Core Viewpoint - Hamilton Beach Brands Holding Company reported a solid performance in Q1 2025, with revenue growth and improved profitability despite macroeconomic challenges [2][3]. Financial Performance - Total revenue increased by 4.0% to $133.4 million compared to $128.3 million in Q1 2024, driven by a favorable product mix and increased volume [3][12]. - Gross profit rose to $32.8 million, representing a gross margin of 24.6%, up from 23.4% in the previous year, primarily due to a favorable product mix including the addition of HealthBeacon [4][12]. - Operating profit improved to $2.3 million from a loss of $0.9 million in the prior year [5][12]. - Net income was $1.8 million, or $0.13 per diluted share, compared to a net loss of $1.2 million, or $0.08 per diluted share, in Q1 2024 [5][12]. Cash Flow and Debt Management - Cash flow from operating activities was $6.6 million, a decrease from $19.7 million in Q1 2024, attributed to changes in working capital [6][12]. - The company reported net debt of $1.7 million, significantly reduced from $23.7 million a year earlier, indicating improved financial health [8][12]. Strategic Outlook - The company is facing increased uncertainty due to recent tariff hikes, particularly affecting products sourced from China, which has led to a temporary suspension of forward-looking guidance [9]. - Management is actively working to diversify the sourcing base and implement measures to mitigate the impact of higher tariffs, with expectations for improved margins in 2026 [2][9]. Shareholder Returns - In Q1 2025, the company repurchased 141,435 shares for $2.7 million and paid $1.6 million in dividends, reflecting a commitment to returning value to shareholders [7].

Group 1 - Hamilton Beach Brands (NYSE: HBB) is identified as a small firm with a market capitalization that is currently being considered for an upgrade [1] - The focus of Crude Value Insights is on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] Group 2 - Subscribers to the service gain access to a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2] - The service includes live chat discussions about the oil and gas sector, enhancing community engagement and information sharing [2]

Core Viewpoint - Hamilton Beach Brands Holding Company (HBB) has demonstrated strong financial performance in Q4 2024, with significant stock gains and a solid outlook for 2025, driven by revenue growth, improved gross margins, and strategic market expansions [1][17]. Revenue & Earnings Performance - HBB reported quarterly earnings per diluted share of $1.75, a 25% increase from $1.40 in Q4 2023 [2]. - Revenues for Q4 2024 reached $213.5 million, reflecting a 3.3% year-over-year increase from $206.7 million, attributed to higher volume and a favorable product mix [2]. - The gross margin for the quarter declined by 70 basis points to 26.1% from 26.8% in the prior-year quarter, but for the full year, it expanded by 300 basis points to 26%, marking a record high since HBB became a public entity in 2017 [3]. Profitability Metrics - Operating profit for Q4 declined 5.7% to $23.6 million from $25 million in the prior-year period, while net income rose 22.6% to $24 million from $19.6 million, primarily due to a foreign tax benefit [4]. - Operating cash flow for the year was $65.4 million, down from $88.6 million in 2023, with working capital contributing $14.5 million compared to $49.5 million in the previous year [5]. Expenses and Debt Management - SG&A expenses increased to $32.1 million in Q4 from $30.2 million in Q4 2023, driven by HealthBeacon acquisition costs [6]. - At the end of 2024, HBB reported a net cash position of $0.6 million, a significant improvement from a net debt of $34.6 million at the end of 2023 [7]. Management Insights - The CEO highlighted the achievement of financial targets despite a competitive market, attributing success to expansion into underserved markets and innovation [8]. - HBB gained market share in the U.S. and international markets, particularly in Mexico, where it became the third-largest small appliance brand [9]. Market Performance Factors - Revenue growth was supported by higher volumes in North America, particularly in the U.S. consumer market, while the Global Commercial segment faced slight declines [10]. - The February 2024 acquisition of HealthBeacon contributed $1.7 million to Q4 revenues and $4.3 million for the year [10]. Future Outlook - HBB expects the small kitchen appliance retail market to grow in the low-single-digit range in 2025, with the company anticipating mid-single-digit revenue growth [12]. - Operating profit is expected to rise faster than revenues, benefiting from operating leverage and a decrease in HealthBeacon-related SG&A expenses [13]. - The company aims to mitigate tariff impacts on 75% of its products by the end of 2025 through price increases and supplier concessions [14]. Strategic Developments - HBB is expanding into the healthcare sector through the integration of HealthBeacon, focusing on scaling its remote therapeutic monitoring system [15]. - The company has diversified its sourcing strategy to reduce reliance on China, mitigating sourcing risk for 35% of its business by the end of 2024, with plans to extend this to 75% by the end of 2025 [16].

