UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
Amendment No. 1

			
(Mark One)	 	 	
þ	 	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 	 	For the fiscal year ended December 31, 2019	
or 

			
¨	 	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	

Commission File No. 001-38214
HAMILTON BEACH BRANDS HOLDING COMPANY
(Exact name of registrant as specified in its charter)

			
Delaware
(State or other jurisdiction of incorporation or organization)	 	31-1236686
(I.R.S. Employer Identification No.)	
 	 	 	
4421 Waterfront Dr. Glen Allen, VA
(Address of principal executive offices)	 	23060
(Zip Code)	
Registrant's telephone number, including area code: (804) 273-9777
Securities registered pursuant to Section 12(b) of the Act:

			
Title of each class	Trading Symbol	Name of each exchange on which registered	
Class A Common Stock, Par Value $0.01 Per Share	HBB	New York Stock Exchange	

Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock, Par Value $0.01 Per Share
(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
     YES ¨    NO þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
     YES ¨    NO þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
     YES ¨     NO þ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
     YES þ     NO ¨ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

					
Large accelerated filer ¨	Accelerated filer þ
	Non-accelerated filer ¨ 
(Do not check if a smaller reporting company)	Smaller reporting company þ	Emerging growth company þ	

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
     YES ¨    NO þ
Aggregate market value of Class A Common Stock and Class B Common Stock held by non-affiliates as of June 30, 2019 (the last business day of the registrant's most recently completed second fiscal quarter): $130,361,017
Number of shares of Class A Common Stock outstanding at July 17, 2020: 9,607,176
Number of shares of Class B Common Stock outstanding at July 17, 2020: 4,062,422
DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement for its 2020 annual meeting of stockholders are incorporated herein by reference in Part III of this Form 10-K/A.

					

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HAMILTON BEACH BRANDS HOLDING COMPANY
TABLE OF CONTENTS

				
 	 	 	PAGE	
PART I.	 	 	 	
 	Item 1.	BUSINESS	2	
 	Item 1A.	RISK FACTORS	5	
 	Item 1B.	UNRESOLVED STAFF COMMENTS	13	
 	Item 2.	PROPERTIES	14	
 	Item 3.	LEGAL PROCEEDINGS	14	
 	Item 4.	MINE SAFETY DISCLOSURES	14	
PART II.	 	 	 	
 	Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	14	
 	Item 6.	SELECTED FINANCIAL DATA	15	
 	Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	18	
 	Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	27	
 	Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	28	
 	Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	28	
 	Item 9A.	CONTROLS AND PROCEDURES	28	
 	Item 9B.	OTHER INFORMATION	29	
PART III.	 	 	 	
 	Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	30	
 	Item 11.	EXECUTIVE COMPENSATION	30	
 	Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	30	
 	Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	30	
 	Item 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	30	
PART IV.	 	 	 	
 	Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	31	
SIGNATURES	35	
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1	

 

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PART I
Explanatory Note

This Amendment No. 1 to Form 10-K (this "Amendment" or "Form 10-K/A") amends the Hamilton Beach Brands Holding Company's Annual Report on Form 10-K for the year ended December 31, 2019 originally filed with the Securities and Exchange Commission ("SEC") on February 26, 2020 by the Company (the "Original Filing"). This Amendment restates the Company's previously issued consolidated financial statements as of and for the years ended December 31, 2019, 2018 and 2017. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information. The relevant unaudited interim financial information for each of the quarters during the years ended December 31, 2019 and 2018 has also been restated. See Note 16, Quarterly Results of Operations (Unaudited), in Item 8, Financial Statements and Supplementary Data, for such restated information.

In connection with such restatement, the Company has also revised the selected financial information for the fiscal years ended December 31, 2016 and 2015, to correct errors that the Company has determined to be immaterial, both individually and in the aggregate. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data and Item 6, Selected Financial Data.

Restatement Background
During the quarter ended March 31, 2020, the Company discovered certain accounting irregularities at its Mexican subsidiaries. The Company’s Audit Review Committee of the Board of Directors (the “Audit Review Committee”) commenced an internal investigation, with the assistance of outside counsel and other third party experts.
The Audit Review Committee, after discussion with management of the Company and Ernst & Young LLP, the Company’s independent registered public accounting firm, concluded that the Company’s previously issued consolidated financial statements as of December 31, 2019 and 2018, for the years ended December 31, 2019, 2018 and 2017, each of the quarters during the years ended December 31, 2019 and 2018, and other financial data relating to these periods, including the financial data tables furnished to the SEC on Form 8-K, should no longer be relied upon.
Impact of the Restatement
As a result of this investigation, the Company, along with the Audit Review Committee and its third party experts, concluded that certain former employees at one of the Company’s Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries that resulted in expenditures being deferred on the balance sheet beyond the period for which the costs pertained. As a result, the Company recorded a non-cash write-off for certain amounts included in the Company’s historical consolidated financial statements in trade receivables and prepaid expenses and other current assets, among other corrections, related to these transactions, and restated its consolidated financial statements as of December 31, 2019 and 2018, for the years ended December 31, 2019, 2018, and 2017, and each of the quarters during the years ended December 31, 2019 and 2018. The impact of these adjustments was a reduction to net income from continuing operations of $10.0 million for the year ended December 31, 2019, $4.1 million for the year ended December 31, 2018, and $2.0 million for the year ended December 31, 2017. The findings from the internal investigation did not identify any misconduct by any member of the Company's senior management team. During the course of the investigation, certain expenses at the Mexican subsidiaries were found to be incorrectly classified within the consolidated statement of operations and have also been corrected in the restatement.
Other Adjustments

The restatement also includes corrections for other errors identified as immaterial, individually and in the aggregate, to our consolidated financial statements. See Note 2, Restatement of Previously Issued Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data for additional information regarding the corrections.

Control Considerations

In connection with the restatement that resulted from wrongdoing by certain former employees at one of the Company's Mexican subsidiaries and the deficiencies identified at the Mexican subsidiaries, management of the Company has determined that material weaknesses existed in the Company’s internal control over financial reporting as of December 31, 2019. As a result, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2019, and the Company’s management has concluded that its

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internal control over financial reporting was not effective as of December 31, 2019. See Item 9A, Controls and Procedures, for additional information related to these material weaknesses in internal control over financial reporting and the related remedial measures.
Items Amended in this Form 10-K/A

For reasons discussed above, we are filing this Amendment in order to amend the following items in our Original Filing to the extent necessary to reflect the adjustments discussed above and make corresponding revisions to our financial data cited elsewhere in this Amendment.

Part I, Item 1A. Risk Factors.
Part II, Item 6. Selected Financial Data.
Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Part II, Item 8. Financial Statements and Supplementary Data.
Part II, Item 9A. Controls and Procedures.

However, for the convenience of the reader, this Amendment sets forth the Original Filing in its entirety, as amended to reflect the restatement.

This Amendment speaks as of the filing date of the Original Filing and does not reflect events occurring after the filing date of the Original Filing.

The Company has not filed, and does not intend to file, amendments to (i) the Annual Reports on Form 10-K for the years ended December 31, 2018 or 2017, or (ii) the Quarterly Reports on Form 10-Q for the quarters of the years ended December 31, 2019 or 2018. Accordingly, investors should rely only on the financial information and other disclosures regarding the restated periods in this Form 10-K/A or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications relating to these periods.
 
In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by the Company’s principal executive officer and principal financial officer are filed herewith as exhibits to this Amendment pursuant to Rule 13a-14(a) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).

Item 1. BUSINESS
General

Hamilton Beach Brands Holding Company is an operating holding company and operates through its two wholly-owned subsidiaries Hamilton Beach Brands, Inc. (“HBB”) and The Kitchen Collection, LLC (“KC”) (collectively “Hamilton Beach Holding” or the “Company”). On October 10, 2019, the Company’s board of directors (the “Board”) approved the wind down of KC and its retail operations. By December 31, 2019, all KC stores were closed and the reportable segment qualifies to be reported as discontinued operations. On January 21, 2020, the Board approved the dissolution of the KC legal entity and a Certificate of Dissolution of Ohio Limited Liability Company was filed with the Ohio Secretary of State.

The only material assets held by Hamilton Beach Brands Holding Company are its investments in its consolidated subsidiaries. Substantially all of its cash flows are provided by dividends paid or distributions made by its subsidiaries. Hamilton Beach Brands Holding Company has not guaranteed any obligations of its subsidiaries.

KC is reported as discontinued operations in all periods presented. HBB is the Company's single reportable segment.

HBB is a leading designer, marketer, and distributor of branded, small electric household and specialty housewares appliances, as well as commercial products for restaurants, bars, and hotels. HBB operates in the consumer, commercial and specialty small appliance markets.

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On September 29, 2017, NACCO Industries, Inc. ("NACCO"), Hamilton Beach Holding's former parent company, spun-off the Company to NACCO stockholders. In the spin-off, NACCO stockholders, in addition to retaining their shares of NACCO common stock, received one share of Hamilton Beach Brands Holding Company Class A common stock ("Class A Common") and one share of Hamilton Beach Brands Holding Company Class B common stock ("Class B Common") for each share of NACCO Class A or Class B common stock. In accordance with applicable authoritative accounting guidance, the Company accounted for the spin-off from NACCO based on the historical carrying value of assets and liabilities. As a result of the distribution of one share of Class A Common and one share of Class B Common for each share of NACCO Class A or NACCO Class B common stock, the earnings per share amounts for the Company for periods prior to the spin-off have been calculated based upon the number of shares distributed in the spin-off. NACCO did not receive any proceeds from the spin-off.

The Company makes its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports available, free of charge, through its website, www.hamiltonbeachbrands.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). The content of our website is not incorporated by reference into this annual report on Form 10-K/A or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only.
Sales and Marketing
HBB designs, markets and distributes a wide range of branded, small electric household and specialty housewares appliances, including, but not limited to, air fryers, blenders, coffee makers, food processors, indoor electric grills, irons, juicers, mixers, slow cookers, toasters and toaster ovens. The Company also sells TrueAir® air purifiers. HBB also designs, markets and distributes commercial products for restaurants, fast food chains, bars and hotels. In 2019, HBB introduced sonic rechargeable toothbrushes under the BrightlineTM brand name through the ecommerce channel. HBB generally markets its “better” and “best” consumer products under the Hamilton Beach® brand and uses the Proctor Silex® brand for the “good” and value price points. HBB participates in the premium or “only-the-best” market with the Hamilton Beach® Professional brand and the Weston® brand game and garden food processing equipment. Additionally, the Company has multiyear licensing agreements to sell a line of countertop appliances and kitchen tools under the Wolf Gourmet® brand and a line of premium garment care products under the CHI® brand. In 2019, HBB began selling the Bartesian® premium cocktail delivery system through an exclusive multiyear agreement. HBB markets its commercial products under the Hamilton Beach Commercial® and the Proctor Silex Commercial® brands. HBB supplies private label products on a limited basis. HBB also licenses certain of its trademarks to various licensees, primarily for use with microwave ovens, compact refrigerators, and water dispensers, among others.
Sales promotion activities are primarily focused on digital marketing channels. HBB promotes certain of its innovative products through the use of television, internet and print advertising.
Customers
Sales in North America are generated predominantly by a network of inside sales employees to mass merchandisers, ecommerce retailers, national department stores, variety store chains, drug store chains, specialty home retailers, distributors, restaurants, bars, hotels and other retail outlets. Wal-Mart Inc. and its global subsidiaries accounted for approximately 33%, 33% and 32% of the HBB’s revenue in 2019, 2018 and 2017, respectively. Amazon.com, Inc. and its subsidiaries accounted for approximately 14%, 10% and 12% of the HBB's revenue in 2019, 2018 and 2017, respectively. HBB’s five largest customers accounted for approximately 58%, 53%, and 54% of the HBB’s revenue for the years ended December 31, 2019, 2018 and 2017, respectively.
Product Warranty
HBB's warranty program to the consumer consists generally of an assurance-type limited warranty lasting for varying periods of up to ten years for electric appliances, with the majority of products having a warranty of one to three years.  There is no guarantee to the consumer as HBB may repair or replace, at its option, those products returned under warranty.
Working Capital
The market for small electric household and specialty housewares appliances is highly seasonal in nature. The majority of HBB's revenue and operating profit typically occurs in the second half of the year due to the fall holiday-selling season. Due to the seasonality of purchases of its products, HBB generally uses a substantial amount of cash or short-term debt to finance inventory in anticipation of the fall holiday-selling season.
Patents, Trademarks, Copyrights and Licenses
HBB holds patents and trademarks registered in the United States ("U.S.") and foreign countries for various products. HBB believes its business is not dependent upon any individual patent, copyright or license, but that the Hamilton Beach®, Proctor Silex®, Hamilton Beach® Professional, and Weston® trademarks are material to its business.

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Product Design and Development
HBB incurred $12.1 million, $11.0 million and $10.4 million in 2019, 2018 and 2017, respectively, on product design and development activities.
Key Suppliers and Raw Material
HBB’s products are supplied to its specifications by third-party suppliers located primarily in China. HBB does not maintain long-term purchase contracts with suppliers and operates mainly on a purchase order basis. HBB generally negotiates the purchases from its foreign suppliers in U.S. dollars.
During 2019, HBB purchased substantially all of its finished products from suppliers in China. HBB purchases its inventory from approximately 63 suppliers, one of which represented more than 10% of purchases during the year ended December 31, 2019. HBB believes the loss of any one supplier would not have a long-term material adverse effect on its business because there are adequate supplier choices available that can meet HBB’s production and quality requirements. However, the loss of a supplier could, in the short term, adversely affect HBB’s business until alternative supply arrangements are secured.
The principal raw materials used by HBB’s third-party suppliers to manufacture its products are plastic, glass, steel, copper, aluminum and packaging materials. HBB believes adequate quantities of raw materials are available from various suppliers.
Competition
The small electric household appliance industry does not have substantial entry barriers. As a result, HBB competes with many manufacturers and distributors of housewares products. Based on publicly available information about the industry, HBB believes it is one of the largest full-line distributors and marketers of small electric household and specialty housewares appliances in North America based on key product categories.
To a lesser degree, HBB product lines compete in South America, Europe, and certain emerging markets such as Brazil and China. The competition in these geographic markets is also fragmented and HBB is not yet a significant participant although our commercial business has generated a strong position in these markets.
As brick and mortar retailers generally purchase a limited selection of branded, small electric appliances, HBB competes with other suppliers for retail shelf space. In the ecommerce channel, HBB must compete with a broad list of competitors. HBB believes the principal areas of competition with respect to its products are product design and innovation, quality, price, product features, supply chain excellence, merchandising, promotion and warranty.
Government Regulation
HBB is subject to numerous federal and state health, safety and environmental regulations. HBB believes the impact of expenditures to comply with such laws will not have a material adverse effect on HBB.
As a marketer and distributor of consumer products, HBB is subject to the Consumer Products Safety Act and the Federal Hazardous Substances Act, which empower the U.S. Consumer Product Safety Commission (“CPSC”) to seek to exclude products that are found to be unsafe or hazardous from the market. Under certain circumstances, the CPSC could require HBB to repair, replace or refund the purchase price of one or more of HBB’s products, or HBB may voluntarily do so.
Throughout the world, electrical appliances are subject to various mandatory and voluntary standards, including requirements in some jurisdictions that products be listed by Underwriters’ Laboratories, Inc. (“UL”) or other similar recognized laboratories. HBB also uses Intertek Testing Services for certification and testing of compliance with UL standards, as well as other national and industry specific standards. HBB endeavors to have its products designed to meet the certification requirements of, and to be certified in, each of the jurisdictions in which they are sold.

Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") requires public companies to disclose whether certain minerals, commonly known as "conflict minerals," are necessary to the functionality or production of a product manufactured by those companies and if those minerals originated in the Democratic Republic of the Congo ("DRC") or an adjoining country. HBB conducts supply-chain due diligence investigations required by the conflict minerals rules and makes disclosures required by the Dodd Frank Act. Our compliance with these investigation and disclosure requirements could adversely affect our ability to sell products to customers that HBB is unable to designate as "DRC conflict free."
Transactions with Related Parties

Mr. Alfred M. Rankin is the former executive chairman of the Company and current non-executive chairman of the Board of the Company. Mr. Rankin provides consulting services to the Company under the terms of a consulting agreement pursuant to

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which Mr. Rankin supports the president and chief executive officer of the Company upon request. Fees for consulting services rendered by Mr. Rankin were $0.5 million for the year ended December 31, 2019. There were no fees for consulting services rendered by Mr. Rankin in 2018.
Employees
As of December 31, 2019, HBB’s work force consisted of approximately 680 employees.

