Core Viewpoint - Hamilton Beach Brands Holding Company experienced a significant decline in third-quarter 2025 results, with revenues down 15.2% year over year, reflecting ongoing challenges from tariffs and weak consumer demand [3][2][16] Financial Performance - Third-quarter 2025 revenues were reported at $132.8 million, down from $156.7 million in the previous year [3] - Gross profit fell 36% to $28 million, with the gross margin decreasing to 21.1% from 28% due to a one-time $5 million cost impact from a 125% tariff on Chinese imports [3][4] - Operating profit decreased to $2.9 million from $10.6 million, while net income slightly declined to $1.7 million, or 12 cents per diluted share, from $1.9 million, or 14 cents per diluted share, in the prior-year quarter [3] Cost Management - Selling, general and administrative expenses decreased by 25% year over year to $25.1 million, primarily due to reduced personnel costs and lower stock-based compensation [4] - Despite cost savings, the one-time tariff cost led to a significant drop in operating margin to 2.2% from 6.8% a year earlier [4] Cash Flow and Debt - Net cash used for operating activities in the first nine months of 2025 was $14.6 million, a reversal from $35.2 million in cash provided in the prior year, primarily due to a $27.5 million reduction in accounts payable [5] - As of September 30, 2025, net debt increased to $32.8 million from $22.5 million a year ago, with total debt remaining steady at $50 million [6] Management Insights - CEO R. Scott Tidey described the quarter as a period of "sequential improvement," noting normalization in retailer purchasing patterns and improved trade relations with China [7] - CFO Sally Cunningham indicated that the gross margin decline was largely temporary, with expectations for recovery as cost-saving measures and normalization of ordering patterns take effect [8] Revenue Drivers - The 15.2% year-over-year revenue drop was mainly due to lower volumes in the U.S. consumer business and a delay in orders from a major retailer [9] - Strength in the Commercial and Health segments partially offset this weakness [9] Tariff Impact - The temporary 125% tariff spike on Chinese imports compressed the gross margin by 370 basis points, with most of the impact absorbed by the company rather than passed on to customers [10] - Price increases implemented in June and August were accepted by retail partners, helping to mitigate future cost risks [10] Future Outlook - Hamilton Beach did not provide quantitative guidance due to ongoing tariff-related uncertainty but expects further recovery in top-line and margin in the fourth quarter [12] - CFO Cunningham noted that while recovery may not be linear in 2026, annual performance should benefit from actions taken in 2025 [13] Strategic Developments - The Hamilton Beach Health subsidiary achieved its first operating profit, with new partnerships and a 50% expansion in the patient subscription base [14] - The company continued its share repurchase program and maintained dividend payments, indicating confidence in its long-term outlook [15] Overall Assessment - The third-quarter results reflect progress in stabilizing the business post-tariff volatility, with management cautiously optimistic about future profitability driven by cost controls and product diversification [16]

Financial Data and Key Metrics Changes - Total revenue in Q3 2025 was $132.8 million, down 15.2% year-over-year but up 300 basis points compared to Q2 2025 [11] - Gross profit was $28 million, or 21.1% of total revenue, compared to $43.9 million, or 28% in the same period last year [12] - Operating profit was $2.9 million, or 2.2% of total revenue, down from $10.6 million, or 6.8% of total revenue in Q3 2024 [14] - Net income was $1.7 million, or 12 cents per diluted share, compared to $1.9 million, or 14 cents per diluted share a year ago [15] Business Line Data and Key Metrics Changes - The core business expanded its reach with the Kitchen Collections by Hamilton Beach line being rolled out to a leading mass-market retailer [6] - The commercial business delivered outstanding results, with strong demand for innovative solutions, although inventory constraints limited performance [8] - The Hamilton Beach Health division achieved positive operating profit for the first time this quarter, with new partnerships and product launches contributing to growth [9] Market Data and Key Metrics Changes - Retailers resumed typical buying patterns after destocking inventory, leading to improved sales trends in Q3 compared to Q2 [4] - The decline in revenue was primarily driven by lower volumes in the US consumer business due to overall softness in consumer demand [11] Company Strategy and Development Direction - The company is diversifying manufacturing away from China to other APAC countries to mitigate tariff impacts and improve procurement flexibility [5] - A robust pipeline of new products in high-growth categories is expected to drive market share gains, including successful launches in premium segments [7] - Comprehensive cost management measures generated $10 million in annualized savings, with benefits starting to materialize in Q3 [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning gross margins to historical levels as tariff impacts moderate and trade relations improve [10] - The company anticipates further progress in sales trends and gross margins in Q4 2025, despite ongoing market uncertainties [17] Other Important Information - The company repurchased approximately 39,000 shares totaling $0.6 million and paid $1.6 million in dividends during the quarter [16] - Net debt position increased to $32.8 million from $22.5 million at the end of the prior year period [16] Q&A Session Summary Question: Clarification on the $5 million tariff cost - The $5 million cost was related to the 125% tariff temporarily imposed in April and was absorbed as a one-time cost in Q3 [20][22] Question: Update on the largest retailer's ordering patterns - The largest retailer paused orders but has resumed normal shipping patterns, with expectations for a record number of promotional activities in Q4 [26][28]

Financial Performance - Revenue for Q3 2025 was $132.8 million, a decrease of 15.2% compared to $156.7 million in Q3 2024[11] - Gross profit for Q3 2025 was $28.0 million, down 36.3% from $43.9 million in Q3 2024[11] - Net income for the nine months ended September 30, 2025, was $7.9 million, an increase of 16.9% compared to $6.8 million for the same period in 2024[14] - Operating profit for the nine months ended September 30, 2025, was $11.1 million, down 43.5% from $19.6 million in the same period of 2024[11] - The net income for the three months ended September 30, 2025, was $1,653,000, compared to a net income of $5,986,000 for the same period in 2024[22] - Basic earnings per share for Q3 2025 were $0.12, compared to $0.14 in Q3 2024[11] - Comprehensive income for the nine months ended September 30, 2025, was $8.3 million, compared to $9.9 million for the same period in 2024[14] - Total revenues for the three months ended September 30, 2025, were $132.8 million, a decrease of 15.2% compared to $156.7 million for the same period in 2024[55] - Consumer product revenue for the nine months ended September 30, 2025, was $340.8 million, down 13.6% from $394.4 million in 2024[55] - Commercial product revenue increased to $42.4 million for the nine months ended September 30, 2025, compared to $39.9 million in 2024, reflecting a growth of 6.3%[55] - Licensing revenue for the nine months ended September 30, 2025, was $6.8 million, up 41.7% from $4.8 million in 2024[55] Assets and Liabilities - Total assets as of September 30, 2025, were $392.4 million, a decrease of 5.4% from $415.1 million at the end of 2024[9] - Total liabilities decreased to $228.3 million as of September 30, 2025, down 8.4% from $249.2 million at the end of 2024[9] - Cash and cash equivalents at the end of Q3 2025 were $17.2 million, a decrease of 24.5% from $22.6 million at the end of Q3 2024[9] - Total stockholders' equity as of September 30, 2025, was $164,048,000, with retained earnings of $126,953,000[20] - The company has $54.4 million in outstanding payment obligations to a third-party financial institution as of September 30, 2025[36] Shareholder Activities - The company paid cash dividends of $0.12 per share during the third quarter of 2025, totaling $1,619,000[20] - The company repurchased 396,065 shares for an aggregate purchase price of $7.2 million during the nine months ended September 30, 2025[42] - The company repurchased 39,333 shares for $0.6 million during the three months ended September 30, 2025, compared to 221,529 shares for $5.3 million in 2024[44] - As of September 30, 2025, the company had $4.2 million remaining authorized for share repurchase[42] Credit and Financing - The company has a $125.0 million senior secured floating-rate revolving credit facility expiring on December 13, 2029, which is expected to provide sufficient liquidity for operating needs[29] - The fair value of the HBB Facility was $125.0 million, determined using current rates for