Financial Data and Key Metrics Changes - Total revenue in Q4 2024 was $213.5 million, a 3.3% increase compared to Q4 2023, driven by a favorable product mix and higher volume, partially offset by average price decreases and foreign currency impacts [35] - Gross profit was $55.8 million in Q4 2024, compared to $55.3 million in the same period last year, with a gross profit margin of 26.1%, down from 26.8% [36][37] - For the full year 2024, net revenue increased 4.6% to $654.7 million, gross margin increased by 300 basis points to 26%, and operating profit increased 23.1% to $43.2 million [40][41] Business Line Data and Key Metrics Changes - The U.S. consumer business grew 3.6% in 2024, outpacing the overall market, while the Mexico and Latin America business saw even greater growth [14] - The HealthBeacon acquisition contributed $1.7 million in revenue during Q4 2024 [35] - The commercial business segment saw significant growth, highlighted by a 50% increase in sales of the Summit Edge blender [22] Market Data and Key Metrics Changes - The North American consumer markets delivered solid growth, particularly in the U.S., while international revenue experienced declines [35] - The small kitchen appliance retail market is expected to grow in the low single-digit range in 2025, with the company expecting to modestly outperform this growth [49] Company Strategy and Development Direction - The company is focused on six strategic initiatives aimed at long-term growth, including core growth, premium market share, global commercial leadership, health segment acceleration, digital transformation, and leveraging partnerships [12] - Plans for 2025 include expanding premium product offerings and increasing marketing investments to support growth initiatives [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in entering 2025 with solid momentum and a robust pipeline of new products, particularly in high-growth categories like specialty coffee and air fryers [28] - The company has taken proactive steps to mitigate tariff impacts, achieving a 35% mitigation by year-end 2024 and aiming for an additional 25% to 35% in 2025 [31][50] Other Important Information - The company returned over 65% of its 2024 net income to shareholders through share repurchases and dividends [42] - The net cash position at year-end 2024 was $600,000, a significant improvement from a net debt position of $34.6 million at the end of 2023 [46] Q&A Session Summary Question: What are the expectations for revenue growth in 2025? - The company expects revenue growth approaching the mid-single-digit range, modestly outperforming the industry [49] Question: How is the company addressing tariff impacts? - The company has mitigated 35% of its products against tariffs and plans to increase this to 75% in 2025 through price increases and supplier concessions [50]