Information about our Executive Officers
There exists no arrangement or understanding between any executive officer and any other person pursuant to which such executive officer was selected.
The following tables set forth, as of February 26, 2020, the name, age, current position and principal occupation and employment during the past five years of the Company’s executive officers.
EXECUTIVE OFFICERS OF THE COMPANY

								
Name	 	Age	 	Current Position	 	Other Positions	
 	 	 	 	 	 	 	
Gregory H. Trepp	 	58		 	President and Chief Executive Officer of Hamilton Beach Holding (from September 2017); President and Chief Executive Officer of HBB (from prior to 2014); Chief Executive Officer of KC (from prior to 2014)	 	 	
Gregory E. Salyers	 	59		 	Senior Vice President, Global Operations of HBB (from prior to 2014)	 	 	
R. Scott Tidey	 	55		 	Senior Vice President, North America Sales and Marketing of HBB (from prior to 2014)	 	 	
Michelle O. Mosier	 	54		 	Senior Vice President, Chief Financial Officer and Treasurer of Hamilton Beach Holding (since January 2020); Successor Vice President and Chief Financial Officer of HBB (since October 2018)	 	Chief Financial Officer of United Sporting Companies (from September 2015 to June 2018) a subsidiary of SportsCo Holding, Inc. which filed for Chapter 11 bankruptcy in June 2019, and Controller for Reynolds Groups Holdings Limited (from September 2011 to August 2015).	
Dana B. Sykes	 	58		 	Senior Vice President, General Counsel and Secretary of Hamilton Beach Holding (from January 2020); Vice President, General Counsel and Secretary of HBB (from September 2015); Assistant Secretary of KC (from May 2015)	 	From July 2014 to September 2015, Associate General Counsel, Assistant Secretary and Senior Director, Human Resources of HBB. From prior to 2014 to July 2014, Assistant General Counsel and Director, Human Resources of HBB.	

Item 1A. RISK FACTORS

The restatement of our financial statements may lead to, among other things, shareholder litigation, loss of investor confidence, negative impacts on our stock price and certain other risks.

We have restated our previously issued consolidated financial statements as of December 31, 2019 and 2018, for the years ended December 31, 2019, 2018 and 2017, and the relevant unaudited interim financial information for each of the quarters during the years ended December 31, 2019 and 2018 to correct misstatements principally related to the write-off of unrealizable assets. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information. As a result of the circumstances giving rise to the restatement, we have become subject to a number of additional risks and uncertainties, including unanticipated costs for accounting and legal fees in connection with or related to the restatement, shareholder litigation and government investigations. Any such proceeding could result in substantial defense costs regardless of the outcome of the litigation or investigation. If we do not prevail in any such litigation, we could be required to pay substantial damages or settlement costs. In addition, the restatement and related matters could impair our reputation and could cause our counterparties to lose confidence in us. Each of these occurrences could have an adverse effect on our business, results of operations, financial condition and stock price.

We have identified material weaknesses in our internal control over financial reporting which, if not timely remediated, may adversely affect the accuracy and reliability of our financial statements, and our reputation, business and stock price, as well as lead to a loss of investor confidence in us.

As described under Item 9A, Controls and Procedures, below, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that material weaknesses in our internal control over financial reporting existed at our Mexican

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subsidiaries as of December 31, 2019 and, accordingly, our internal control over financial reporting and our disclosure controls and procedures were not effective as of such date. We intend to remediate these material weaknesses. While we believe these steps will improve the effectiveness of our internal control over financial reporting and remediate the identified deficiencies, if our remediation efforts are insufficient to address the material weaknesses or we identify additional material weaknesses in our internal control over financial reporting in the future, our ability to analyze, record and report financial information accurately, to prepare our financial statements within the time periods specified by the rules and forms of the SEC and to otherwise comply with our reporting obligations under the federal securities laws will likely be adversely affected. The occurrence of, or failure to remediate, these material weaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect the accuracy and reliability of our financial statements and have other consequences that could materially and adversely affect our business, including an adverse impact on the market price of our common stock, potential actions or investigations by the SEC or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation.

HBB’s business is sensitive to the strength of the North American consumer markets and weakness in these markets could
adversely affect its business.

The strength of the economy in the U.S., and to a lesser degree in Canada and Mexico, has a significant impact on HBB’s performance. Weakness in consumer confidence and poor financial performance by mass merchandisers, ecommerce retailers, warehouse clubs, department stores or any of HBB’s other customers could result in reduced revenue and profitability. A general slowdown in the consumer sector could result in additional pricing and marketing support pressures on HBB.

HBB is dependent on key customers and the loss of, or significant decline in business from, one or more of its key customers could materially reduce its revenue and profitability and its ability to sustain or grow its business.

HBB relies on several key customers. Although HBB has long-established relationships with many customers, it does not have any long-term supply contracts with these customers, and purchases are generally made using individual purchase orders. A loss of or significant reduction in sales to any key customer could result in significant decreases in HBB’s revenue and profitability and an inability to sustain or grow its business.

HBB must receive a continuous flow of new orders from its large, high-volume retail customers; however, it may be unable to continually meet the needs of those customers. In addition, failure to obtain anticipated orders or delays or cancellations of orders or significant pressure to reduce prices from key customers could impair its ability to sustain or grow its business.
    
As a result of dependence on its key customers, HBB could experience a material adverse effect on its revenue and profitability if any of the following were to occur:

•	the insolvency or bankruptcy of any key customer;	

•	a declining market in which customers materially reduce orders or demand lower prices; or	

•	a strike or work stoppage at a key customer facility, which could affect both its suppliers and customers.	
If HBB were to lose, or experience a significant decline in business from any major customer, or if any major customers were to go bankrupt, HBB might be unable to find alternate distribution outlets.

HBB is subject to foreign currency exchange risk.

HBB’s products are supplied by third-party suppliers located primarily in China. HBB generally negotiates the purchases from its foreign suppliers in U.S. dollars. A weakening of the U.S. dollar against local currencies could result in certain non-U.S. manufacturers increasing the U.S. dollar prices for future product purchases.

As a result of our international operations, we are exposed to foreign currency risks that arise from our normal business operations, including risks in connection with our transactions that are denominated in foreign currencies. In addition, we translate sales and other results denominated in foreign currencies into U.S. dollars for purposes of our consolidated financial statements. As a result, appreciation of the U.S. dollar against these foreign currencies generally will have a negative impact on our reported revenues and profitability, while depreciation of the U.S. dollar against these foreign currencies will generally have a positive effect on reported revenues and profitability.

Any hedging activities HBB engages in may only offset a portion of the adverse financial impact resulting from unfavorable changes in foreign currency exchange rates. HBB cannot predict with any certainty changes in foreign currency exchange rates or the degree to which HBB can mitigate these risks.

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Increases in costs of products may materially reduce our profitability.

Factors that are largely beyond HBB's control, such as movements in in-bound transportation rates and commodity prices for the raw materials needed by suppliers of HBB’s products, may affect the cost of products, and HBB may not be able to pass those costs on to its customers. As an example, HBB’s products require a substantial amount of plastic. Because the primary resource used in plastic is petroleum, the cost and availability of plastic varies to a great extent with the price of petroleum. When the prices of petroleum, as well as steel, aluminum and copper, increase significantly, supplier price increases may materially reduce our profitability.

The increasing concentration of HBB’s branded small electric household and specialty housewares appliance sales among a few retailers and the trend toward private label brands could materially reduce revenue and profitability.

With the growing trend towards the concentration of HBB’s branded small electric household and specialty housewares appliance sales among fewer retailers, HBB is increasingly dependent upon fewer customers whose bargaining strength is growing as a result of this concentration. HBB sells a substantial quantity of products to mass merchandisers, ecommerce retailers, national department stores, variety store chains, drug store chains, specialty home retailers and other retail outlets. As a result, these retailers generally have a large selection of small electric household and specialty housewares appliance suppliers to choose from. In addition, certain of HBB’s larger customers use their own private label brands on household appliances that compete directly with some of HBB’s products. As the retailers in the small electric household appliance industry become more concentrated, competition for sales to these retailers may increase, which could materially reduce our revenue and profitability.

If HBB is unable to continue to enhance existing products, as well as develop and market new products that respond to customer needs and preferences and achieve market acceptance, we may experience a decrease in demand for our products,
which could materially reduce revenue and profitability, which have historically benefited from sales of new products.

HBB may not be able to compete as effectively with competitors, and ultimately satisfy the needs and preferences of customers, unless HBB can continue to enhance existing products and develop new innovative products for the markets in which HBB competes. Product development requires significant financial, technological, and other resources. Product improvements and new product introductions also require significant research, planning, design, development, engineering, and testing at the technological and product process levels and HBB may not be able to timely develop and introduce product improvements or new products. Competitors’ new products may beat HBB’s products to market, be higher quality or more reliable, be more effective with more features, obtain better market acceptance, or render HBB’s products obsolete. Any new products that HBB develops may not receive market acceptance or otherwise generate any meaningful revenue or profit relative to our expectations based on, among other things, commitments to fund advertising, marketing, promotional programs and development.

HBB’s inability to compete effectively with competitors in its industry could result in lost market share and decreased revenue.

The small electric household, specialty housewares appliances and commercial appliance industry does not have substantial entry barriers. As a result, HBB competes with many manufacturers and distributors of housewares products. Additional competitors may also enter this market and cause competition to intensify. For example, some of HBB’s customers have expressed interest in sourcing, or expanding the extent of sourcing, small electric household and commercial appliances directly from manufacturers in Asia. We believe competition is based upon several factors, including product design and innovation, quality, price, product features, merchandising, promotion and warranty. If HBB fails to compete effectively with these manufacturers and distributors, it could lose market share and experience a decrease in revenue, which would adversely affect our results of operations.
 
HBB also competes with established companies, a number of which have substantially greater facilities, personnel, financial and other resources. In addition, HBB competes with its own retail customers, who use their own private label brands, and importers and foreign manufacturers of unbranded products. Some competitors may be willing to reduce prices and accept lower profit margins to compete. As a result of this competition, HBB could lose market share and revenue.

Changes in consumer shopping trends and changes in distribution channels could result in lost market share and decreased revenue and profitability.

Traditional brick-and-mortar retail channels have experienced low growth or declines in recent years, while the ecommerce channel has experienced significant growth. Consumer shopping preferences have shifted, and may continue to shift in the

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future, to distribution channels other than traditional brick-and-mortar retail channels. Success in the ecommerce channel requires providing products at the right price, products that earn strong ratings and reviews and meaningful engagement with online shoppers. HBB has invested in industry leading selling and marketing capabilities, while maintaining its presence in traditional brick-and-mortar retail channels. However, if we are not successful in developing and utilizing ecommerce channels that future consumers may prefer, we may experience a loss in market share and decreased revenue and profitability.

HBB may become subject to claims under foreign laws and regulations, which may be expensive, time-consuming and distracting.

Because HBB has employees, property and business operations outside of the U.S., HBB is subject to the laws and the court systems of many jurisdictions. HBB may become subject to claims outside the U.S. for violations or alleged violations of laws with respect to the current or future foreign operations of HBB. In addition, these laws may be changed or new laws may be enacted in the future. International litigation is often expensive, time-consuming and distracting. As a result, any of these risks could significantly reduce HBB’s profitability and its ability to operate its businesses effectively.

HBB’s obligations relating to environmental matters may exceed our expectations.

HBB is subject to laws and regulations relating to the protection of the environment, including those governing the
management and disposal of hazardous substances. HBB is investigating or remediating historical contamination at some current and former sites related to HBB’s prior manufacturing operations or the operations of businesses HBB acquired. The costs of investigating and remediating historical contamination may increase based on the findings of investigations and the effectiveness of remediation methods. In addition, the discovery of additional contamination at these or other sites could result in significant cleanup costs that could have a material adverse effect on HBB’s financial conditions and results of operations. Future changes to environmental laws could require HBB to incur significant additional expense.

HBB could, under some circumstances, also be held financially liable for or suffer other adverse effects due to environmental violations or contamination caused by prior owners of businesses HBB has acquired. In certain circumstances, HBB’s financial liability for cleanup costs takes into account agreements with an unrelated third party. HBB’s liability for these costs could increase if the unrelated third party does not, or cannot, perform its obligations under those agreements. In addition, under some of the agreements through which HBB has sold real estate, HBB has retained responsibility for certain contingent environmental liabilities arising from pre-closing operations. These liabilities may not arise, if at all, until years after HBB sold these operations and could require us to incur significant additional expenses, which could materially adversely affect HBB’s results of operations and financial condition.

The Company is subject to litigation risk which could adversely affect our financial condition, results of operations and liquidity.

From time to time we are subject to claims involving product liability, infringement of intellectual property and patent rights of third parties and other matters. Any such claims, with or without merit, could be time consuming and expensive, and may require the Company to incur substantial costs and divert the resources of management. Due to the uncertainties of litigation, unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of an adverse impact on the Company’s financial position, results of operations and cash flows of the period in which the ruling occurs, or in future periods.
  
To the extent that HBB relies on newly acquired businesses or new product lines to expand its business, these acquisitions or new product lines may not contribute positively to HBB’s earnings because anticipated sales volumes and synergies may not materialize, cost savings may be less than expected or acquired businesses may carry unexpected liabilities.

HBB may acquire partial or full ownership in businesses or may acquire rights to market and distribute particular products or lines of products. The acquisition of a business or of the rights to market specific products or use specific product names may involve a financial commitment by HBB, either in the form of cash or stock consideration. HBB may not be able to acquire businesses and develop products that will contribute positively to HBB’s earnings. Anticipated synergies may not materialize, cost savings may be less than expected, sales of products may not meet expectations or acquired businesses may carry unexpected liabilities.

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HBB’s business involves the potential for product recalls, which could affect HBB’s revenue and profitability.

As a marketer and distributor of consumer products, HBB is subject to the Consumer Products Safety Act and the Federal Hazardous Substances Act, which empower the CPSC to seek to exclude from the market those products that are found to be unsafe or hazardous. Under certain circumstances, the CPSC could require HBB to repair, replace or refund the purchase price of one or more of our products, or HBB may voluntarily do so. Electrical appliances are subject to various mandatory and voluntary standards. Any repurchases or recalls of our products could be costly to us and could damage our reputation or the value of our brands. If HBB is required to remove, or HBB voluntarily removes our products from the market, our reputation or brands could be tarnished, and HBB might have large quantities of finished products that could not be sold. Furthermore, failure to timely notify the CPSC of a potential safety hazard can result in fines being assessed against HBB. Additionally, laws regulating certain consumer products exist in some states, as well as in other countries in which HBB sells our products, and more restrictive laws and regulations may be adopted in the future. HBB’s results of operations are also susceptible to adverse publicity regarding the quality and safety of our products. In particular, product recalls may result in a decline in sales for a particular product.

HBB’s business subjects it to product liability claims, which could affect the reputation, revenue and profitability of HBB.

HBB faces exposure to product liability claims if one of our products is alleged to have caused property damage, bodily injury or other adverse effects up to a defined self-insured loss limit per claim and maintains product liability insurance for claims above this self-insured level. If a product liability claim is brought against HBB, our revenue and profitability could be affected adversely as a result of negative publicity related to the claim, costs associated with any replacement of the product or expenses related to defending these claims. This could be true even if the claims themselves are ultimately settled for immaterial amounts. In addition, HBB may not be able to maintain product liability insurance on terms acceptable to HBB in the future. If the number of product liability claims HBB experiences exceeds historical amounts, if HBB is unable to maintain product liability insurance or if HBB’s product liability claims exceed the amount of our insurance coverage, HBB’s results of operations and financial condition could be affected adversely.

Government regulations could impose costly requirements on HBB.

The SEC adopted conflict mineral rules under Section 1502 of the Dodd-Frank Act on August 22, 2012. The rules require disclosure of the use of certain minerals, commonly known as “conflict minerals,” which are mined from the DRC and adjoining countries. Since HBB’s supply chain is complex, ultimately it may not be able to designate all products as “DRC conflict free” which may adversely affect its reputation with certain customers. In such event, HBB may also face difficulties in satisfying customers who require products purchased from HBB to be “DRC conflict free”. If HBB is not able to meet such requirements, customers may choose not to purchase HBB products, which could adversely affect sales and the value of portions of HBB’s inventory.