similar obligations[41] Environmental and Regulatory Matters - As of September 30, 2025, the Company accrued undiscounted obligations of $3.0 million for environmental investigation and remediation activities, down from $3.9 million as of December 31, 2024[58] - The Company estimates additional expenses related to environmental investigation and remediation could range from $0 to $1.0 million[58] Acquisitions - The Company completed the acquisition of HealthBeacon Limited for €6.9 million (approximately $7.5 million) on February 2, 2024[63] - HealthBeacon generated revenue of $1.887 million and an operating profit of $313,000 for the three months ended September 30, 2025[65] - The total assets acquired from HealthBeacon amounted to $10.191 million, with total liabilities of $2.632 million[67] Taxation - The effective tax rate for the three months ended September 30, 2025, was 18.4%, a decrease from 27.4% in the same period of 2024, primarily due to increased foreign derived tax benefits[60] Other Financial Information - The company reported a net cash used in operating activities of $14.6 million for the nine months ended September 30, 2025[17] - The company reported a share-based compensation expense of $569,000 for the three months ended September 30, 2025[20] - The company incurred transaction costs of approximately $0.2 million and $1.3 million during the three and nine months ended September 30, 2024, respectively[66] - The company completed the termination of its U.S. Pension Plan in 2024, with a pre-tax settlement charge of $7.6 million recognized in the third quarter of 2024[33] - The company transferred $13.4 million of surplus assets to a qualified replacement plan for employee retirement benefits in the first quarter of 2025[34] - The company expects revenue to increase during the second half of the year, peaking in the fourth quarter due to the fall holiday-selling season[28]

CONTACT: Brendon Frey Brendon.frey@icrinc.com HAMILTON BEACH BRANDS HOLDING COMPANY ANNOUNCES THIRD QUARTER 2025 RESULTS November 5, 2025 - Glen Allen, Virginia - Hamilton Beach Brands Holding Company (NYSE: HBB) (The Company) today announced results for the third quarter of 2025. Third Quarter 2025 Overview "We are pleased that our sales trend improved sequentially as retailer purchasing started to normalize during the third quarter following the significant disruption from new tariffs implemented in April ...

GLEN ALLEN, Va., Oct. 29, 2025 /PRNewswire/ -- Hamilton Beach Brands Holding Company (NYSE: HBB) announced today that it will release its 2025 third quarter financial results and file its 10-Q for the quarter ended September 30, 2025, after the market close on Wednesday, November 5, 2025. Accessibility StatementSkip Navigation HAMILTON BEACH BRANDS HOLDING COMPANY DECLARES QUARTERLY DIVIDEND The Company will host a conference call on Wednesday, November 5, 2025, to discuss its results. Conference Call:  ...

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Core Insights - Hamilton Beach Brands Holding Company (HBB) experienced a significant decline in stock price, losing 4.5% since the second quarter results were reported, compared to a slight decline of 0.1% in the S&P 500 index during the same period [1] - The company reported an 18.2% decrease in revenues for Q2 2025, totaling $127.8 million, down from $156.2 million year-over-year, alongside a drop in net income to $4.5 million from $6 million [2] - Despite revenue and net income declines, gross margin improved by 160 basis points to 27.5%, attributed to a favorable customer and product mix [2][7] Financial Performance - Operating profit fell 40.4% to $5.9 million from $10 million in the previous year [3] - Selling, general and administrative (SG&A) expenses decreased slightly to $29.1 million from $30.4 million, although this was partially offset by one-time severance expenses related to restructuring [3] - Cash flow from operations turned negative, with a net cash usage of $23.8 million in the first half of 2025, compared to a net cash inflow of $37.1 million in the same period last year, primarily due to higher inventory levels and reduced purchases [4] Strategic Actions - The CEO highlighted "dramatic" trade disruptions due to a 145% tariff increase on China exports, leading to market uncertainty and temporary halts in retail purchasing [6] - In response, the company is diversifying manufacturing away from China, selectively raising prices, and implementing cost-reduction programs, including an 8% workforce reduction [6] - Management noted that gross margin