Revenue and Profitability - Revenue for 2024 was $654.7 million, a 4.6% increase from $625.6 million in 2023, primarily driven by increased unit volume and a favorable product mix [140]. - Gross profit margin improved to 26.0% in 2024 from 23.0% in 2023, attributed to lower product and transportation costs [141]. - Net income increased by 21.9% to $30.8 million in 2024, compared to $25.2 million in 2023, with an effective tax rate dropping to 7.8% from 20.4% [140][146]. Expenses - Selling, general and administrative expenses rose by $18.3 million to $126.7 million, largely due to HealthBeacon expenses and increased employee-related costs [143]. Cash Flow and Liquidity - Cash and cash equivalents increased to $45.6 million in 2024 from $15.4 million in 2023, indicating improved liquidity [148]. - Net cash provided by operating activities was $65.4 million in 2024, down from $88.6 million in 2023, reflecting a normalization post-pandemic [154]. Debt and Financing - Interest expense decreased significantly by 79.6% to $0.6 million due to lower average borrowings and interest rates [144]. - The HBB Facility was amended to extend the term to December 2029, with a reduced credit facility of $125 million and an optional $25 million term loan [157]. - As of December 31, 2024, the excess availability under the HBB Facility was $57.3 million, with outstanding borrowings of $50.0 million [158]. - As of December 31, 2024, the weighted average interest rate applicable to the HBB Facility was 2.50% [160]. - The HBB Facility requires a fee of 0.20% per annum on the unused commitment [160]. - Total contractual cash obligations amount to $354,514,000, with $249,329,000 due in 2025 [165]. - A 0.25% increase in the Base Rate would increase estimated total annual interest payments on the HBB Facility by approximately $600,000 [165]. - HBB does not expect to make voluntary repayments under the HBB Facility in the next twelve months [163]. - HBB maintains compliance with all applicable financial covenants in the HBB Facility as of December 31, 2024 [162]. Financial Instruments - The fair value of interest rate swap agreements was a receivable of $4.0 million as of December 31, 2024 [174]. - A hypothetical 10% relative decrease in interest rates would decrease the fair value of interest rate swap agreements by $200,000 [174]. - The fair value of foreign currency exchange contracts was a net receivable of $800,000 as of December 31, 2024 [177]. - Assuming a hypothetical 10% weakening of the U.S. dollar, the fair value of foreign currency-sensitive financial instruments would decrease by $1.2 million [177]. Acquisition Impact - The acquisition of HealthBeacon contributed $4.3 million in revenue for 2024, adding a new revenue stream [140].

Revenue and Growth - Revenue for 2024 increased by 4.6% to $654.7 million compared to $625.6 million[3] - Fourth quarter revenue rose by 3.3% to $213.5 million compared to $206.7 million[3] - The acquisition of HealthBeacon contributed $4.3 million in revenue for the full year 2024[9] - The company expects revenue growth in 2025 to approach the mid-single digit range[17] Profitability - Full year gross margin expanded by 300 basis points to 26.0% compared to 23.0%[10] - Operating profit for the full year increased by 23.1% to $43.2 million compared to $35.1 million[12] - Net income for the full year was $30.8 million, or $2.20 per diluted share, compared to $25.2 million, or $1.80 per diluted share[13] - Net income for 2024 was $30,759,000, up from $25,242,000 in 2023, reflecting a year-over-year increase of 21.5%[27] Cash Flow and Liquidity - Cash flow from operations for 2024 was $65.4 million, down from $88.6 million in 2023[14] - Cash and cash equivalents rose significantly to $45,644,000 in 2024, compared to $15,370,000 in 2023, marking an increase of 197.5%[27] - Net cash provided by operating activities was $65,415,000 in 2024, compared to $88,636,000 in 2023, a decrease of 26.1%[27] - The company reported a net (cash) debt of $(0.6) million in 2024, down from $34.6 million in 2023, indicating a strong cash position[28] Expenses and Liabilities - SG&A expenses for the full year increased to $126.7 million, driven by HealthBeacon expenses and higher employee-related costs[11] - Total liabilities increased to $249,164,000 in 2024 from $237,435,000 in 2023, a rise of 4.0%[25] - Total debt at year-end 2024 was $50.0 million, with a net cash position of $0.6 million[15] Assets and Equity - Total assets increased to $415,067,000 in 2024 from $384,702,000 in 2023, representing a growth of 7.5%[25] - Stockholders' equity grew to $165,903,000 in 2024, up from $147,267,000 in 2023, indicating an increase of 12.7%[25] Other Financial Activities - The company made an acquisition in 2024, resulting in a cash outflow of $7,412,000[27] - Cash dividends paid increased slightly to $6,294,000 in 2024 from $6,082,000 in 2023, reflecting a growth of 3.5%[27] - Trade receivables decreased to $117,068,000 in 2024 from $135,434,000 in 2023, a decline of 13.5%[25]