HBB is subject in the ordinary course of its business, in the U.S. and elsewhere, to many statutes, ordinances, rules and regulations that, if violated by HBB or its affiliates, partners or vendors, could have a material adverse effect on HBB’s business. HBB is required to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery, anti-corruption and anti-kickback laws adopted in many of the countries in which HBB does business which prohibit HBB from engaging in bribery or making other prohibited payments to foreign officials for the purpose of obtaining or retaining business and also require maintenance of adequate record-keeping and internal accounting practices to accurately reflect transactions. Under the FCPA, companies operating in the U.S. may be held liable for actions taken by their strategic or local partners or representatives. If HBB does not properly implement and maintain practices and controls with respect to compliance with applicable anti-corruption, anti-bribery and anti-kickback laws, or if HBB fails to enforce those practices and controls properly, HBB may be held responsible for their actions and may become subject to regulatory sanctions, including administrative costs related to governmental and internal investigations, civil and criminal penalties, injunctions and restrictions on HBB’s business and capital raising activities, any of which could materially and adversely affect HBB’s business, results of operations and financial condition.

HBB may be subject to risks relating to increasing cash requirements of certain employee benefits plans, which may affect its financial position.

Because HBB’s defined benefit pension plans are frozen and no longer provide for the accrual of future benefits, the expenses recorded for, and cash contributions required to be made to its defined benefit pension plans are dependent on, changes in market interest rates and the value of plan assets, which, in turn, are dependent on actual investment returns. Significant changes in market interest rates, decreases in the value of plan assets or investment losses on plan assets may require HBB to increase the cash contributed to its defined benefit pension plans which may affect its financial position.

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HBB depends on third-party suppliers for all of our products, which subjects the Company to risks, including unanticipated increases in expenses, decreases in revenue and disruptions in the supply chain.

HBB is dependent on third-party suppliers for the manufacturing and distribution of our products. Our ability to select reliable suppliers that provide timely deliveries of quality products will impact our success in meeting customer demand. Any supplier inability to timely deliver products that meet desired specifications or any unanticipated changes in suppliers could be disruptive and costly. Any significant failure by HBB to obtain quality products, in sufficient quantities, on a timely basis, and at an affordable cost or any significant delays or interruptions of supply would have a material adverse effect on revenue and profitability. As certain suppliers are primarily based in China, international operations are subject to additional risks including, among others:

•	currency fluctuations;	

•	labor unrest;	

•	potential political, economic and social instability;	

•	restrictions on transfers of funds;	

•	import and export duties and quotas;	

•	changes in domestic and international customs and tariffs, including embargoes and customs restrictions;	

•	uncertainties involving the costs to transport products;	

•	long distance shipping routes dependent upon a small group of shipping and rail carriers and import facilities;	

•	unexpected changes in regulatory environments;	

•	regulatory issues involved in dealing with foreign suppliers and in exporting and importing products;	

•	protection of intellectual property;	

•	difficulty in complying with a variety of foreign laws;	

•	difficulty in obtaining distribution and administrative support;	

•	natural or human induced disasters such as earthquakes, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, power or water shortages, telecommunications failures, and medical epidemics or pandemics, including potential consequences from the coronavirus; and	

•	potentially adverse tax consequences, including significant changes in tax law.	
The foregoing factors could have a material adverse effect on our ability to maintain or increase the supply of products, which may result in material increases in expenses and decreases in revenue and profitability.

The markets for HBB's products are highly seasonal and dependent on consumer spending, which could result in significant variations in revenue and profitability.

Sales of HBB products are related to consumer spending, including general economic conditions affecting disposable consumer income such as unemployment rates, business conditions, interest rates, levels of consumer confidence, energy prices, mortgage rates, the level of consumer debt and taxation. In addition, the retail market for small electric household and specialty housewares appliances are highly seasonal in nature. Accordingly, HBB generally recognizes a substantial portion of our revenue in the second half of the year as sales increase significantly with the fall holiday-selling season. Accordingly, quarter-to-quarter comparisons of past operating results of HBB are meaningful only when comparing equivalent time periods, if at all. Any economic downturn, decrease in consumer spending or shift in consumer spending away from small electric household and specialty housewares appliances may significantly reduce revenue and profitability.

The Company is dependent on key personnel and the loss of these key personnel could significantly reduce its consolidated profitability.

The Company is highly dependent on the skills, experience and services of its and its subsidiaries’ key personnel and the loss of key personnel could have a material adverse effect on its consolidated business, operating results and financial condition. Employment and retention of qualified personnel is important to the successful conduct of Hamilton Beach Holding’s business. Therefore, the Company's success also depends upon its ability to recruit, hire, train and retain current and additional skilled

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and experienced management personnel. The Company's inability to hire and retain personnel with the requisite skills could impair its ability to manage and operate its consolidated business effectively and could significantly reduce its consolidated profitability.

The financing arrangement of HBB contains various restrictions that could limit operating flexibility.

HBB’s credit facility contains covenants and other restrictions that, among other things, require HBB to satisfy certain financial tests, maintain certain financial ratios and restrict HBB’s ability to incur additional indebtedness. The restrictions and covenants in HBB’s credit facility, and other future financing arrangements may limit HBB’s ability to respond to market conditions, provide for capital investment needs or take advantage of business opportunities by limiting the amount of additional borrowings HBB may incur.

The Company’s business could suffer if information technology systems are disrupted, cease to operate effectively or become subject to a security breach.

The Company relies heavily on information technology systems to operate websites; record and process transactions; respond to customer inquiries; manage inventory; purchase, sell and ship merchandise on a timely basis; and maintain cost-efficient operations. Given the significant number of transactions that are completed annually, it is vital to maintain constant operation of computer hardware and software systems and maintain cybersecurity. The Audit Review Committee of the Company is regularly briefed on cybersecurity matters, however despite the cybersecurity efforts, our information technology systems may be vulnerable from time to time to damage or interruption from computer viruses, power outages, third-party intrusions and other technical malfunctions. If our systems are damaged, or fail to function properly, we may have to make monetary investments to repair or replace the systems and could endure delays in operations.

In addition, we regularly evaluate information technology systems and requirements and from time to time implement modifications and/or upgrades to our information technology systems. Modifications include replacing existing systems with successor systems, making changes to existing systems and acquiring new systems with new functionality. HBB is currently engaged in a multi-year implementation of an enterprise resource planning (“ERP”) system. Such an implementation is a major undertaking from a financial, management, and personnel perspective. The implementation of the ERP system may prove to be more difficult, costly, or time consuming than expected, and there can be no assurance that this system will be beneficial to the extent anticipated. Any disruptions, delays or deficiencies in the design and implementation of our new ERP system could adversely affect our financial position, results of operations and cash flows in addition to the effectiveness of our internal controls over financial reporting.

Any material disruption or slowdown of our systems, including a disruption or slowdown caused by a security breach or our failure to successfully upgrade its systems, could cause information, including data related to customer orders, to be lost or delayed. Such a loss or delay could reduce demand and cause our sales and/or profitability to decline.

Failure to maintain data privacy could have a material adverse effect on our business, financial condition and results of operations.

The Company is subject to certain laws, rules and regulations enacted to protect businesses and personal data (“Privacy Laws”), which may include the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”), as well as industry self-regulatory codes that create new compliance obligations. The administration, enforcement and regulation of Privacy Laws are quickly evolving and subject to changes in interpretation. Future changes in Privacy Laws may require the Company to incur additional and unexpected expenses and may subject the Company to additional compliance risk. Any failure to comply with Privacy Laws could have a material adverse impact on our financial condition and results of operations.

U.S. government trade actions could have a material adverse effect on Hamilton Beach Brands Holding Company’s subsidiaries, financial position, and results of operation.

The U.S. government has taken a number of trade actions that impact or could impact our operations, including imposing tariffs on certain goods imported into the United States. In addition, several governments, including the European Union, China and India, have imposed tariffs on certain goods imported from the United States. As the majority of our products are imported into the United States from China, many of our product lines are subject to the tariffs imposed under Section 301 of US trade law that have been applied to separate lists of Chinese goods. The Section 301 tariffs on goods covered by lists 1, 2, 3 and 4a affect approximately 25% of total HBB purchases on an annualized basis. On December 13, 2019, the United States Trade Representative (USTR) announced a “Phase One” agreement with China pursuant to which the U.S. government

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agreed to suspend the 15% tariffs on List 4b products. On January 15, 2020, USTR issued a Federal Register notice reducing the rate of Section 301 tariffs on List 4a products to 7.5%, effective February 14, 2020. We are continually evaluating the impact of the current and any possible new tariffs on our supply chain, costs, sales and profitability and are considering strategies to mitigate such impact, including reviewing sourcing options, filing requests for exclusion from the tariffs for certain product lines and working with our suppliers and customers. We can provide no assurance that any strategies we implement to mitigate the impact of such tariffs or other trade actions will be successful. Given the uncertainty regarding the scope and duration of these trade actions by the U.S. government or other countries, as well as the potential for additional trade actions, the impact on our operations and results remains uncertain.

The amount and frequency of dividend payments made on Hamilton Beach Holding’s common stock could change.

The Company's Board has the power to determine the amount and frequency of the payment of dividends. Decisions regarding whether or not to pay dividends and the amount of any dividends are based on earnings, capital, and future expense requirements, financial conditions, contractual limitations and other factors our Board may consider.

Certain members of the Company's extended founding family own a substantial amount of Class A Common and Class B Common, and if they were to act in concert, could control the outcome of director elections and other stockholder votes on significant actions.

Hamilton Beach Holding has two classes of common stock: Class A Common and Class B Common. Holders of Class A Common will be entitled to cast one vote per share and, as of December 31, 2019, accounted for approximately 18.80% of the voting power of Hamilton Beach Holding. Holders of Class B Common are entitled to cast ten votes per share and, as of December 31, 2019, accounted for the remaining voting power of Hamilton Beach Holding. As of December 31, 2019, certain members of the Company's extended founding family held approximately 34.78% of Class A Common and 80.13% of Class B Common. On the basis of this common stock ownership, certain members of the Company's extended founding family could exercise 71.6% of the Company's total voting power. Although there is no voting agreement among such family members, in writing or otherwise, if they were to act in concert, they would exert significant control over the outcome of director elections and other stockholder votes on significant actions, such as certain amendments to the Company's amended and restated certificate of incorporation and sale of the Company or substantially all of its assets. Because such family members could prevent other stockholders from exercising significant influence over significant corporate actions, the Company may be a less attractive takeover target, which could adversely affect the market price of its common stock.

The Company is an “emerging growth company” and as a result of the reduced disclosure requirements applicable to emerging growth companies, the reduced disclosures may make it more difficult to compare our performance with other public companies.

We are an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, the JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither (i) an emerging growth company nor (ii) an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

We will remain an emerging growth company for up to five years, although we will lose that status sooner if our revenues exceed $1.07 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if we are deemed to be a large accelerated filer under the federal securities laws.

There are risks associated with the wind down of KC.

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On October 10, 2019, the Board approved the wind down of KC and its retail operations. At December 31, 2019, all stores were closed for business. The Company expects the wind down to continue through the first half of 2020 to facilitate the settlement of remaining liabilities. KC may incur additional costs until the wind down is complete, which may include, contract assignment and termination costs, primarily with respect to store operating leases. The final outcome is dependent upon various factors, many of which are outside of our control, including, without limitation, the actual outcomes of discussions and negotiations with landlords and the counterparties to the contracts we intend to terminate. In addition, the wind down of the KC business involves numerous risks to us, including but not limited to:

•	potential disruption of the operations of the rest of our businesses and diversion of management’s attention from such businesses and operations;	

•	exposure to unknown, contingent or other liabilities, including litigation arising in connection with the KC wind down;	

•	negative impact on our business relationships, including current relationships with our customers, suppliers, vendors, lessors, licensees and employees; and	

•	unintended negative consequences from changes to our business profile.	
If any of these or other factors impair the successful implementation of the wind down, we may not be able to realize other business opportunities as we may be required to spend additional time and incur additional expense relating to the wind down that otherwise would be used on the development and expansion of our other businesses, which could adversely impact the Company’s business, operational results, financial position and cash flows.

Item 1B. UNRESOLVED STAFF COMMENTS
    
None.

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Item 2. PROPERTIES
The following table presents the principal distribution and office facilities owned or leased:

					
 	 	Owned/	 	 	
Facility Location	 	Leased	 	Function(s) (2)	
Glen Allen, Virginia	 	Leased	 	Corporate headquarters	
Geel, Belgium	 	(1)	 	Distribution center	
Shenzhen, People's Republic of China	 	(1)	 	Distribution center	
Mexico City, Mexico	 	Leased	 	Mexico sales and administrative headquarters	
Olive Branch, Mississippi	 	Leased	 	Distribution center	
Picton, Ontario, Canada	 	Leased	 	Distribution center	
Belleville, Ontario, Canada	 	Leased	 	Distribution center	
Southern Pines, North Carolina	 	Owned	 	Service center for customer returns; catalog distribution center; parts distribution center	
Shenzhen, People's Republic of China	 	Leased	 	Administrative office	
Markham, Ontario, Canada	 	Leased	 	Canada sales and administration headquarters	
City of Sao Paulo, Sao Paulo, Brazil	 	Leased	 	Brazil sales and administrative headquarters	
Joinville, Santa Catarina, Brazil	 	(1)	 	Distribution center	
Shanghai, People's Republic of China	 	Leased	 	Sales office	
Suzhou, People's Republic of China	 	(1)	 	Distribution center	
Tultitlan, Mexico	 	(1)	 	Distribution center	

(1)	This facility is not owned or leased by HBB. This facility is managed by a third-party distribution provider.	
		
(2)	Sales offices are also leased in several cities in the U.S., Canada, China and Mexico.	

Item 3. LEGAL PROCEEDINGS
The information required by this Item 3 is set forth in Note 12 "Contingencies" included in our Financial Statements and Supplementary Data contained in Part IV of this Form 10-K/A and is hereby incorporated herein by reference to such information.
Item 4. MINE SAFETY DISCLOSURES
    
None.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Company's Class A Common is traded on the New York Stock Exchange under the ticker symbol “HBB.” Because of transfer restrictions, no trading market has developed, or is expected to develop, for the Company's Class B Common. The Class B Common is convertible into Class A Common on a one-for-one basis.
The declaration of future dividends, record dates and payout dates for such future dividends will be at the discretion of the Board and will depend on various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends, restrictions imposed by applicable law, general business conditions and other factors that the Board deems relevant.
At December 31, 2019 and 2018, there were 780 and 772, respectively, Class A Common stockholders of record and 902 and 892, respectively, Class B common stockholders of record.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In May 2018, the Company approved a stock repurchase program for the purchase of up to $25.0 million of the Company's Class A Common Stock outstanding through December 31, 2019. As of December 31, 2019, the Company repurchased 364,893 shares for an aggregate purchase price of $6.0 million. There were no stock repurchases during the three months ended December 31, 2019 and the twelve months ended December 31, 2018 and 2017.

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On November 5, 2019, the Company's Board adopted a new stock repurchase program for the purchase of up to $25.0 million of the Company's Class A Common outstanding starting January 1, 2020 and ending December 31, 2021.

Item 6. SELECTED FINANCIAL DATA

The following table sets forth the Company's selected historical financial data as of and for each of the periods indicated. Except where indicated, the results of operations, financial position, and cash flows of KC are reflected as discontinued operations for all periods reported. Certain amounts have been restated for the correction of misstatements discussed in Note 2, Restatement of Previously Issued Consolidated Financial Statements and corrected for additional identified out-of-period and uncorrected errors that were not material. This information should be read in conjunction with the “Explanatory Note” immediately preceding Item 1 of this Annual Report on Form 10-K/A, with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10- K/A. The selected consolidated financial information below as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017, are derived from our audited consolidated financial statements included in this Annual Report on Form 10-K/A. The selected financial data as of December 31, 2017, 2016 and 2015 and for the years ended December 31, 2016 and 2015 are derived from unaudited consolidated financial statements, which were prepared on the same basis as our audited consolidated financial statements and reflect the impact of adjustments to our previously filed financial information.