improvement was driven by stronger performance in higher-margin Commercial and Health divisions [7] Market Dynamics - The revenue decline was largely due to a temporary pause in retailer purchasing as businesses reassessed inventory in light of new U.S. tariffs [8] - Although purchasing resumed mid-quarter after a new trade agreement framework was announced, the final outcomes of tariff negotiations remain uncertain [8] - Constrained trade advertising and promotional activities were strategically undertaken to align with subdued retailer demand, impacting U.S. consumer segment sales [9] Future Outlook - The company opted to withhold financial guidance for the remainder of 2025 due to ongoing macroeconomic uncertainties [10] - Despite this, management expressed confidence in the long-term strategy, particularly in premium appliances, commercial partnerships, and healthcare offerings [11] - The launch of the Lotus premium brand and the expansion of the HealthBeacon platform are anticipated growth drivers [12][13] Partnerships and Innovations - Hamilton Beach is progressing with the Lotus premium brand launch, which includes several new products, with a marketing budget of over $5 million allocated for the next 18 months [12] - HealthBeacon, the digital health business, reported revenue growth to $1.7 million and aims to increase its patient subscription base by over 50% in 2025 [13] - The partnership with Sunkist for branded commercial juicers is expected to contribute 5% of commercial business revenues in 2025, with plans to double this in 2026 [14]

Financial Data and Key Metrics Changes - Total revenue in Q2 2025 was $127.8 million, down 18.2% from the previous year, primarily due to lower volumes in the U.S. Consumer business as retailers paused purchases [18] - Gross profit was $35.1 million, compared to $40.5 million in the same period last year, with a gross margin increase of 160 basis points to 27.5% [19] - Operating profit was $5.9 million, or 4.7% of total revenue, down from $10 million or 6.4% in the previous year [21] - Net income was $4.5 million, or $0.33 per diluted share, compared to $6 million, or $0.42 per diluted share, a year ago [21] - For the first half of 2025, revenue was $261.1 million, down 8.2% from 2024, with gross margin increasing 120 basis points to 26% [21] Business Line Data and Key Metrics Changes - The core business maintained its number one position in units in North America despite top-line headwinds [12] - The Health business generated $1.7 million in revenue for Q2, significantly improving from $859,000 last year, while reducing operating segment loss from $2 million to $864,000 [32] - The commercial business contributed positively to gross margin expansion and profitability, with expectations for SunCast revenue to be about 5% of the commercial business in 2025 and double in 2026 [14] Market Data and Key Metrics Changes - The U.S. business was adversely affected by increased tariffs, leading to a decrease in retailer demand [6] - Retailers paused purchasing in response to new tariffs, impacting sales volume [18] - Visibility remains limited due to ongoing tariff negotiations and their potential impact on consumer buying [23] Company Strategy and Development Direction - The company is diversifying manufacturing away from China to other Asia Pacific countries to minimize tariff exposure [7] - Strategic pricing actions were taken in June to align with current tariff rate increases, which were accepted by retail partners [9] - The company is optimistic about market opportunities for its core business, with key placements secured for the holiday season [12] - The Lotus brand launch is expected to be heavily supported with over $5 million in marketing over the next 18 months [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and brand strength despite near-term challenges [15] - The company is focused on maintaining market leadership and achieving long-term success through proactive measures [15] - Ongoing geopolitical events and trade negotiations create uncertainty in retailer planning and consumer demand [23] Other Important Information - The company realized $10 million in annualized savings from cost management measures, including an 8% reduction in force [9] - Net cash used for operating activities was $23.8 million for the first half of 2025, compared to a net cash provided of $37.1 million in the same period last year [22] - The restructuring charge for the quarter was approximately $800,000 [49] Q&A Session Summary Question: Performance of Health Beacon in Q2 - Management reported that the Health business had $1.7 million in revenue for Q2, significantly improving from last year, and is on track to meet growth targets [32] Question: Capital allocation plan regarding buybacks - Management indicated that stock buybacks are opportunistic and aim to avoid dilution from stock issuances [34][36] Question: Cost savings program details - A significant portion of the $10 million in annualized savings is headcount-related, primarily from the retail segment [41] Question: Pricing increases and competitive landscape - Management noted that pricing adjustments were made to cover tariffs, and competitors face similar challenges [43][48] Question: Long-term growth strategy - Management emphasized a focus on growth, particularly in the premium space, and expressed confidence in the company's strategy despite recent challenges [56][60]

[Part I. FINANCIAL INFORMATION](index=4&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements, including balance sheets, operations, cash flows, equity changes, and detailed notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) | Metric | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :-------------------------- | :-------------------------- | | **Assets** | | | | | Cash and cash equivalents | $11,338 | $45,644 | $37,213 | | Inventory | $160,357 | $124,904 | $130,197 | | Total current assets | $260,106 | $303,719 | $264,992 | | Total assets | $363,804 | $415,067 | $369,896 | | **Liabilities & Equity** | | | | | Accounts payable | $76,275 | $104,161 | $96,452 | | Revolving credit agreements (non-current) | $50,000 | — | — | | Total current liabilities | $105,492 | $154,120 | $177,645 | | Total liabilities | $199,829 | $249,164 | $224,164 | | Total stockholders' equity | $163,975 | $165,903 | $145,732 | - Total assets decreased by **$51.26 million** from December 31, 2024, to June 30, 2025, primarily driven by a significant reduction in cash and cash equivalents and trade receivables, partially offset by an increase in inventory[7](index=7&type=chunk) - Total liabilities decreased by **$49.34 million** from December 31, 2024, to June 30, 2025, mainly due to a decrease in accounts payable and other current liabilities, while **$50.00 million** in revolving credit agreements shifted from current to non-current[7](index=7&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenue | $127,770 | $156,240 | $261,142 | $284,517 | | Gross profit | $35,131 | $40,496 | $67,902 | $70,550 | | Operating profit (loss) | $5,948 | $9,956 | $8,261 | $9,013 | | Net income (loss) | $4,453 | $5,986 | $6,258 | $4,824 | | Basic and diluted EPS | $0.33 | $0.42 | $0.46 | $0.34 | - Revenue for the three months ended June 30, 2025, decreased by **18.2%** year-over-year, while net income decreased by **25.6%**[9](index=9&type=chunk) - For the six months ended June 30, 2025, revenue decreased by **8.2%** year-over-year, but net income increased by **29.7%**, and basic and diluted EPS rose from **$0.34 to $0.46**[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net income (loss) | $4,453 | $5,986 | $6,258 | $4,824 | | Foreign currency translation adjustment | $2,660 | $(1,868) | $2,987 | $(2,965) | | Cash flow hedging activity | $(1,115) | $1,555 | $(1,735) | $1,592 | | Total other comprehensive income (loss), net of tax | $1,080 | $(1,243) | $355 | $(1,760) | | Comprehensive income (loss) | $5,533 | $4,743 | $6,613 | $3,064 | - Comprehensive income for the three months ended June 30, 2025, increased to **$5.53 million** from **$4.74 million** in the prior year, primarily due to a positive shift in foreign currency translation adjustment[12](index=12&type=chunk) - For the six months ended June 30, 2025, comprehensive income more than doubled to **$6.61 million** from **$3.06 million** in the prior year, largely influenced by favorable foreign currency translation adjustments[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash provided by (used for) operating activities | $(23,773) | $37,071 | | Net cash provided by (used for) investing activities | $(1,466) | $(7,347) | | Net cash provided by (used for) financing activities | $(10,549) | $(7,683) | | Increase (decrease) in cash for the period | $(35,186) | $21,789 | | Balance at the end of the period | $11,338 | $38,168 | - Net cash used for operating activities significantly shifted from a positive **$37.07 million** in H1 2024 to a negative **$23.77 million** in H1 2025, a year-over-year decline of **$60.9 million**[14](index=14&type=chunk)[83](index=83&type=chunk) - Net cash used for investing activities decreased