Group 1 - Hamilton Beach Brands Holding Company will release its 2024 fourth quarter and full year financial results on February 26, 2025, after market close [1] - A conference call to discuss the results will be held on the same day at 4:30 p.m. Eastern Time, with a toll-free number provided for participants [1] - The conference call will be available via live webcast on the company's website, with an archive accessible later [1] Group 2 - Hamilton Beach Brands is a leading designer, marketer, and distributor of small electric household appliances and commercial products [2] - The company owns several consumer brands, including Hamilton Beach®, Proctor Silex®, and Hamilton Beach Professional®, among others [2] - In February 2024, Hamilton Beach Health acquired HealthBeacon, a medical technology firm focused on connected devices, expanding its presence in the home health market [2]

Company Participation - Hamilton Beach Brands Holding Company will participate in the 27th ICR Investor Conference from January 13-15, 2025, in Orlando, Florida [1] - The presentation is scheduled for January 13, 2025, at 9:00 a.m. Eastern Time and will be available via webcast [2] Company Overview - Hamilton Beach Brands Holding Company is a leading designer, marketer, and distributor of a variety of branded small electric household and specialty housewares appliances, as well as commercial products for restaurants, fast food chains, bars, and hotels [3] - The company owns several consumer brands, including Hamilton Beach®, Proctor Silex®, Hamilton Beach Professional®, Weston®, and TrueAir®, and commercial brands such as Hamilton Beach Commercial® and Proctor Silex Commercial® [3] - The company has licensing agreements for CHI® premium garment care products, Clorox™ True HEPA air purifiers, and Brita Hub™ countertop electric water filtration appliances [3] - Hamilton Beach Brands has exclusive multiyear agreements to design, sell, market, and distribute Bartesian® cocktail makers and Numilk® plant-based milk makers [3] - The Hamilton Beach Health subsidiary focuses on expanding the company's participation in the home health market, having acquired HealthBeacon, a medical technology firm specializing in connected devices, in 2024 [3]

Company Overview - Hamilton Beach Brands Holding Company has increased its Board of Directors from 11 to 13 members, appointing April L. Lane and Bela S. Mehta as new independent directors [1][2]. New Board Members - April L. Lane has extensive experience in e-commerce and consumer products, having held leadership roles at Thrive Market, Hearst Corporation, and Amazon, and has a background in retail strategy from Boston Consulting Group [2][3]. - Bela S. Mehta is a seasoned private equity partner and has been Managing Partner at CITG Capital Partners since 2004, with previous roles including President and Board Chairman of Little Switzerland, Inc. [3]. Company Products and Market Position - Hamilton Beach Brands is a leading designer, marketer, and distributor of small electric household appliances and commercial products, with owned consumer brands including Hamilton Beach®, Proctor Silex®, and Hamilton Beach Professional® [4]. - The company has exclusive agreements to design and distribute premium products such as Bartesian® cocktail machines and Numilk® non-dairy milk appliances, and is expanding into the home medical market through its subsidiary Hamilton Beach Health® [4].

Company Overview - Hamilton Beach Brands Holding Company (NYSE: HBB) has been established since 1910 and is recognized as a popular brand in the small home appliances sector, offering products such as blenders, mixers, toasters, and slow cookers [1] Research Principles - Grassroots Trading focuses on providing objective, unbiased, and balanced research, emphasizing solid data without emotional influences or preferences for specific companies [1] - The research targets small- to mid-cap companies, presenting compelling investment opportunities that are often overlooked, while also identifying potential opportunities in large- and mega-cap companies [1]