	
																				
 	As Restated (2)	 	As Revised (3)	
 	Year Ended December 31	
 	2019	 	2018	 	2017	 	2016	 	2015	
 	(In thousands, except per share amounts)	
Operating Statement Data:	 	 	 	 	 	 	 	 	 	
Revenue	$	611,786		 	$	630,082		 	$	612,056		 	$	601,006		 	$	616,874		
Operating profit	$	26,794		 	$	33,550		 	$	37,956		 	$	39,561		 	$	32,115		
 			 			 			 			 	 	
Income from continuing operations, net of tax	$	15,093		 	$	23,059		 	$	18,109		 	$	24,277		 	$	18,086		
Income (loss) from discontinued operations, net of tax	$	(28,600	)	 	$	(5,361	)	 	$	(2,225	)	 	$	259		 	$	545		
Net income (loss)	$	(13,507	)	 	$	17,698		 	$	15,884		 	$	24,536		 	$	18,631		
 		 		 		 		 	 	
Basic and diluted earnings (loss) per share:		 		 		 		 	 	
Continuing operations	$	1.10		 	$	1.68			$	1.32			$	1.78			$	1.32		
Discontinued operations	(2.09	)	 	(0.39	)		(0.16	)		0.01			0.04		
Basic and diluted earnings (loss) per share	$	(0.99	)	 	$	1.29			$	1.16			$	1.79			$	1.36		
 		 		 		 		 	 	
Actual shares outstanding at December 31 (1)	13,516		 	13,713		 	13,673		 	13,673		 	13,673		
Basic weighted average shares outstanding (1)	13,690		 	13,699		 	13,673		 	13,673		 	13,673		
Diluted weighted average shares outstanding (1)	13,726		 	13,731		 	13,685		 	13,673		 	13,673		

(1)	On September 29, 2017, NACCO, Hamilton Beach Holding's former parent company, spun-off the Company to NACCO stockholders. The basic and diluted earnings (loss) per share amounts for the Company for all periods prior to the spin-off have been calculated based upon the number of shares distributed in the spin-off.	

(2)	The Company restated previously disclosed consolidated financial data for fiscal years 2019, 2018 and 2017, as well as the related balance sheet dates, to correct misstatements principally related to the write-off of unrealizable assets. The restatement also includes corrections for other errors previously identified as immaterial, individually and in the aggregate, to our consolidated financial statements. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information.	

(3)	In connection with the restatement, the Company has also revised the selected financial information for the fiscal years ended December 31, 2016 and 2015, to correct for misstatements identified during the investigation. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and	

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Supplementary Data, for additional information regarding the nature of the misstatements. Revisions to the consolidated statement of operations decreased operating profit and net income by $1.6 million and decreased diluted earnings per share by $0.12 for the year ended December 31, 2016. Revisions to the consolidated statement of operations decreased operating profit and net income by $1.1 million and decreased diluted earnings per share by $0.08 for the year ended December 31, 2015.

	
																				
 	As Restated (3)	 	As Revised (4)	
 	Year Ended December 31	
 	2019	 	2018	 	2017	 	2016	 	2015	
 	(In thousands, except per share amounts and employee data)	
Balance Sheet Data at December 31:	 	 	 	 	 	 	 	 	 	
Net working capital(2)	$	106,839			$	101,898			$	91,111			$	95,088			$	116,839		
Total assets	$	288,664			$	321,419			$	325,276			$	310,141			$	310,643		
Short-term portion of revolving credit agreements	$	23,497			$	11,624			$	31,346			$	12,714			$	8,365		
Long-term portion of revolving credit agreements	$	35,000			$	35,000			$	20,000			$	26,000			$	50,000		
Stockholders' equity	$	36,267			$	56,819			$	42,027			$	62,948			$	81,970		
 										
Cash Flow Data:										
Net cash provided by operating activities from continuing operations	$	221			$	17,955			$	28,303			$	58,025			$	13,535		
Net cash used for investing activities from continuing operations	$	(4,122	)		$	(7,759	)		$	(6,177	)		$	(4,788	)		$	(4,775	)	
Net cash provided by (used for) financing activities from continuing operations	$	1,062			$	(9,255	)		$	(26,532	)		$	(61,837	)		$	(10,088	)	
 										
Other Data:										
Cash dividends paid to NACCO Industries, Inc.	$	—			$	—			$	38,000			$	42,000			$	15,000		
Cash dividends paid(1)	$	4,851			$	4,658			$	1,162			n/a			n/a		
Purchase of treasury stock	$	5,960			$	—			$	—			n/a			n/a		
Per share data:										
Cash dividends paid(1)	$	0.36			$	0.34			$	0.09			n/a			n/a		
Market value at December 31 (1)	$	19.10			$	23.46			$	25.69			n/a			n/a		
Stockholders' equity at December 31	$	2.68			$	4.14			$	3.07			$	4.60			$	6.00		
 															
Total employees at December 31 for continuing operations	680			670			650			600			600		

(1)	This information is only included for periods subsequent to the spin-off from NACCO.	

(2)	Net working capital is defined as trade receivables, net plus inventory less accounts payable.	

(3)	The Company restated previously disclosed consolidated financial data for fiscal years 2019, 2018 and 2017, as well as the related balance sheet dates, to correct misstatements principally related to the write-off of unrealizable assets. The restatement also includes corrections for other errors previously identified as immaterial, individually and in the aggregate, to our consolidated financial statements. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information.	

(4)	In connection with the restatement, the Company has also revised the selected financial information for the fiscal years ended December 31, 2016 and 2015, to correct for misstatements identified during the investigation. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information regarding the nature of the misstatements. The impact of restatement was a decrease to total assets of $1.0 million and a decrease to stockholders' equity of $4.4 million as of December 31, 2017. The impact of revisions was a decrease to total assets of $0.7 million and a decrease to stockholders' equity of	

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$2.3 million as of December 31, 2016 million and an increase to total assets of $0.5 million and a decrease to stockholders' equity of $1.1 million as of December 31, 2015.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

The following discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018, and 2017, included elsewhere in this Annual Report on Form 10-K/A. This Annual Report on Form 10-K/A restates amounts included in the 2019 Annual Report as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information. The relevant unaudited interim financial information for each of the quarters during the years ended December 31, 2019 and 2018 has also been restated. See Note 16, Quarterly Results of Operations (Unaudited), in Item 8, Financial Statements and Supplementary Data, for such restated information.

The restatement also includes corrections for other errors previously identified as immaterial, individually and in the aggregate, to our consolidated financial statements. The impact of the restatement is reflected in Management’s Discussion and Analysis of Financial Condition and Results of Operations below.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and disclosure of contingent assets and liabilities (if any). Actual results could differ from those estimates.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition: Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales taxes are excluded from revenue. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. The Company has elected to account for shipping and handling activities performed after a customer obtains control of the goods as activities to fulfill the promise to transfer the goods, and therefore these activities are not assessed as a separate service to customers. The amount of revenue recognized varies primarily with changes in returns. In addition, the Company offers price concessions to our customers for incentive offerings, special pricing agreements, price competition, promotions or other volume-based arrangements. We determine whether price concessions offered to its customers are a reduction of the transaction price and revenue or are advertising expense, depending on whether we receive a distinct good or service from our customers and, if so, whether we can reasonably estimate the fair value of that distinct good or service. We evaluated such agreements with our customers and determined they should be accounted for as variable consideration. As of December 31, 2019, we have determined that customer price concessions recorded as a reduction of revenue, certain of which were previously recorded in other current liabilities, meet all of the criteria specified in ASC 210-20, "Balance Sheet Offsetting". Accordingly, amounts related to such arrangements have been classified as a reduction of trade receivables, net as of December 31, 2019 (prior periods have not been adjusted as all the criteria in ASC 210-20 had not previously been met).

To estimate variable consideration, the Company applies both the expected value method and most likely amount method based on the form of variable consideration, according to which method would provide the better prediction. The expected value method involves a probability weighted determination of the expected amount, whereas the most likely amount method identifies the single most likely outcome in a range of possible amounts.

The Company monitors its estimates of variable consideration, which includes returns and price concessions, and periodically makes adjustments to the carrying amounts as appropriate. During 2019, there were no material adjustments to the aforesaid estimates and the Company's past results of operations have not been materially affected by a change in these estimates. Although there can be no assurances, the Company is not aware of any circumstances that would be reasonably likely to materially change these estimates in the future.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Retirement Benefit Plans: The Company maintains two defined benefit pension plans that provide benefits based on years of service and average compensation during certain periods. The Company's policy is to periodically make contributions to fund the defined benefit pension plans within the range allowed by applicable regulations. The defined benefit pension plan assets consist primarily of publicly traded stocks and government and corporate bonds. There is no guarantee the actual return on the plans’ assets will equal the expected long-term rate of return on plan assets or that the plans will not incur investment losses.
The expected long-term rate of return on defined benefit plan assets reflects management’s expectations of long-term rates of return on funds invested to provide for benefits included in the projected benefit obligations. In establishing the expected long-term rate of return assumption for plan assets, the Company considers the historical rates of return over a period of time that is consistent with the long-term nature of the underlying obligations of these plans as well as a forward-looking rate of return. The historical and forward-looking rates of return for each of the asset classes used to determine the Company's estimated rate of return assumption are based upon the rates of return earned or expected to be earned by investments in the equivalent benchmark market indices for each of the asset classes.
Expected returns for the U.S. pension plan are based on a calculated market-related value for U.S. pension plan assets. Under this methodology, asset gains and losses resulting from actual returns that differ from the Company's expected returns which are recognized ratably in the market-related value of assets over three years. Expected returns for the non-U.S. pension plan are based on fair market value for non-U.S. pension plan assets.
The basis for the selection of the discount rate for each plan is determined by matching the timing of the payment of the expected obligations under the defined benefit plans against the corresponding yield of high-quality corporate bonds of equivalent maturities.
Changes to the estimate of any of these factors could result in a material change to the Company's pension obligation causing a related increase or decrease in reported net operating results in the period of change in the estimate. Because the 2019 assumptions are used to calculate 2020 pension expense amounts, a one percentage-point change in the expected long-term rate of return on plan assets would result in a change in pension expense for 2020 of approximately $0.3 million for the plans. A one percentage-point change in the discount rate would result in a change in pension expense for 2020 by less than $0.1 million. A one percentage-point increase in the discount rate would have lowered the plans’ projected benefit obligation as of the end of 2019 by approximately $1.6 million; while a one percentage-point decrease in the discount rate would have raised the plans’ projected benefit obligation as of the end of 2019 by approximately $1.8 million.

Environmental Liabilities: HBB and environmental consultants are investigating or remediating historical environmental contamination at some current and former sites operated by HBB or by businesses it acquired. Liabilities for environmental matters are recorded in the period when it is determined to be probable and reasonably estimable that the Company will incur costs. When only a range of amounts is reasonably estimable and no amount within the range is more probable than another, the Company records the low end of the range. Environmental liabilities are recorded on an undiscounted basis and recorded in selling, general, and administrative expenses. When a recovery of a portion of an environmental liability is probable, such amounts are recognized as a reduction to selling, general, and administrative expenses and included in prepaid expenses and other current assets (current portion) and other non-current assets until settled. If the Company's environmental liability balance as of December 31, 2019 were to increase by one percent, the reserve and selling, general, and administrative expenses would increase by less than $0.1 million.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

RESULTS OF OPERATIONS

The restatement did not significantly impact the drivers of our consolidated results of operations. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information.

Discussion related to the restated quarterly information is included in Note 16, Quarterly Results of Operations (Unaudited).

The results of operations for Hamilton Beach Holding were as follows for the years ended December 31:

2019 Compared with 2018

																					
 	As Restated	
 	Year Ended December 31	
 	2019	 	% of Revenue	 	2018	 	% of Revenue	 	$ Change	 	% Change	
Revenue	$	611,786			100.0	 %		$	630,082			100.0	%		$	(18,296	)		(2.9	)%	
Cost of sales	483,234			79.0	 %		491,030			77.9	%		(7,796	)		(1.6	)%	
Gross profit	128,552			21.0	 %		139,052			22.1	%		(10,500	)		(7.6	)%	
Selling, general and administrative expenses	100,381			16.4	 %		104,121			16.5	%		(3,740	)		(3.6	)%	
Amortization of intangible assets	1,377			0.2	 %		1,381			0.2	%		(4	)		(0.3	)%	
Operating profit (loss)	26,794			4.4	 %		33,550			5.3	%		(6,756	)		(20.1	)%	
Interest expense, net	2,975			0.5	 %		2,916			0.5	%		59			2.0	 %	
Other expense (income), net	(358	)		(0.1	)%		149			—	%		(507	)		(340.3	)%	
Income (loss) from continuing operations before income taxes	24,177			4.0	 %		30,485			4.8	%		(6,308	)		(20.7	)%	
Income tax expense	9,084			1.5	 %		7,426			1.2	%		1,658			22.3	 %	
Net income from continuing operations	15,093			2.5	 %		23,059			3.7	%		(7,966	)		(34.5	)%	
Loss from discontinued operations, net of tax	(28,600	)		n/m			(5,361	)		n/m			(23,239	)		n/m		
Net (loss) income	$	(13,507	)					$	17,698						$	(31,205	)				

														
Effective income tax rate on continuing operations	37.6	%				24.4	%	 	 	 	 	 	 	
The following table identifies the components of the change in revenue for 2019 compared with 2018: 

				
 	As Restated	
 	Revenue	
2018	$	630,082		
(Decrease) increase from:		
Unit volume and product mix	(19,613	)	
Foreign currency	(1,688	)	
Average sales price	3,005		
2019	$	611,786		

Revenue - Revenue decreased $18.3 million, or 2.9%. The decline is primarily due to lower sales volume in the U.S. consumer, international consumer and global commercial markets. Globally, our ecommerce business grew 27%; however, these gains were more than offset by the adverse impact of tariffs, a loss of placements in the dollar store channel resulting from HBB's decision not to maintain very low margin business, ongoing foot traffic challenges at some retailers and other pressure points facing individual retail companies. Revenue in the global commercial market decreased due primarily to lower volume driven by the adverse impact of tariffs.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Gross profit - The decline in gross profit of $10.5 million, or 7.6%, is primarily due to lower sales volume. As a percentage of revenue, gross profit margin declined from 22.1% to 21.0% primarily due to increased inbound freight expenses, the adverse impact of tariffs and unfavorable foreign currency movements.

Selling, general and administrative expenses - The decrease in selling, general and administrative expenses was mainly attributable to a $5.2 million decline in environmental expense due to the reduction to the environmental reserve at one site of $3.2 million related to a change in the expected type and extent of investigation and remediation activities and to a $1.5 million reduction in environmental expense due to the probable recovery of investigation and remediation costs associated with the same site from a responsible party in exchange for release from all future obligations by that party. Additionally, advertising expenses declined $3.1 million and employee-related costs decreased $2.0 million due to reduced incentive compensation expense. These decreases were partially offset by a one-time charge of $3.2 million recorded in the second quarter of 2019 for a contingent loss related to patent litigation. Additionally, certain former employees of one of our Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries and in doing so, expenditures were deferred on the balance sheet of the Company's Mexican subsidiaries beyond the period for which the costs pertained. Included in selling, general and administrative expenses are charges of $6.9 million in 2019 compared with charges of $4.9 million in 2018 to write-off unrealizable assets created as a result of these unauthorized transactions. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information.

Other expense (income), net - Other income in 2019 includes currency gains of $0.4 million compared with other expense in 2018 related to currency losses of $0.5 million as the Mexican peso strengthened against the U.S. dollar.