by **$5.88 million** in H1 2025 compared to H1 2024, primarily due to the absence of the HealthBeacon acquisition in the current period[14](index=14&type=chunk)[84](index=84&type=chunk) - Net cash used for financing activities increased to **$10.55 million** in H1 2025 from **$7.68 million** in H1 2024, driven by increased share repurchases[14](index=14&type=chunk)[85](index=85&type=chunk) [Consolidated Statements of Changes in Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) | Equity Component | Balance, Jan 1, 2025 (in thousands) | Balance, June 30, 2025 (in thousands) | Balance, Jan 1, 2024 (in thousands) | Balance, June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------- | :---------------------------------- | :---------------------------------- | :---------------------------------- | | Class A Common Stock | $115 | $118 | $112 | $114 | | Capital in Excess of Par Value | $76,668 | $78,673 | $70,401 | $73,483 | | Treasury Stock | $(26,202) | $(33,549) | $(12,013) | $(16,552) | | Retained Earnings | $123,863 | $126,919 | $99,398 | $101,078 | | Accumulated Other Comprehensive Income (Loss) | $(8,577) | $(8,222) | $(10,667) | $(12,427) | | Total Stockholders' Equity | $165,903 | $163,975 | $147,267 | $145,732 | - Total stockholders' equity decreased slightly from **$165.90 million** at January 1, 2025, to **$163.98 million** at June 30, 2025, primarily due to share repurchases and cash dividends, partially offset by net income[17](index=17&type=chunk) - Treasury stock increased by **$7.35 million** during the first six months of 2025, reflecting ongoing share repurchase activities[17](index=17&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes for financial statements, covering accounting policies, transactions, equity, revenue, and segments

Second Quarter 2025 Results Overview [Management Commentary and Strategic Response](index=1&type=section&id=Management%20Commentary%20and%20Strategic%20Response) Facing Q2 2025 challenges from new tariffs and macroeconomic headwinds, the company implemented strategic actions to improve gross margin and mitigate profitability impact - The second quarter faced challenges primarily due to trade disruptions from new tariff measures and macroeconomic headwinds[2](index=2&type=chunk) - The company implemented strategic actions, including accelerating manufacturing diversification, selective price increases, and reducing the fixed cost base[2](index=2&type=chunk) - Gross margin expanded by **160 basis points** through favorable customer mix shifts, including high-margin commercial and health businesses, mitigating sales pressure on profitability[2](index=2&type=chunk) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Q2 2025 saw revenue decline by 18.2% and operating profit worsen, despite a 160 basis point gross margin improvement and increased net debt Q2 2025 Key Financial Data Comparison | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | $127.8 | $156.2 | -18.2% | | Gross Margin | 27.5% | 25.9% | +160 basis points | | Operating Profit | $5.9 | $10.0 | -41.0% | | Total Debt | $50.0 | $50.0 | 0% | | Net Debt | $38.7 | $12.8 | +202.3% | Detailed Financial Performance (Q2 2025 vs Q2 2024) [Revenue Performance](index=2&type=section&id=Revenue%20Performance) Total revenue declined 18.2% year-over-year, driven by reduced U.S. consumer sales as retailers paused purchases amid inventory assessments and new tariff price increases - Total revenue decreased by **$28.5 million**, or **18.2%**, to **$127.8 million**[4](index=4&type=chunk) - The revenue decline was primarily driven by reduced sales volume in the U.S. consumer business, as some retailers paused purchases in Q2 to assess inventory levels and price increases from new tariffs[4](index=4&type=chunk) [Gross Profit and Margin](index=2&type=section&id=Gross%20Profit%20and%20Margin) Gross profit reached $35.1 million (27.5% of revenue), with gross margin up 160 basis points, driven by favorable U.S. consumer customer mix and higher-margin international and HealthBeacon sales - Gross profit was **$35.1 million**, representing **27.5%** of total revenue, compared to **$40.5 million** or **25.9%** in the prior year period[5](index=5&type=chunk) - The increase in gross margin was primarily attributable to a shift in the customer mix within the U.S. consumer business and a greater proportion of higher-margin sales from international commercial business and HealthBeacon during the period[5](index=5&type=chunk) [Operating Expenses and Profitability](index=2&type=section&id=Operating%20Expenses%20and%20Profitability) SG&A