana June 30, 2024

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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 • HBB share of U.S. $3.6 billion market is ~3%, brands into providing significant room for growth¹ new premium Market lines • Accounted for 15% of HBB 2023 revenue • Growth plans include new brands such as the launch of Numilk machines to create fresh plant- based milks on demand in 2024 ¹ Source: Circana December 31, 2023

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13 Premium New Products

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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 2023 revenue Market • Growth plans include product innovations, increasing sales with existing/new customers, and leveraging HBB partnerships

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15 Commercial Growth Plans Further regional and global chain penetration • Blending and mixing • Back-of-house food prep Drive growth in EMEAI region Coffee Numilk commercial machine shops are a prime target

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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 through specialty pharmacies Health • 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

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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 2023 U.S. consumer sales were from ecommerce, growing at 13% CAGR over last 5 years

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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

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19 Twelve Months Ending Income Statement Data 6/30/24 12/31/23 12/31/22 Financial Revenue $644,781 $625,625 $640,949 Gross Profit $165,900 $143,676 $129,114 Summary % of Revenue 25.7% 23.0% 20.1% Operating Profit $48,427 $35,081 $38,794 (In thousands) % of Revenue 7.5% 5.6% 6.1% • Strong recovery from global supply chain As of challenges Balance Sheet Data 6/30/24 12/31/23 12/31/22 • Trending above historical profitability Total Assets $369,896 $384,702 $388,950 Net Working Capital¹ $118,783 $162,284 $209,414 Debt $50,000 $50,000 $110,895 • Asset light model Net Debt² $12,787 $34,630 $109,967 • Disciplined management of working capital Twelve Months Ending • Significant reduction of pandemic-related debt Free Cash Flow 6/30/24 12/31/23 12/31/22 Cash Flow from Operations $68,447 $88,636 ($3,418) • Cash provided by operating activities in the Capital Expenditures ($3,473) ($5,174) ($2,279) first half of 2024 was $37.1M Free Cash Flow³ $64,974 $86,463 ($5,697) Capital Allocation • Disciplined capital allocation strategy to Debt Addition (Reductions) ($9,858) ($60,916) $14,383 return shareholder value and invest in growth Cash Dividends Paid ($6,218) ($6,082) ($5,782) See Appendix for Non-GAAP reconciliations Share Repurchases ($7,038) ($3,074) ($2,979) ¹ NWC: Inventory plus Accounts Receivable Net less Accounts Payable per the face of the Balance Sheet ² Net Debt: Debt less Cash and Cash Equivalents per the face of the Balance Sheet Acquisitions ($7,412) $0 $0 ³ Free Cash Flow: Cash Flow from Operations less Capital Expenditures

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20 Revenue Growth Roadmap Fastest growing areas of HBB's Growth driven by business expected to be: 6 key strategic • Premium • Commercial initiatives • Health Small kitchen appliance market in 2024 projected to be modestly below 2023 HBB 2024 total revenue expected to increase modestly, outpacing market due to progress with strategic initiatives

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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 2024 operating profit expected to increase significantly due to gross profit margin expansion 03

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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 Hamilton Beach outsources 3 Party Sales Office, Manufacturing Engineering, Quality manufacturing primarily to Throughout China Richmond, Virginia Assurance Corporate Headquarters China and is diversifying All Disciplines within Asia Bentonville, Southern Pines, Arkansas North Carolina Sales Office Service Center, ~1% HealthBeacon Shenzhen, China Suzhou, China Engineering, Quality of sales Distribution Center 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 Throughout Asia Pacific Provides significant free Mexico City, Mexico Tultitlan, Mexico cash flow for reinvestment Mexico HQ – Sales and Distribution Center Marketing; Administrative

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23 Strong Balance Sheet and Liquidity Goal is to maintain a Ample liquidity conservative leverage $75M net debt to support growth profile not greater than reduction in 2023 investments 2.5x-3x

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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 414,011 shares (TTM 6/30/2024) • Disciplined M&A strategy Paid $6.2M o Goal is to offset dilution at a minimum focused on synergistic, in dividends (TTM 6/30/2024) bolt-on opportunities

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25 Why Invest in HBB? 01 02 03 Leader in large and growing Proven innovator with 110+ 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 against margin expansion business, returning strategic priorities over time value to shareholders

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Thank You

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Appendix

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28 As of Net Working Capital 6/30/24 12/31/23 12/31/22 Non-GAAP Trade receivables, net $85,038 $135,434 $115,135 Inventory $130,197 $126,554 $156,038 Disclosure Less: Accounts Payable $96,452 $99,704 $61,759 Net Working Capital $118,783 $162,284 $209,414 • Net working capital, net debt and free cash flow are non-GAAP financial measures that As of management uses in evaluating Net Debt 6/30/24 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 $37,213 $15,370 $928 as a substitute for, or as superior to, Net debt $12,787 $34,630 $109,067 the financial information prepared and presented in accordance with U.S. GAAP. The presentation of Twelve Months Ending these measures may be different Free Cash Flow 6/30/24 12/31/23 12/31/22 from non-GAAP financial measures Cash Flow from Operations $68,447 $88,636 ($3,418) used by other companies. A Less: Capital Expenditures $3,473 $5,174 $2,279 reconciliation of these measures to Free Cash Flow $64,974 $86,463 ($5,697) its most directly comparable GAAP measure is provided in the table.

Document and Entity Information	Aug. 28, 2024
Cover [Abstract]
Entity Registrant Name	Hamilton Beach Brands Holding Co
Amendment Flag	false
Entity Central Index Key	0001709164
Document Type	8-K
Document Period End Date	Aug. 28, 2024
Entity Incorporation State Country Code	DE
Entity File Number	001-38214
Entity Tax Identification Number	31-1236686
Entity Address, Address Line One	4421 WATERFRONT DR
Entity Address, City or Town	GLEN ALLEN
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23060
City Area Code	(804)
Local Phone Number	273-9777
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Class A Common Stock, Par Value $0.01 Per Share
Trading Symbol	HBB
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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