Income tax expense - The Company recognized income tax expense of $9.1 million on income from continuing operations before income taxes of $24.2 million, an effective tax rate of 37.6% compared to income tax expense of $7.4 million, an effective tax rate of 24.4%. The increase in the effective tax rate is primarily due to $2.0 million of deferred tax expense related to a change in judgment regarding the valuation allowance recorded against certain deferred tax assets of KC.
Additionally, certain former employees of one of our Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries and in doing so expenditures were deferred on the balance sheet of the Mexican subsidiaries beyond the period for which the costs pertained. Included in selling, general and administrative expenses are non-cash charges to write-off unrealizable assets for which the corresponding tax benefit has been substantially offset by an increase in unrecognized tax benefits.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

2018 Compared with 2017

The results of operations for Hamilton Beach Holding were as follows for the years ended December 31:

																					
 	Year Ended December 31	
 	As Restated	 	 	 	As Restated	 	 	 	 	 	 	
 	2018	 	% of Revenue	 	2017	 	% of Revenue	 	$ Change	 	% Change	
Revenue	$	630,082			100.0	%		$	612,056			100.0	 %		$	18,026			2.9	 %	
Cost of sales	491,030			77.9	%		475,939			77.8	 %		15,091			3.2	 %	
Gross profit	139,052			22.1	%		136,117			22.2	 %		2,935			2.2	 %	
Selling, general and administrative expenses	104,121			16.5	%		96,780			15.8	 %		7,341			7.6	 %	
Amortization of intangible assets	1,381			0.2	%		1,381			0.2	 %		—			—	 %	
Operating profit	33,550			5.3	%		37,956			6.2	 %		(4,406	)		(11.6	)%	
Interest expense, net	2,916			0.5	%		1,572			0.3	 %		1,344			85.5	 %	
Other expense (income), net	149			—	%		(692	)		(0.1	)%		841			(121.5	)%	
Income from continuing operations before income taxes	30,485			4.8	%		37,076			6.1	 %		(6,591	)		(17.8	)%	
Income tax expense	7,426			1.2	%		18,967			3.1	 %		(11,541	)		(60.8	)%	
Net income from continuing operations	23,059			3.7	%		18,109			3.0	 %		4,950			27.3	 %	
Loss from discontinued operations, net of tax	(5,361	)		n/m			(2,225	)		n/m			(3,136	)		n/m		
Net income	$	17,698						$	15,884						$	1,814					

														
 	 	 	 	 	 	 	 	 	 	 	 	
Effective income tax rate on continuing operations	24.4	%				51.2	%	 	 	 	 	 	 	
The following table identifies the components of the change in revenue for 2018 compared with 2017: 

				
 	As Restated	
 	Revenue	
2017	$	612,056		
Increase (decrease) from:		
Unit volume and product mix	12,910		
Average sales price	6,485		
Foreign currency	(1,369	)	
2018	$	630,082		

Revenue - Revenue increased $18.0 million, or 2.9%, primarily due to higher sales volume in the international consumer retail market and increased sales of new and higher-priced products, mainly in the U.S consumer and global commercial markets. Unfavorable foreign currency movements partially offset the increase in revenue as the Mexican peso, Brazilian Real and Canadian dollar weakened against the U.S. dollar during 2018.
    
Gross profit - Gross profit increased mainly due to higher sales volume in the international consumer retail market and increased sales of new and higher-priced products, mainly in the U.S consumer and global commercial markets. As a percentage of revenue, gross profit declined from 22.2% to 22.1% primarily due to increased warehouse, transportation, and product costs.

Selling, general and administrative expenses - The increase in selling, general and administrative expenses was primarily due to increased legal and professional service fees of $2.7 million, higher employee-related expenses of $2.8

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

million and increased advertising expenses of $2.5 million, which were partially offset by the absence of $2.5 million of one-time costs incurred in the prior year to effect the spin-off from NACCO. Legal and professional service fees increased mainly due to patent litigation expenses and the increase in employee-related expenses was mainly due to merit compensation increases, as well as additional headcount to support HBB's strategic initiatives. Advertising expenses increased primarily due to increased consumer advertising campaigns to support the fall holiday-selling season. Included in selling, general and administrative expenses are charges of $4.9 million in 2018 compared with charges of $1.3 million in 2017 to write-off expenditures deferred on the balance sheet as a result of unauthorized transactions entered into by certain former employees of one of our Mexican subsidiaries. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, in Item 8, Financial Statements and Supplementary Data, for additional information.

Interest expense, net - Interest expense, net increased $1.3 million primarily due to an increase in average borrowings outstanding under HBB's revolving credit facility.

Other expense, net - Other expense, net increased $0.8 million primarily due to foreign currency gains as the Mexican peso strengthened against the U.S. dollar during the period.

Income tax expense - The Company recognized income tax expense of $7.4 million on income from continuing operations before income taxes of $30.5 million (an effective tax rate of 24.4%). The effective income tax rate on continuing operations decreased from 51.2% in 2017 primarily due to a $4.7 million provisional tax charge resulting from the reduction in the U.S. federal corporate tax rate in 2018 as a result of the Tax Cuts and Jobs Act (the "Tax Act") and the absence of non-deductible spin-off related expenses incurred in the prior year to effect the spin-off from NACCO.
LIQUIDITY AND CAPITAL RESOURCES

Hamilton Beach Brands Holding Company cash flows are provided by dividends paid or distributions made by its subsidiaries. The only material assets held by it are the investments in consolidated subsidiaries. As a result, certain statutory limitations or regulatory or financing agreements could affect the levels of distributions allowed to be made by its subsidiaries. Hamilton Beach Brands Holding Company has not guaranteed any of the obligations of its subsidiaries.

HBB's principal sources of cash to fund liquidity needs are: (i) cash generated from operations and (ii) borrowings available under the revolving credit facility, as defined below. HBB's primary use of funds consists of working capital requirements, capital expenditures, and payments of principal and interest on debt. At December 31, 2019, the Company had cash and cash equivalents for continuing operations of $2.1 million, compared to $4.4 million at December 31, 2018. 

Historically, Hamilton Beach Brands Holding Company would rely on cash flows from KC as well as HBB.  However, given that all of the KC stores have been closed and the Board approved the dissolution of the KC legal entity, KC is no longer considered a source of cash for Hamilton Beach Brands Holding Company.   As of December 31, 2019, KC reported current liabilities in excess of current assets of $24.3 million.   Neither Hamilton Beach Brands Holding Company nor HBB has guaranteed any obligations of KC. 

The following table presents selected cash flow information from continuing operations:

												
 	As Restated	
 	Year Ended December 31	
 	2019	 	2018	 	2017	
 	(In thousands)	
Net cash provided by operating activities from continuing operations	$	222			$	17,955			$	28,303		
Net cash used for investing activities from continuing operations	$	(4,122	)		$	(7,759	)		$	(6,177	)	
Net cash provided by (used for) financing activities from continuing operations	$	1,062			$	(9,255	)		$	(26,532	)	

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

December 31, 2019 Compared with December 31, 2018
    
Operating activities - Net cash provided by operating activities decreased $17.7 million in 2019 compared to the prior year primarily due to increased trade receivables, partially offset by a decline in inventory. Trade receivables increased primarily due to the timing of collections and increased fourth quarter sales in 2019 compared with prior year. The decline in inventory is primarily due to the continued efficient management of inventory levels.

Investing activities - Net cash used for investing activities from continuing operations decreased $3.6 million in 2019 primarily due to lower capital expenditures related to HBB internal-use software development costs and tooling for new products.

Financing activities - Net cash provided by financing activities from continuing operations was $1.1 million in 2019 compared to a use of cash of $9.3 million in 2018 primarily due to an increase in HBB's net borrowing activity on the revolving credit facility. The increase in borrowings was used to fund net working capital and stock repurchases.

December 31, 2018 Compared with December 31, 2017

Operating activities - Net cash provided by operating activities decreased by $10.3 million in 2018 primarily due to the net changes in operating assets and liabilities. The decrease is primarily due to the changes in working capital and the decline in the accounts payable to NACCO. The change in working capital is attributable to a decrease in accounts payable in 2018 compared with a large increase in 2017, which was partially offset by a decrease in accounts receivable in 2018 compared with a large increase in 2017 and a larger increase in inventory during 2017 compared with 2018. The change in accounts payable is mainly due to the timing of purchases and the change in accounts receivable, after consideration for the effect of the adoption of the new revenue standard in 2018, is mainly attributable to the timing of collections. The increase in inventory is primarily due to lower sales in the second half of 2018 compared with the sales forecast and higher product costs compared to 2017. The decline in the accounts payable to NACCO is primarily due to payments made to NACCO during 2018 under the tax allocation agreement.

Investing activities - Net cash used for investing activities increased primarily due to an increase in capital expenditures for internal-use software development costs and corporate office leasehold improvements.

Financing activities - Net cash used for financing activities decreased $17.3 million primarily due to the absence of the 2017 cash dividends of $38.0 million paid to NACCO, partially offset by a reduction in the revolving credit facility and dividend payments to stockholders.

Capital Resources

HBB maintains a $115.0 million senior secured floating-rate revolving credit facility (the “HBB Facility”) that expires in June 2021. The current portion of borrowings outstanding represents expected voluntary repayments to be made in the next twelve months. The obligations under the HBB Facility are secured by substantially all of HBB's assets. The approximate book value of HBB's assets held as collateral under the HBB Facility was $297.2 million as of December 31, 2019. At December 31, 2019, the borrowing base under the HBB Facility was $114.4 million and borrowings outstanding were $58.3 million. At December 31, 2019, the excess availability under the HBB Facility was $56.1 million.

The maximum availability under the HBB Facility is governed by a borrowing base derived from advance rates against eligible trade receivables, inventory and trademarks of the borrowers, as defined in the HBB Facility. Borrowings bear interest at a floating rate, which can be a base rate, LIBOR or bankers' acceptance rate, as defined in the HBB Facility, plus an applicable margin. The applicable margins, effective December 31, 2019, for base rate loans and LIBOR loans denominated in U.S. dollars were 0.0% and 1.75%, respectively. The applicable margins, effective December 31, 2019, for base rate loans and bankers' acceptance loans denominated in Canadian dollars were 0.0% and 1.75%, respectively. The HBB Facility also requires a fee of 0.25% per annum on the unused commitment. The margins and unused commitment fee under the HBB Facility are subject to quarterly adjustment based on average excess availability. The weighted average interest rate applicable to the HBB Facility for the year ended December 31, 2019 was 3.82%, including the floating rate margin and the effect of the interest rate swap agreements described below.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

To reduce the exposure to changes in the market rate of interest, HBB has entered into interest rate swap agreements for a portion of the HBB Facility. Terms of the interest rate swap agreements require HBB to receive a variable interest rate and pay a fixed interest rate. HBB has interest rate swaps with notional values totaling $35.0 million at December 31, 2019 at an average fixed interest rate of 1.5%. HBB also has delayed-start interest rate swaps with notional values totaling $10.0 million as of December 31, 2019, with fixed rates of 1.7%.

The HBB Facility includes restrictive covenants, which, among other things, limit the payment of dividends to Hamilton Beach Holding, subject to achieving availability thresholds. Under Amendment No. 6 to the HBB Facility, dividends to Hamilton Beach Holding are not to exceed $5.0 million during any calendar year to the extent that for the thirty days prior to the dividend payment date, and after giving effect to the dividend payment, HBB maintains excess availability of not less than $15.0 million. Dividends to Hamilton Beach Holding are discretionary to the extent that for the thirty days prior to the dividend payment date, and after giving effect to the dividend payment, HBB maintains excess availability of not less than $25.0 million. The HBB Facility also requires HBB to achieve a minimum fixed charge coverage ratio in certain circumstances, as defined in the HBB Facility. At December 31, 2019, HBB was in compliance with all financial covenants in the HBB Facility.

In December 2015, the Company entered into an arrangement with a financial institution to sell certain U.S. trade receivables on a non-recourse basis. The Company utilizes this arrangement as an integral part of financing working capital. 

HBB believes funds available from cash on hand, the HBB Facility and operating cash flows will provide sufficient liquidity to meet its operating needs and commitments arising during the next twelve months and until the expiration of the HBB Facility.

KC maintained a separate revolving line of credit facility (the "KC Facility") that was secured by substantially all of the assets of KC. The Company's decision to wind down KC and its retail operations constituted an event of default under the KC Facility. As a result, on October 23, 2019, KC and its lender entered into a Forbearance Agreement (the “Forbearance Agreement”). Under the terms of the Forbearance Agreement, the lender agreed to forebear from exercising its rights and remedies as a result of the events of default pending accelerated payment in full of the obligations under the KC facility on or before December 15, 2019. All obligations under the KC Facility were paid in full in accordance with the Forbearance Agreement and the KC Facility was terminated on December 3, 2019.

Contractual Obligations, Contingent Liabilities and Commitments

Following is a table which summarizes the contractual obligations of Hamilton Beach Holding as of December 31, 2019:

																												
 	Payments Due by Period	
Contractual Obligations	Total	 	2020	 	2021	 	2022	 	2023	 	2024	 	Thereafter	
HBB:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revolving credit agreements	$	58,497		 	192		 	58,305		 	$	—		 	$	—		 	$	—		 	$	—		
Variable interest payments on HBB Facility	4,140		 	2,244		 	1,896		 	—		 	—		 	—		 	—		
Purchase and other obligations	212,312		 	209,040		 	3,157		 	69		 	46		 	—		 	—		
Operating lease obligations	31,710		 	6,114		 	4,089		 	1,816		 	1,574		 	1,590		 	16,527		
KC:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchase and other obligations	12,475		 	12,475		 	—		 	—		 	—		 	—		 	—		
Operating lease obligations	26,493		 	10,942		 	5,863		 	4,027		 	2,458		 	1,534		 	1,669		
Total contractual cash obligations	$	345,627		 	$	241,007		 	$	73,310		 	$	5,912		 	$	4,078		 	$	3,124		 	$	18,196		

Not included in the table above, HBB has a long-term liability of approximately $0.4 million for unrecognized tax benefits, including interest and penalties, as of December 31, 2019. At this time, the Company is unable to make a reasonable estimate of the timing of payments due to, among other factors, the uncertainty of the timing and outcome of its audits.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

HBB’s variable interest payments are calculated based upon HBB's anticipated payment schedule and the December 31, 2019 base rate and applicable margins, as defined in the HBB Facility. A 1/8% increase in the base rate would increase HBB’s estimated total annual interest payments on the HBB Facility by approximately $0.5 million.

HBB's purchase and other obligations are primarily for accounts payable, open purchase orders and accrued payroll and incentive compensation. KC's purchase and other obligations are primarily for accounts payable and accrued employee related costs.

An event of default, as defined in the HBB Facility and in HBB's operating lease agreements, could cause an acceleration of the payment schedule. No such event of default for HBB has occurred or is anticipated to occur.

KC is in default of the lease agreements for KC stores, which could result in acceleration of the payment schedule for those store leases.

Pension funding can vary significantly each year due to plan amendments, changes in the market value of plan assets, legislation and the Company’s decisions to contribute above the minimum regulatory funding requirements. As a result, pension funding has not been included in the table above. HBB does not expect to contribute to its pension plans in 2020. Pension benefit payments are made from assets of the pension plans.

Off Balance Sheet Arrangements

The Company has not entered into any off balance sheet financing arrangements, other than operating leases, which are disclosed in the contractual obligations table above.

Accounting Standards Adopted

In March 2017, the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715)," which amends the requirements in GAAP related to the income statement presentation of the components of net periodic benefit cost for an entity's sponsored defined benefit pension and other post-retirement plans. The Company adopted this guidance on January 1, 2019. The change in presentation of the components of net periodic pension cost was applied retrospectively which resulted in $0.7 million and $0.9 million of net periodic pension income for the years end December 31, 2018, and 2017, respectively, being reclassified from selling, general and administrative expenses to other expense (income), net.

Accounting Standards Not Yet Adopted

The Company is an emerging growth company and has elected not to opt out of the extended transition period for complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public or nonpublic entities, the Company can adopt the new or revised standard at the time nonpublic entities adopt the new or revised standard.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is planning to adopt ASU 2016-02 for its year ending December 31, 2021 and is currently evaluating to what extent ASU 2016-02 will affect the Company's financial position, results of operations, cash flows and related disclosures.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)," which requires an entity to recognize credit losses as an allowance rather than as a write-down. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is planning to adopt ASU 2016-03 for its year ending December 31, 2022 and is currently evaluating to what extent ASU 2016-13 will affect the Company's financial position, results of operations, cash flows and related disclosures.