expenses decreased due to lower incentive costs, partially offset by restructuring severance, resulting in a significant year-over-year decline in operating profit - Selling, general, and administrative (SG&A) expenses decreased to **$29.1 million** from **$30.4 million** in the prior year period[6](index=6&type=chunk) - The decrease in SG&A was primarily driven by lower incentive-related personnel costs, partially offset by one-time severance costs incurred from restructuring actions taken by management to reduce the cost structure[6](index=6&type=chunk) - Operating profit decreased to **$5.9 million** from **$10.0 million** in the prior year period[6](index=6&type=chunk) [Net Income and Earnings Per Share](index=2&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) Both net income and diluted earnings per share for Q2 2025 were lower than the prior year period Net Income and Earnings Per Share Comparison | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--- | :--- | :--- | | Net Income | $4.5 | $6.0 | | Diluted EPS | $0.33 | $0.42 | Cash Flow and Debt Analysis [Operating Cash Flow (Six Months)](index=2&type=section&id=Operating%20Cash%20Flow%20(Six%20Months)) Operating cash flow for the six months ended June 30, 2025, shifted to a $23.8 million outflow, a sharp decline from prior year's inflow, primarily due to inventory and accounts payable changes from tariffs and slower sales - For the six months ended June 30, 2025, net cash used in operating activities was **$23.8 million**, a **$60.9 million** decrease from net cash provided of **$37.1 million** in the prior year period[8](index=8&type=chunk) - The primary reason was a **$50.8 million** impact from changes in inventory and accounts payable, attributed to increased inventory due to higher tariffs and accelerated purchases in Q1 2025[8](index=8&type=chunk) - Slower sales reduced inventory turns, while lower Q2 purchases decreased accounts payable, further impacting cash flow[8](index=8&type=chunk) [Shareholder Capital Returns](index=2&type=section&id=Shareholder%20Capital%20Returns) The company returned value to shareholders in the second quarter through share repurchases and quarterly dividends - The company repurchased **215,297 shares** of Class A common stock for a total of **$4.0 million**[9](index=9&type=chunk) - Dividends of **$1.6 million** were paid during Q2 2025[9](index=9&type=chunk) [Net Debt Position](index=2&type=section&id=Net%20Debt%20Position) As of June 30, 2025, net debt increased to $38.7 million, compared to $12.8 million in the prior year period - As of June 30, 2025, net debt was **$38.7 million**, compared to **$12.8 million** as of June 30, 2024[10](index=10&type=chunk) - Net debt is defined as total debt less cash and cash equivalents and highly liquid short-term investments[10](index=10&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) Due to increased uncertainty from recently implemented higher U.S. tariffs, particularly on China, the company has decided not to provide specific business outlook guidance - Given the increased uncertainty resulting from recently implemented higher U.S. tariffs, particularly on China, the company deems it prudent to maintain its practice of not providing specific business outlook guidance[11](index=11&type=chunk) Company Information [About Hamilton Beach Brands Holding Company](index=3&type=section&id=About%20Hamilton%20Beach%20Brands%20Holding%20Company) Hamilton Beach Brands is a leading designer, marketer, and distributor of small appliances, housewares, and commercial products, also providing connected healthcare solutions, with diverse brands and an active expansion into home health via its Health subsidiary - The company is a leading designer, marketer, and distributor of small household appliances, specialty housewares, and commercial products, also providing connected healthcare management devices and software[13](index=13&type=chunk) - It owns consumer brands like Hamilton Beach® and Proctor Silex®, commercial brands such as Hamilton Beach Commercial®, and licenses brands including CHI®, Clorox™, and Brita Hub™[13](index=13&type=chunk) - The Hamilton Beach Health subsidiary focuses on expanding into the home health and medical markets, having acquired medical technology company HealthBeacon in 2024[13](index=13&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements, subject to risks like global economic conditions, tariffs, and supply chain issues, which may cause actual results to differ materially; the company disclaims any obligation to revise these statements - Statements in the press release that are not historical facts are 'forward-looking statements,' subject to risks and uncertainties that could cause actual results to differ materially from expectations[14](index=14&type=chunk) - Risks and uncertainties include, but are not limited to: uncertain or adverse global economic conditions, tariff impacts, cost changes, supply chain capabilities, changes in consumer purchasing levels, retail market changes, bankruptcy of major customers or suppliers, currency fluctuations, changes in the regulatory environment, product liability, and increased competition[14](index=14&type=chunk) - The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof[14](index=14&type=chunk) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) The company will host an earnings conference call and webcast on Wednesday, July 30, 2025, at 4:30 PM ET, providing dial-in information and website access - The company will host an earnings conference call and webcast on Wednesday, July 30, 2025, at **4:30 PM ET**[12](index=12&type=chunk) - Dial-in numbers are **888-350-3452** (toll-free) or **646-960-0369** (international), with conference ID **1809480**[12](index=12&type=chunk) - The webcast will be available on the company's investor relations website at www.hamiltonbeachbrands.com and will be archived[12](index=12&type=chunk) Consolidated Financial Statements [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, presenting key financial metrics including revenue, costs, gross profit, operating expenses, operating profit, net income, and EPS Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2025 (Thousands USD) | Three Months Ended June 30, 2024 (Thousands USD) | Six Months Ended June 30, 2025 (Thousands USD) | Six Months Ended June 30, 2024 (Thousands USD) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $127,770 | $156,240 | $261,142 | $284,517 | | Cost of Sales | 92,639 | 115,744 | 193,240 | 213,967 | | Gross Profit | 35,131 | 40,496 | 67,902 | 70,550 | | Selling, General & Administrative Expenses | 29,105 | 30,397 | 59,485 | 61,344 | | Operating Profit (Loss) | 5,948 | 9,956 | 8,261 | 9,013 | | Net Income (Loss) | $4,453 | $5,986 | $6,258 | $4,824 | | Basic and Diluted EPS | $0.33 | $0.42 | $0.46 | $0.34 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This section presents the consolidated balance sheets as of June 30, 2025, December 31, 2024, and June 30, 2024, outlining assets, liabilities, and stockholders' equity, with changes in cash and accounts payable Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2025 (Thousands USD) | December 31, 2024 (Thousands USD) | June 30, 2024 (Thousands USD) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $11,338 | $45,644 | $37,213 | | Inventory | 160,357 | 124,904 | 130,197 | | Total Assets | $363,804 | $415,067 | $369,896 | | Accounts Payable | $76,275 | $104,161 | $96,452 | | Revolving Credit Facility | 50,000 | 50,000 | — | | Total Liabilities | 199,829 | 249,164 | 224,164 | | Total Stockholders' Equity | 163,975 | 165,903 | 145,732 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, outlining cash flows from operating, investing, and financing activities, noting a shift from net operating cash inflow to outflow Consolidated Statements of Cash Flows (Unaudited) | Activity Type | Six Months Ended June 30, 2025 (Thousands USD) | Six Months Ended June 30, 2024 (Thousands USD) | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | $(23,773) | $37,071 | | Net Cash (Used in) Provided by Investing Activities | $(1,466) | $(7,347) | | Net Cash (Used in) Provided by Financing Activities | $(10,549) | $(7,683) | | Ending Cash, Cash Equivalents, and Restricted Cash Balance | $11,338 | $38,168 | Non-GAAP Financial Measures Reconciliation [Net (Cash) Debt Reconciliation](index=8&type=section&id=Net%20(Cash)%20Debt%20Reconciliation) This section provides a reconciliation of the non-GAAP financial measure 'Net (Cash) Debt' to the most directly comparable GAAP measure, showing net debt of $38.7 million as of June 30, 2025 - Net (Cash) Debt is a non-GAAP financial measure used by management to assess financial position, defined as total debt less cash and cash equivalents and highly liquid short-term investments[22](index=22&type=chunk) Net (Cash) Debt Reconciliation (Millions USD) | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | | Total Debt | $50.0 | $50.0 | $50.0 | | Less: Cash and Cash Equivalents | $(11.3) | $(45.6) | $(37.2) | | Less: Highly Liquid Short-Term Investments | — | $(5.0) | — | | Net (Cash) Debt | $38.7 | $(0.6) | $12.8 |