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Item 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS HAMILTON BEACH BRANDS HOLDING COMPANY	
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

FORWARD-LOOKING STATEMENTS

The statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere throughout this Annual Report on Form 10-K/A 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 Securities Exchange Act of 1934. 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 with respect to each subsidiary's operations include, without limitation: (1) changes in the sales prices, product mix or levels of consumer purchases of small electric and specialty housewares appliances, (2) changes in consumer retail and credit markets, including the increasing volume of transactions made through third-party internet sellers, (3) bankruptcy of or loss of major retail customers or suppliers, (4) changes in costs, including transportation costs, of sourced products, (5) delays in delivery of sourced products, (6) changes in or unavailability of quality or cost effective suppliers, (7) exchange rate fluctuations, changes in the import tariffs and monetary policies and other changes in the regulatory climate in the countries in which HBB buys, operates and/or sells products, (8) the impact of tariffs on customer purchasing patterns, (9) product liability, regulatory actions or other litigation, warranty claims or returns of products, (10) customer acceptance of, changes in costs of, or delays in the development of new products, (11) increased competition, including consolidation within the industry, (12) 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 HBB products, (13) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, (14) risks associated with the wind down of KC including unexpected costs, contingent liabilities and the potential disruption of our other businesses, (15) the unpredictable nature of the coronavirus and its potential impact on our business, (16) the result of shareholder or governmental actions relating to the restatement of our financial statements and accounting and legal fees that we may incur in connection with the restatement, (17) our ability to successfully remediate the material weaknesses in our internal control over financial reporting disclosed in this Form 10-K/A within the time periods and in the manner currently anticipated, additional material weaknesses or other deficiencies that may arise in the future or our ability to maintain an effective system of internal controls and (18) 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/A for the year ended December 31, 2019.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
HBB enters into certain financing arrangements that require interest payments based on floating interest rates. As such, the Company's financial results are subject to changes in the market rate of interest. There is an inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and business financing requirements. To reduce the exposure to changes in the market rate of interest, HBB has entered into interest rate swap agreements for a portion of its floating rate financing arrangements. The Company does not enter into interest rate swap agreements for trading purposes. Terms of the interest rate swap agreements require HBB to receive a variable interest rate and pay a fixed interest rate.
For purposes of risk analysis, the Company uses sensitivity analysis to measure the potential loss in fair value of financial instruments sensitive to changes in interest rates. The Company assumes that a loss in fair value is an increase to its liabilities. The fair value of the Company's interest rate swap agreements was a payable of $0.1 million at December 31, 2019. A hypothetical 10% decrease in interest rates would cause a decrease of $0.2 million in the fair value of interest rate swap agreements and the resulting fair value would be a payable of $0.3 million. Additionally, a hypothetical 10% increase in interest rates would not have a material impact to the Company's interest expense, net of $3.0 million at December 31, 2019.

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FOREIGN CURRENCY EXCHANGE RATE RISK
HBB operates internationally and enters into transactions denominated in foreign currencies, principally the Canadian dollar, the Mexican peso and, to a lesser extent, the Chinese yuan and Brazilian real. As such, HBB's financial results are subject to the variability that arises from exchange rate movements. The fluctuation in the value of the U.S. dollar against other currencies affects the reported amounts of revenue, expenses, assets and liabilities. The potential impact of currency fluctuation increases as international expansion increases.
HBB uses forward foreign currency exchange contracts to partially reduce risks related to transactions denominated in foreign currencies and not for trading purposes. These contracts generally mature within twelve months and require HBB to buy or sell the functional currency in which the applicable subsidiary operates and buy or sell U.S. dollars at rates agreed to at the inception of the contracts.
For purposes of risk analysis, the Company uses sensitivity analysis to measure the potential loss in fair value of financial instruments sensitive to changes in foreign currency exchange rates. The Company assumes that a loss in fair value is either a decrease to its assets or an increase to its liabilities. The fair value of the Company's foreign currency exchange contracts was a net payable of $0.3 million at December 31, 2019. Assuming a hypothetical 10% weakening of the U.S. dollar at December 31, 2019, the fair value of foreign currency-sensitive financial instruments, which represents forward foreign currency exchange contracts, would be decreased by $1.1 million compared with its fair value at December 31, 2019.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is set forth in the Financial Statements and Supplementary Data contained in Part IV of this Form 10-K/A and is hereby incorporated herein by reference to such information.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no disagreements with accountants on accounting and financial disclosure for the three-year period ended December 31, 2019 that would require disclosure pursuant to this Item 9.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2019. At the time of our Original Filing, our Chief Executive Officer and Chief Financial Officer had concluded that our disclosure controls and procedures were effective as of December 31, 2019. Subsequent to the evaluation made in connection with the Original Filing, our Chief Executive Officer and Chief Financial Officer have re-evaluated the effectiveness of our disclosure controls and procedures in connection with the restatement of our consolidated financial statements that resulted from wrongdoing by certain former employees of one of our Mexican subsidiaries. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2019, due to the existence of the material weaknesses in our internal control over financial reporting at our Mexican subsidiaries as described below, our disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting: Management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this evaluation, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2019 due to the material weaknesses at our Mexican subsidiaries described below.
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

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We identified deficiencies at our Mexican subsidiaries as follows:

•	Review controls performed at our Mexican subsidiaries did not operate effectively as account reconciliations and manual journal entries were not supported by accurate and complete information, which resulted in expenditures being deferred on the balance sheet beyond the period for which the costs pertained and the failure to detect unauthorized transactions deferred on the balance sheet as a result of wrongdoing by certain former employees of one of our Mexican subsidiaries; and	

•	Transaction level controls over authorization of spending with vendors, adjusting product costing and selling prices, new customer setup and accounting for price concessions with our customers at our Mexican subsidiaries were not sufficiently designed or operating effectively to provide reasonable assurance regarding the prevention and timely detection of misappropriation of assets.	

We have concluded that each of these deficiencies at our Mexican subsidiaries constitutes a material weakness in our internal control over financial reporting.
The Company's effectiveness of internal control over financial reporting as of December 31, 2019 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report, which is included in Item 15 of this Form 10-K/A and incorporated herein by reference.

Remediation of Material Weaknesses: We have evaluated the material weaknesses and have developed a plan of remediation to strengthen our internal controls over financial reporting at our Mexican subsidiaries which include the remediation efforts summarized below. Some remediation efforts have been implemented, while others are in the process of being implemented. The remediation efforts are intended to address the deficiencies and enhance our overall internal control environment:

•	Personnel Actions - We have terminated employees of one of our Mexican subsidiaries found to have engaged in misconduct, which included collusion between these employees and vendors and customers of our Mexican subsidiaries in which such employees had an interest. Additional training on our code of conduct will be implemented for all employees of our Mexican subsidiaries.	

•	Organizational Enhancements - We have implemented and are in the process of implementing organizational enhancements as follows: (i) augmenting our local accounting team for our Mexican subsidiaries with additional professionals with the relevant levels of accounting and controls knowledge, experience and training in the area of account reconciliations and manual journal entries to validate that account reconciliations and manual journal entries are supported by accurate and complete information; (ii) developing a more comprehensive review process and monitoring controls over the approval for vendor payments, changes to product cost and selling prices, approval for new customer setup including related terms and accounting for price concessions with our customers at our Mexican subsidiaries; and (iii) outsourcing functions at our Mexican subsidiaries where third-party service providers provide expertise or technical skillset, as appropriate.	

We believe the measures described above along with other elements of our remediation plan will remediate the material weaknesses identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and have begun to implement the steps described above. We will also continue to review, optimize and enhance our financial reporting controls and procedures. As we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies or we may modify certain of the remediation measures described above. We will not consider our material weaknesses remediated until the applicable remediated controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Changes in Internal Control over Financial Reporting: There have been no changes in the Company's internal control over financial reporting, that occurred during the fourth quarter of 2019, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 9B. OTHER INFORMATION
None.

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PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information with respect to Directors of the Company will be set forth in the 2020 Proxy Statement under the subheadings “Part II — Proposals To Be Voted On At The 2020 Annual Meeting — Proposal 1 — Election of Directors — Director Nominee Information,” which information is incorporated herein by reference.
Information with respect to the audit review committee and the audit review committee financial expert will be set forth in the 2020 Proxy Statement under the subheadings “Part I — Corporate Governance Information — Board Committees,” and “Part I — Corporate Governance Information — Description of Committees,” which information is incorporated herein by reference.
Information with respect to compliance with Section 16(a) of the Securities Exchange Act of 1934 by the Company's Directors, executive officers and holders of more than ten percent of the Company's equity securities will be set forth in the 2020 Proxy Statement under the subheading “Part IV — Other Important Information — Section 16(a) Beneficial Ownership Reporting Compliance,” which information is incorporated herein by reference.
Information regarding the executive officers of the Company is included in this Form 10-K/A as Item 4A of Part I as permitted by Instruction 3 to Item 401(b) of Regulation S-K.
The Company has adopted a code of business conduct and ethics applicable to all Company personnel, including the principal executive officer, principal financial officer, principal accounting officer or controller, or other persons performing similar functions. The code of business conduct and ethics, entitled the “Code of Corporate Conduct,” is posted on the Company's website at www.hamiltonbeachbrands.com/investors/corporate-governance.
Item 11. EXECUTIVE COMPENSATION
Information with respect to executive compensation will be set forth in the 2020 Proxy Statement under the headings “Part III — Executive Compensation Information” which information is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Information with respect to security ownership of certain beneficial owners and management will be set forth in the 2020 Proxy Statement under the subheading “Part IV — Other Important Information — Beneficial Ownership of Class A Common and Class B Common,” which information is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information with respect to certain relationships and related transactions will be set forth in the 2020 Proxy Statement under the subheadings “Part I — Corporate Governance Information — Review and Approval of Related Person Transactions,” which information is incorporated herein by reference.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information with respect to principal accountant fees and services will be set forth in the 2020 Proxy Statement under the heading “Part II — Proposals To Be Voted On At The 2020 Annual Meeting — Proposal 4 — Ratification of the Appointment of Ernst & Young LLP as the Company's Independent Registered Public Accounting Firm for 2020,” which information is incorporated herein by reference.

PART IV

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Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Documents that are filed as part of this report
The response to Item 15(a)(1) is set forth beginning at page F-2 of this Form 10-K/A.
(a)(2) Financial Statement Schedules
The response to Item 15(a)(2) is set forth beginning at page F-34 of this Form 10-K/A.
(a)(3) and (b) Exhibits required by Item 601 of Regulation S-K

The response to Item 15(a)(3) and (b) is set forth as follows:

(2) Plan of acquisition, reorganization, arrangement, liquidation or succession.

			
2.1	 	Separation Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company is incorporated by reference to Exhibit 10.40 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.	
(3) Articles of Incorporation and By-laws.

			
3.1	 	Amended and Restated Certificate of Incorporation of Hamilton Beach Brands Holding Company (incorporated herein by reference to Exhibit 3.1 to the Hamilton Beach Brands Holding Company Registration Statement on Form 8-A, filed by Hamilton Beach Brands Holding Company on September 22, 2017, Commission File Number 000-55845).	
3.2	 	Amended and Restated Bylaws of Hamilton Beach Brands Holding Company (incorporated herein by reference to Exhibit 3.2 to the Hamilton Beach Brands Holding Company Registration Statement on Form 8-A, filed by Hamilton Beach Brands Holding Company on September 22, 2017, Commission File Number 000-55845).	
(4) Instruments defining the rights of security holders, including indentures.

			
4.1	 	Specimen of Hamilton Beach Brands Holding Company Class A Common Stock certificate, is incorporated by reference to Exhibit 4.1 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
4.2	 	Specimen of Hamilton Beach Brands Holding Company Class B Common Stock certificate, is incorporated by reference to Exhibit 4.2 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
4.3	 	Description of Registrant's Securities.	

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(10) Material Contracts.

			
10.1	 	Transition Services Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.2 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.	
10.2	 	Tax Allocation Agreement, dated as of September 29, 2017, between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, is incorporated by reference to Exhibit 10.3 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.	
10.3	 	Stockholders' Agreement, dated as of September 29, 2017, among Hamilton Beach Brands Holding Company, the other signatories thereto and Hamilton Beach Brands Holding Company, as depository, is incorporated by reference to Exhibit 10.4 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 4, 2017.	
10.4	 	Transfer Restriction Agreement, dated as of September 29, 2017, by and among the Issuer, NACCO and the signatories thereto, is incorporated by reference to Exhibit 2 of Schedule 13D, filed on October 6, 2017.	
10.5*	 	Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Amended and Restated Effective March  1, 2015) is incorporated herein by reference to Exhibit 10.2 to NACCO Industries, Inc. Current Report on Form 8-K, filed by NACCO Industries, Inc. on May 18, 2015, Commission File Number 1-9172.	
10.6*	 	The Hamilton Beach Brands, Inc. Annual Incentive Compensation Plan (Effective January  1, 2014) (incorporated herein by reference to Exhibit 10.1 to the NACCO Industries, Inc. Current Report on Form 8-K, filed by NACCO Industries, Inc. on May 9, 2014, Commission File Number 1-9172).	
10.7*	 	The Hamilton Beach Brands, Inc. Excess Retirement Plan (As Amended and Restated Effective January  1, 2015) (incorporated herein by reference to Exhibit 10.71 to the NACCO Industries, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2014, Commission File Number 1-9172).	
10.8*	 	Amendment No.1 to The Hamilton Beach Brands, Inc. Excess Retirement Plan (As Amended and Restated Effective January  1, 2015) (incorporated herein by reference to Exhibit 10.77 to the NACCO Industries, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2015, Commission File Number 1-9172).	
10.9	 	Credit Agreement, dated as of April 29, 2010, among The Kitchen Collection, Inc., the borrowers and guarantors thereto, Wells Fargo Retail Finance, LLC and the other lenders thereto is incorporated herein by reference to Exhibit 10.27 to the NACCO Industries, Inc. Quarterly Report on Form 10-Q/A, filed by NACCO Industries, Inc. on March 20, 2013, Commission File Number 1-9172.	
10.10	 	First Amendment to Credit Agreement, dated as of August  7, 2012, among The Kitchen Collection, LLC, as successor to The Kitchen Collection, Inc., the borrowers and guarantors thereto, Wells Fargo Bank, National Association, as successor to Wells Fargo Retail Finance, LLC, and the other lenders thereto is incorporated herein by reference to Exhibit 10.28 to the NACCO Industries, Inc. Quarterly Report on Form 10-Q/A, filed by NACCO Industries, Inc. on March 20, 2013, Commission File Number 1-9172.	
10.11	 	Second Amendment to Credit Agreement, dated as of September  19, 2014, among The Kitchen Collection, LLC, as successor to The Kitchen Collection, Inc., the borrowers and guarantors thereto, Wells Fargo Bank, National Association, as successor to Wells Fargo Retail Finance, LLC, is incorporated herein by reference to Exhibit 10.1 to NACCO Industries, Inc. Current Report on Form 8-K, filed by NACCO Industries, Inc. on September 19, 2014, Commission File Number 1-9172.	
10.12	 	Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, Wells Fargo Capital Finance, LLC, as Sole Lead Arranger and Sole Lead Bookrunner, the Lenders that are Parties thereto as the Lenders, Hamilton Beach Brands, Inc. (as US Borrower), and Hamilton Beach Brands Canada, Inc. (as Canadian Borrower), as Borrowers, dated as of May 31, 2012 is incorporated herein by reference to Exhibit 10.1 to NACCO Industries, Inc. Current Report on Form 8-K, filed by NACCO Industries, Inc. on June 6, 2012, Commission File Number 1-9172.	
10.13	 	Amended and Restated Guaranty and Security Agreement, dated as of May  31, 2012, among Hamilton Beach Brands, Inc. and Hamilton Beach, Inc., as Grantors, and Wells Fargo Bank, National Association, as Administrative Agent is incorporated herein by reference to Exhibit 10.2 to the NACCO Industries, Inc. Current Report on Form 8-K, filed by NACCO Industries, Inc. on June 6, 2012, Commission File Number 1-9172.	
10.14	 	Amended and Restated Canadian Guarantee and Security Agreement, dated as of May  31, 2012, among Hamilton Beach Brands Canada, Inc., as Grantor, and Wells Fargo Bank, National Association, as Administrative Agent is incorporated herein by reference to Exhibit 10.3 to the NACCO Industries, Inc. Current Report on Form 8-K, filed by NACCO Industries, Inc. on June 6, 2012, Commission File Number 1-9172.	
10.15	 	Amendment No.1 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, the Lenders that are Parties Hereto as the Lenders, Hamilton Beach Brands, Inc. (as US Borrower), and Hamilton Beach Brands Canada, Inc. (as Canadian Borrower), as Borrowers, dated as of July 29, 2014 is incorporated herein by reference to Exhibit 10.1 to the NACCO Industries, Inc. Quarterly Report on Form 10-Q, filed by NACCO Industries, Inc. on July 30, 2014, Commission File Number 1-9172.	

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10.16	 	Amendment No.2 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, the Lenders that are Parties Hereto as the Lenders, Hamilton Beach Brands, Inc. (as US Borrower), and Hamilton Beach Brands Canada, Inc. (as Canadian Borrower), as Borrowers, dated as of November 20, 2014 is incorporated herein by reference to Exhibit 10.66 to NACCO Industries, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2014, Commission File Number 1-9172.	
10.17	 	Amendment No. 3 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, the Lenders that are Parties Hereto as the Lenders, Hamilton Beach Brands, Inc. (as Parent), and Weston Brands, LLC (as Weston) (collectively referred to as US Borrowers), and Hamilton Beach Brands Canada, Inc. (as Canadian Borrower), dated December 23, 2015 is incorporated herein by reference to Exhibit 10.72 to the NACCO Industries, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2015, Commission File 1-9172.	
10.18	 	Amendment No. 4 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, the Lenders that are Parties Hereto as the Lenders, Hamilton Beach Brands, Inc. (as Parent), and Weston Brands, LLC (as Weston) (collectively referred to as US Borrowers), and Hamilton Beach Brands Canada, Inc. (as Canadian Borrower), dated June 30, 2016 is incorporated herein by reference to Exhibit 10.1 to NACCO Industries, Inc. Quarterly Report on Form 10-Q, file by NACCO Industries, Inc. on August 2, 2016, Commission File Number I-9172.	
10.19	 	Amendment No. 5 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, the Lenders that are Parties Hereto as the Lenders, Hamilton Beach Brands, Inc. (as Parent), and Weston Brands, LLC (as Weston) (collectively referred to as US Borrowers), and Hamilton Beach Brands Canada, Inc. (as Canadian Borrower), dated September 13, 2017, is incorporated by reference to Exhibit 10.29 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.20*	 	Amendment No. 1 to Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Amended and Restated Effective March 1, 2015), is incorporated by reference to Exhibit 10.31 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.21*	 	Amendment No. 1 The Hamilton Beach Brands, Inc. Annual Incentive Compensation Plan (Effective January 1, 2014), is incorporated by reference to Exhibit 10.32 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.22*	 	Amendment No.2 to The Hamilton Beach Brands, Inc. Excess Retirement Plan (As Amended and Restated Effective January 1, 2015), is incorporated by reference to Exhibit 10.33 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.23*	 	Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan (Effective September 29, 2017), is incorporated by reference to Exhibit 10.34 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.24*	 	Hamilton Beach Brands Holding Company Non-Employee Director’s Equity Compensation Plan (Effective September 29, 2017), is incorporated by reference to Exhibit 10.35 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.25*	 	Form of Cashless Exercise Award Agreement for the Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan, is incorporated by reference to Exhibit 10.36 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.26*	 	Form of Non-Cashless Exercise Award Agreement for the Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan is incorporated by reference to Exhibit 10.37 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.27*	 	Hamilton Beach Brands Holding Company Supplemental Executive Long-Term Incentive Bonus Plan (Effective September 29, 2017), is incorporated by reference to Exhibit 10.38 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.28*	 	Form of Award Agreement for the Hamilton Beach Brands Holding Company Supplemental Executive Long-Term Incentive Bonus Plan, is incorporated by reference to Exhibit 10.39 of Amendment No. 2 of the Hamilton Beach Brands Holding Company’s S-1 Registration Statement filed on September 18, 2017.	
10.29	 	Third Amendment to Credit Agreement by and among The Kitchen Collection, LLC, as Lead Borrower, Borrowers hereto, Guarantors hereto, Lenders hereto and Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent and Swing Line Lender, dated as of October 20, 2017 is incorporated by reference to Exhibit 10.13 of the Hamilton Beach Brands Holding Company’s Form 10-Q filed on November 1, 2017.	
10.30	 	Amendment No. 6 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as Administrative Agent, the Lenders that are Parties Hereto as the Lenders, Hamilton Beach Brands, Inc., as Parent, and Weston Brands, LLC, as US Borrowers, and Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated May 14, 2018, is incorporated by reference to Exhibit 10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 10-Q, filed on August 1, 2018.	
10.31*	 	Amendment No. 1 to the Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan, dated as of September 29, 2017, is incorporated by reference to Exhibit 10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 10-Q, filed on October 30, 2018.	

33

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10.32*	 	Amendment No. 2 to the Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan, dated as of March 1, 2015, is incorporated by reference to Exhibit 10.2 of Hamilton Beach Brands Holding Company's Current Report on Form 10-Q, filed on October 30, 2018.	
10.33*	 	Amendment No. 2 to the Hamilton Beach Brands, Inc. Annual Incentive Compensation Plan, dated as of March 1, 2014, is incorporated by reference to Exhibit 10.3 of Hamilton Beach Brands Holding Company's Current Report on Form 10-Q, filed on October 30, 2018.	
10.34	 	Amendment No. 1 to the Transition Services Agreement between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, made and entered into effective as of September 29, 2018, is incorporated by reference to Exhibit 10.34 of Hamilton Beach Brands Holding Company's Current Report on Form 10-K, filed on March 6, 2019.	
10.35	 	Amendment No. 2 to the Transition Services Agreement between NACCO Industries, Inc. and Hamilton Beach Brands Holding Company, made and entered into effective as of December 18, 2018, is incorporated by reference to Exhibit 10.35 of Hamilton Beach Brands Holding Company's Current Report on Form 10-K, filed on March 6, 2019.	
10.36	 	Forbearance Agreement, dated as of October 23, 2019, by and between Wells Fargo Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender, and Lender and The Kitchen Collection, LLC is incorporated by reference to Exhibit 10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on October 25, 2019.	
10.37	 	Consulting Agreement, dated as of December 14, 2018 between Alfred M. Rankin, Jr. and Hamilton Beach Brands Holding Company, effective January 1, 2019, is incorporated by reference to Exhibit 10.37 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on December 28, 2018.	
10.38	 	Amendment to Stockholder's Agreement, dated as of February 14, 2020 and effective February 24, 2020, among the depository, Hamilton Beach Brands Holding Company, the new Participating Stockholder signatories thereto and the Participating Stockholders under the Stockholders’ Agreement, dated as of September 29, 2017.	

(21) Subsidiaries of the registrant.

			
21.1	 	 A list of the subsidiaries of the Company is attached hereto as Exhibit 21.	

(23) Consents of experts and counsel.

			
23.1	 	Consents of experts and counsel.	

(31) Rule 13a-14(a)/15d-14(a) Certifications.

			
31(i)(1) 	 	Certification of Gregory H. Trepp pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act is attached hereto as Exhibit 31(i)(1).	
31(i)(2) 	 	Certification of Michelle O. Mosier pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act is attached hereto as Exhibit 31(i)(2).	

			
(32)	 	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed and dated by Gregory H. Trepp and Michelle O. Mosier	

			
101.INS	 	XBRL Instance Document	
101.SCH	 	XBRL Taxonomy Extension Schema Document	
101.CAL	 	XBRL Taxonomy Extension Calculation Linkbase Document	
101.DEF	 	XBRL Taxonomy Extension Definition Linkbase Document	
101.LAB	 	XBRL Taxonomy Extension Label Linkbase Document	
101.PRE	 	XBRL Taxonomy Extension Presentation Linkbase Document	

			
*	 	Management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item15(b) of this Annual Report on Form 10-K/A.	

34

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	
						
 	Hamilton Beach Brands Holding Company	 	 	 	 	
 	(Registrant)	 	 	 	 	
 	 	 	 	 	 	
 	Signature	 	Title	 	Date	
By:  	/s/ Michelle O. Mosier	 	Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)/(Principal Accounting Officer)	 	July 23, 2020	
 	Michelle O. Mosier	 	 	 	 	

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Hamilton Beach Brands Holding Company hereby appoints Michelle O. Mosier as the true and lawful attorney or attorney-in-fact, with full power of substitution and revocation, for the undersigned and in the name, place and stead of the undersigned, to sign on behalf of the undersigned as director of Hamilton Beach Brands Holding Company, a Delaware corporation, an Annual Report pursuant to Section 13 of the Securities Exchange Act of 1934 on Form 10-K/A for the fiscal year ended December 31, 2019 and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorney or attorney-in-fact full power and authority to do so and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorney-in-fact substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	
					
Signature	 	Title	 	Date	
 	 	 	 	 	
/s/ Gregory H. Trepp	 	 	 	 	
Gregory H. Trepp	 	President and Chief Executive Officer (Principal Executive Officer), Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Michelle O. Mosier	 	 	 	 	
Michelle O. Mosier	 	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)/(Principal Accounting Officer)	 	July 23, 2020	
 	 	 	 	 	
/s/ Mark R. Belgya	 	 	 	 	
Mark R. Belgya	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ J.C. Butler, Jr.	 	 	 	 	
J.C. Butler, Jr.	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Paul D. Furlow	 	 	 	 	
Paul D. Furlow	 	Director	 	July 23, 2020	

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Signature	 	Title	 	Date	
 	 	 	 	 	
/s/ John P. Jumper	 	 	 	 	
John P. Jumper	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Dennis W. LaBarre	 	 	 	 	
Dennis W. LaBarre	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Michael S. Miller	 	 	 	 	
Michael S. Miller	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Alfred M. Rankin, Jr.	 	 	 	 	
Alfred M. Rankin, Jr.	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Thomas T. Rankin	 	 	 	 	
Thomas T. Rankin	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ James A. Ratner	 	 	 	 	
James A. Ratner	 	Director	 	July 23, 2020	
 	 	 	 	 	
/s/ Clara R. Williams	 	 	 	 	
Clara R. Williams	 	Director	 	July 23, 2020	

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ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 15(a)(1) AND (2)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
FINANCIAL STATEMENTS
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 2019

HAMILTON BEACH BRANDS HOLDING COMPANY
GLEN ALLEN, VIRGINIA

F-1

Table of Contents

FORM 10-K
ITEM 15(a)(1) AND (2)
HAMILTON BEACH BRANDS HOLDING COMPANY
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
The following consolidated financial statements of Hamilton Beach Brands Holding Company are incorporated by reference in Item 8:

		
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm	F-3	
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	F-4	
Consolidated Statements of Operations	F-6	
Consolidated Statements of Comprehensive Income (Loss)	F-7	
Consolidated Balance Sheets	F-8	
Consolidated Statements of Cash Flows	F-10	
Consolidated Statements of Equity	F-11	
Notes to Consolidated Financial Statements	F-12	
The following consolidated financial statement schedule of Hamilton Beach Brands Holding Company is included in Item 15(a)(2):

		
Schedule II — Valuation and Qualifying Accounts	 	
All other schedules for which provision is made in the applicable accounting regulation of the SEC are not required under the related instructions or are inapplicable, or the required information is shown in the consolidated financial statements, and therefore have been omitted.

F-2

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Hamilton Beach Brands Holding Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Hamilton Beach Brands Holding Company (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), cash flows and equity for each of the three years in the period ended December 31, 2019, and the related notes and the financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2020, except for the effect of the material weaknesses described in the second and third paragraphs as to which the date is July 23, 2020, expressed an adverse opinion thereon.

Restatement of 2019, 2018 and 2017 Financial Statements

As discussed in Note 2 to the consolidated financial statements, the 2019, 2018 and 2017 consolidated financial statements have been restated to correct certain misstatements.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2017

Cleveland, Ohio
February 26, 2020, except for the effect of the restatement disclosed in Note 2,
as to which the date is July 23, 2020

F-3

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Hamilton Beach Brands Holding Company

Opinion on Internal Control over Financial Reporting

We have audited Hamilton Beach Brands Holding Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, Hamilton Beach Brands Holding Company (the Company) has not maintained effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria.

In our report dated February 26, 2020, we expressed an unqualified opinion that the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria. Management has subsequently identified deficiencies in the design and operating effectiveness of its controls related to (1) the Company’s Mexican subsidiaries' review controls as account reconciliations and manual journal entries were not supported by accurate and complete information and failed to detect unauthorized transactions and (2) controls at the Company’s Mexican subsidiaries over authorizations for spending with vendors, adjusting product costs and selling prices, new customer setup and accounting for price concessions with customers, and has further concluded that such deficiencies represented material weaknesses as of December 31, 2019. As a result, management has revised its assessment, as presented in the accompanying Management's Report on Internal Control over Financial Reporting; to conclude that the Company’s internal control over financial reporting was not effective as of December 31, 2019. Accordingly, our present opinion on the effectiveness of December 31, 2019’s internal control over financial reporting as of December 31, 2019, as expressed herein, is different from that expressed in our previous report.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management's assessment. Management has identified material weaknesses in controls related to the Company's Mexican subsidiaries' (1) review controls over account reconciliations and manual journal entries and (2) controls at its Mexican subsidiaries over authorizations for spending with vendors, adjusting product costs and selling prices, new customer setup and accounting for price concessions with customers.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2019 consolidated financial statements of the Company. These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the 2019 consolidated financial statements, and this report does not affect our report dated February 26, 2020, except for the effect of the restatement disclosed in Note 2 as to which the date is July 23, 2020, which expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s report on internal control over financial reporting in Item 9A. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

F-4

Table of Contents

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Cleveland, Ohio
February 26, 2020, except for the effect of the material weaknesses
described in the second and third paragraphs above,
as to which the date is July 23, 2020

F-5

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HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS

												
 	As Restated	
 	Year Ended December 31	
 	2019	 	2018	 	2017	
 	(In thousands, except per share data)	
Revenue	$	611,786		 	$	630,082		 	$	612,056		
Cost of sales	483,234		 	491,030		 	475,939		
Gross profit	128,552		 	139,052		 	136,117		
Selling, general and administrative expenses	100,381		 	104,121		 	96,780		
Amortization of intangible assets	1,377		 	1,381		 	1,381		
Operating profit	26,794		 	33,550		 	37,956		
Interest expense, net	2,975		 	2,916		 	1,572		
Other expense (income), net	(358	)	 	149		 	(692	)	
Income from continuing operations before income taxes	24,177		 	30,485		 	37,076		
Income tax expense	9,084		 	7,426		 	18,967		
Net income from continuing operations	15,093		 	23,059		 	18,109		
Loss from discontinued operations, net of tax	(28,600	)	 	(5,361	)	 	(2,225	)	
Net income (loss)	$	(13,507	)	 	$	17,698		 	$	15,884		
 		 		 		
Basic and diluted earnings (loss) per share:			 			 			
Continuing operations	$	1.10			$	1.68			$	1.32		
Discontinued operations	(2.09	)		(0.39	)		(0.16	)	
Basic and diluted earnings (loss) per share	$	(0.99	)		$	1.29			$	1.16		
 									
Basic weighted average shares outstanding	13,690		 	13,699		 	13,673		
Diluted weighted average shares outstanding	13,726		 	13,731		 	13,685		
See notes to consolidated financial statements.

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HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	As Restated	
 	Year Ended December 31	
 	2019	 	2018	 	2017	
 	(In thousands)	
Net income (loss)	$	(13,507	)	 	$	17,698		 	$	15,884		
Other comprehensive income (loss), net of tax:		 		 		
Foreign currency translation adjustment	510		 	(73	)	 	648		
Loss on long-term intra-entity foreign currency transactions	(79	)	 	(1,006	)	 	—		
Cash flow hedging activity	(1,569	)	 	100		 	(749	)	
Reclassification of hedging activities into earnings	349		 	153		 	641		
Pension plan adjustment	1,410		 	(1,920	)	 	1,510		
Reclassification of pension adjustments into earnings	348		 	556		 	306		
Total other comprehensive income (loss), net of tax	$	969		 	$	(2,190	)	 	$	2,356		
Comprehensive income (loss)	$	(12,538	)	 	$	15,508		 	$	18,240		
See notes to consolidated financial statements.

F-7

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HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS

								
 	As Restated	
 	December 31	
 	2019	 	2018	
 	(In thousands)	
Assets	 	 	 	
Current assets	 	 	 	
Cash and cash equivalents	$	2,142		 	$	4,420		
Trade receivables, net	108,381		 	98,361		
Inventory	109,806		 	122,808		
Prepaid expenses and other current assets	11,345		 	15,396		
Current assets of discontinued operations	5,383		 	27,879		
Total current assets	237,057		 	268,864		
Property, plant and equipment, net	22,324		 	20,842		
Goodwill	6,253		 	6,253		
Other intangible assets, net	3,141		 	4,519		
Deferred income taxes	6,248		 	5,794		
Deferred costs	10,941		 	7,868		
Other non-current assets	2,085		 	2,672		
Non-current assets of discontinued operations	614		 	4,606		
Total assets	$	288,663		 	$	321,418		
Liabilities and stockholders' equity		 		
Current liabilities		 		
Accounts payable	$	111,348		 	$	119,271		
Accounts payable to NACCO Industries, Inc.	496		 	2,416		
Revolving credit agreements	23,497		 	11,624		
Accrued compensation	15,027		 	15,878		
Accrued product returns	8,697		 	10,698		
Other current liabilities	12,534		 	22,922		
Current liabilities of discontinued operations	29,723		 	22,820		
Total current liabilities	201,322		 	205,629		
Revolving credit agreements	35,000		 	35,000		
Other long-term liabilities	16,075		 	22,011		
Non-current liabilities of discontinued operations	—		 	1,960		
Total liabilities	252,397		 	264,600		
Stockholders’ equity		 		
Preferred stock, par value $0.01 per share	—		 	—		
Class A Common stock, par value $0.01 per share; 9,805 and 9,291 shares issued as of December 31, 2019 and 2018, respectively	98		 	93		
Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 4,076 and 4,422 shares issued as of December 31, 2019 and 2018, respectively	41		 	44		
Capital in excess of par value	54,509		 	51,714		
Treasury stock	(5,960	)	 	—		
Retained earnings	3,710		 	22,068		
Accumulated other comprehensive loss	(16,132	)	 	(17,101	)	
Total stockholders’ equity	36,266		 	56,818		
Total liabilities and stockholders' equity	$	288,663		 	$	321,418		

F-8

Table of Contents

See notes to consolidated financial statements.

F-9

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS

												
 	As Restated	
 	Year Ended December 31	
 	2019	 	2018	 	2017	
 	(In thousands)	
Operating activities	 	 	 	 	 	
Net income from continuing operations	$	15,093		 	$	23,059		 	$	18,109		
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:		 		 		
Depreciation and amortization	4,002		 	4,277		 	4,072		
Deferred income taxes	1,487		 	5,474		 	3,475		
Stock compensation expense	2,797		 	3,618		 	323		
Other	616		 	837		 	(1,167	)	
Net changes in operating assets and liabilities:		 		 		
Affiliate payable	(1,920	)	 	(5,300	)	 	866		
Trade receivables	(22,769	)	 	18,529		 	(8,128	)	
Inventory	13,674		 	(12,255	)	 	(16,566	)	
Other assets	1,127		 	(4,586	)	 	(1,295	)	
Accounts payable	(7,043	)	 	(7,719	)	 	25,009		
Other liabilities	(6,842	)	 	(7,979	)	 	3,605		
Net cash provided by operating activities from continuing operations	222		 	17,955		 	28,303		
Investing activities		 		 		
Expenditures for property, plant and equipment	(4,122	)	 	(7,759	)	 	(6,198	)	
Other	—		 	—		 	21		
Net cash used for investing activities from continuing operations	(4,122	)	 	(7,759	)	 	(6,177	)	
Financing activities		 		 		
Net additions (reductions) to revolving credit agreements	11,873		 	(4,597	)	 	12,630		
Purchase of treasury stock	(5,960	)	 	—		 	—		
Cash dividends paid	(4,851	)	 	(4,658	)	 	(1,162	)	
Cash dividends to NACCO Industries, Inc.	—		 	—		 	(38,000	)	
Net cash provided by (used for) financing activities from continuing operations	1,062		 	(9,255	)	 	(26,532	)	
Cash flows from discontinued operations			 			 			
Net cash provided by (used for) operating activities from discontinued operations	3,953		 	(5,499	)	 	5,137		
Net cash provided by (used for) investing activities from discontinued operations	585		 	(305	)	 	(1,176	)	
Net cash used for financing activities from discontinued operations	(103	)	 	—		 	(70	)	
Cash provided by (used for) discontinued operations	4,435		 	(5,804	)	 	3,891		
Effect of exchange rate changes on cash	(785	)	 	309		 	81		
Cash and Cash Equivalents		 		 		
(Decrease) increase for the year from continuing operations	(3,623	)	 	1,250		 	(4,325	)	
Increase (decrease) for the year from discontinued operations	4,435		 	(5,804	)	 	3,891		
Balance at the beginning of the year	6,352		 	10,906		 	11,340		
Balance at the end of the year	$	7,164		 	$	6,352		 	$	10,906		
See notes to consolidated financial statements.

F-10

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF EQUITY

																						
 	Class A Common Stock	Class B Common Stock	Capital in Excess of Par Value (1)	Treasury Stock	Retained Earnings (1)	Accumulated Other Comprehensive Income (Loss)(1)	Total Stockholders' Equity (1)	
 	(In thousands, except per share data)	
Balance, January 1, 2017 (As previously reported)	$	—		$	—		$	75,031		$	—		$	6,738		$	(16,501	)	$	65,268		
Cumulative restatement adjustments	$	—		$	—		$	—		$	—		$	(2,722	)	$	402		$	(2,320	)	
Balance as Restated, January 1, 2017	$	—		$	—		$	75,031		$	—		$	4,016		$	(16,099	)	$	62,948		
Net income	—		—		—		—		15,884		—		15,884		
Issuance of common stock, net of conversions	88		48		(136	)	—		—		—		—		
Cash dividends to NACCO Industries, Inc.	—		—		(27,122	)	—		(10,878	)	—		(38,000	)	
Cash dividends, $0.085 per share	—		—		—		—		(1,162	)	—		(1,162	)	
Other comprehensive income	—		—		—		—		—		1,409		1,409		
Reclassification adjustment to net income	—		—		—		—		—		947		947		
Balance as Restated, December 31, 2017	$	88		$	48		$	47,773		$	—		$	7,860		$	(13,743	)	$	42,026		
Net income	—		—		—		—		17,698		—		17,698		
Issuance of common stock, net of conversions	5		(4	)	323		—		—		—		324		
Stock compensation expense	—		—		3,618		—		—		—		3,618		
Cash dividends, $0.34 per share	—		—		—		—		(4,658	)	—		(4,658	)	
Reclassification due to adoption of ASU 2018-02	—		—		—		—		1,168		(1,168	)	—		
Other comprehensive loss	—		—		—		—		—		(2,899	)	(2,899	)	
Reclassification adjustment to net income	—		—		—		—		—		709		709		
Balance as Restated, December 31, 2018	$	93		$	44		$	51,714		$	—		$	22,068		$	(17,101	)	$	56,818		
Net loss	—		—		—		—		(13,507	)	—		(13,507	)	
Issuance of common stock, net of conversions	5		(3	)	(2	)	—		—		—		—		
Purchase of treasury stock	—		—		—		(5,960	)	—		—		(5,960	)	
Stock compensation expense	—		—		2,797		—		—		—		2,797		
Cash dividends, $0.355 per share	—		—		—		—		(4,851	)	—		(4,851	)	
Other comprehensive income	—		—		—		—		—		272		272		
Reclassification adjustment to net income (loss)	—		—		—		—		—		697		697		
Balance as Restated, December 31, 2019	$	98		$	41		$	54,509		$	(5,960	)	$	3,710		$	(16,132	)	$	36,266		
See notes to consolidated financial statements.
(1) As Restated

F-11

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Hamilton Beach Brands Holding Company is an operating holding company and operates through its two wholly-owned subsidiaries Hamilton Beach Brands, Inc. (“HBB”) and The Kitchen Collection, LLC (“KC”) (collectively “Hamilton Beach Holding” or the “Company”). On October 10, 2019, the Company’s board of directors (the “Board”) approved the wind down of KC and its retail operations. By December 31, 2019, all KC stores were closed and the reportable segment qualifies to be reported as discontinued operations. On January 21, 2020, the Board approved the dissolution of the KC legal entity and a Certificate of Dissolution of Ohio Limited Liability Company was filed with the Ohio Secretary of State. See Note 3 for further information on discontinued operations.

The only material assets held by Hamilton Beach Brands Holding Company are its investments in its consolidated subsidiaries. Substantially all of its cash flows are provided by dividends paid or distributions made by its subsidiaries. Hamilton Beach Brands Holding Company has not guaranteed any obligations of its subsidiaries.

HBB is a leading designer, marketer, and distributor of branded, small electric household and specialty housewares appliances, as well as commercial products for restaurants, bars, and hotels. HBB operates in the consumer, commercial and specialty small appliance markets.

On September 29, 2017, NACCO Industries, Inc. ("NACCO"), Hamilton Beach Holding's former parent company, spun-off the Company to NACCO stockholders. In the spin-off, NACCO stockholders, in addition to retaining their shares of NACCO common stock, received one share of Hamilton Beach Brands Holding Company Class A common stock ("Class A Common") and one share of Hamilton Beach Brands Holding Company Class B common stock ("Class B Common") for each share of NACCO Class A or Class B common stock. In accordance with applicable authoritative accounting guidance, the Company accounted for the spin-off from NACCO based on the historical carrying value of assets and liabilities. As a result of the distribution of one share of Class A Common and one share of Class B Common for each share of NACCO Class A or NACCO Class B common stock, the earnings per share amounts for the Company for periods prior to the spin-off have been calculated based upon the number of shares distributed in the spin-off. NACCO did not receive any proceeds from the spin-off.

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements include the financial statements of the Company and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Intercompany balances and transactions have been eliminated.

Prior period non-trade customer receivable amounts of $9.5 million have been reclassified from trade receivables, net to prepaid expenses and other current assets to conform to the current period presentation.

Segment Information

As of December 31, 2019, HBB is the Company’s single reportable operating segment. This is supported by the operational structure of HBB which is designed and managed to share resources across the entire suite of products offered by the business. Such resources include research and development, product design, marketing, operations, and administrative functions. The Company's chief operating decision maker does not regularly review financial information for individual product categories, sales channels, or geographic regions that would allow decisions to be made about allocation of resources or performance. Since the Company operates in one reportable segment, all required financial segment information can be found in the consolidated financial statements.

F-12

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Discontinued Operations

A component of an entity that is disposed of by sale or abandonment is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity's operations and financial results. The results of discontinued operations are aggregated and presented separately in the Consolidated Statement of Operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheet, including the comparative prior year period. KC’s cash flows are reflected as cash flows from discontinued operations within the Company’s Consolidated Statements of Cash Flows for each period presented.

Amounts presented in discontinued operations have been derived from our consolidated financial statements and accounting records using the historical basis of assets, liabilities, and historical results of KC. The discontinued operations exclude general corporate allocations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and disclosure of contingent assets and liabilities (if any). Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and highly liquid investments with original maturities of three months or less.

Trade Receivables

Allowances for doubtful accounts are maintained against trade receivables for estimated losses resulting from the inability of customers to make required payments. These allowances are based on both recent trends of certain customers estimated to be a greater credit risk as well as general trends of the entire customer pool. Accounts are written off against the allowance when it becomes evident collection will not occur.
HBB maintains significant trade receivables balances with several large retail customers. At December 31, 2019 and 2018, receivables from HBB’s five largest customers represented 69% and 57%, respectively, of HBB's net trade receivables. HBB’s significant credit concentration is uncollateralized; however, historically, minimal credit losses have been incurred.

Transfer of Financial Assets

HBB has entered into an arrangement with a financial institution to sell certain U.S. trade receivables on a non-recourse basis. HBB utilizes this arrangement as an integral part of financing working capital.  Under the terms of the agreement, HBB receives cash proceeds and retains no rights or interest and has no obligations with respect to the sold receivables.  These transactions are accounted for as sold receivables which result in a reduction in trade receivables because the agreement transfers effective control over and risk related to the receivables to the buyer.  Under this arrangement, HBB derecognized $162.7 million, $165.4 million, and $164.0 million of trade receivables during 2019, 2018 and 2017, respectively.  The losses incurred on sold receivables in the consolidated results of operations for the years ended December 31, 2019, 2018, and 2017 were not material. The Company does not carry any servicing assets or liabilities. Cash proceeds from this arrangement are reflected as operating activities.

Inventory

Inventory is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. Adjustments to the carrying value are recorded for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions.

F-13

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation, amortization and accumulated impairment losses. Depreciation and amortization are recorded generally using the straight-line method over the estimated useful lives of the assets. Estimated lives for buildings are up to 40 years, and for machinery, equipment and furniture and fixtures range from three to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life or the term of the lease. The units-of-production method is used to amortize certain tooling for sourced products. Costs incurred to develop software for internal use are capitalized and amortized over the estimated useful life of the software. Gains or losses from the sale of assets are included in selling, general and administrative expenses. Repairs and maintenance are charged to expense as incurred. Interest is capitalized for qualifying long-term capital asset projects as a part of the historical cost of acquiring the asset.

The Company evaluates long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. Fair value is estimated at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of all acquisitions over the estimated fair value of the net assets acquired. Goodwill is not amortized but evaluated at least annually for impairment. The Company conducts its annual test for impairment as of October 1 of each year and it may be conducted more frequently if changes in circumstances or the occurrence of events indicates that a potential impairment exists.  Using a qualitative assessment in the current year, the Company determined that it was not more-likely-than-not that the goodwill was impaired and a quantitative test for impairment was not required.

Intangible assets with finite lives are amortized over their estimated useful lives, which represent the period over which the asset is expected to contribute directly or indirectly to future cash flows. Intangible assets with finite lives are reviewed for impairment whenever events and circumstances indicate the carrying value of such assets may not be recoverable and exceed their fair value. If an impairment loss exists, the carrying amount of the intangible asset is adjusted to a new cost basis. The new cost basis is amortized over the remaining useful life of the asset.

No impairment has been recognized for identifiable intangible assets or goodwill for any period presented.

Environmental Liabilities

HBB and environmental consultants are investigating or remediating historical environmental contamination at some current and former sites operated by HBB or by businesses it acquired. Liabilities for environmental matters are recorded in the period when it is determined to be probable and reasonably estimable that the Company will incur costs. When only a range of amounts is reasonably estimable and no amount within the range is more probable than another, the Company records the low end of the range. Environmental liabilities are recorded on an undiscounted basis and recorded in selling, general, and administrative expenses. When recovery of a portion of an environmental liability is probable, such amounts are recognized as a reduction to selling, general, and administrative expenses and included in prepaid expenses and other current assets (current portion) and other non-current assets until settled.

F-14

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales taxes are excluded from revenue. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promised good or service that is distinct. The Company has elected to account for shipping and handling activities performed after a customer obtains control of the goods as activities to fulfill the promise to transfer the goods, and therefore these activities are not assessed as a separate service to customers. The amount of revenue recognized varies primarily with changes in returns. In addition, the Company offers price concessions to our customers for incentive offerings, special pricing agreements, price competition, promotions or other volume-based arrangements. We determine whether price concessions offered to its customers are a reduction of the transaction price and revenue or are advertising expense, depending on whether we receive a distinct good or service from our customers and, if so, whether we can reasonably estimate the fair value of that distinct good or service. We evaluated such agreements with our customers and determined they should be accounted for as variable consideration. As of December 31, 2019, we have determined that customer price concessions recorded as a reduction of revenue, certain of which were previously recorded in other current liabilities, meet all of the criteria specified in ASC 210-20, "Balance Sheet Offsetting". Accordingly, amounts related to such arrangements have been classified as a reduction of trade receivables, net as of December 31, 2019 (prior periods have not been adjusted as all the criteria in ASC 210-20 had not previously been met).

To estimate variable consideration, the Company applies both the expected value method and most likely amount method based on the form of variable consideration, according to which method would provide the better prediction. The expected value method involves a probability weighted determination of the expected amount, whereas the most likely amount method identifies the single most likely outcome in a range of possible amounts.

Product Development Costs

Expenses associated with the development of new products and changes to existing products are charged to expense as incurred. These costs, included in selling, general and administrative expenses, amounted to $12.1 million, $11.0 million, and $10.4 million in 2019, 2018, and 2017, respectively.

Foreign Currency

Assets and liabilities of foreign operations are translated into U.S. dollars at the fiscal year-end exchange rate. Revenue and expenses of all foreign operations are translated using average monthly exchange rates prevailing during the year. The related translation adjustments, including translation on long-term intra-entity foreign currency transactions, are recorded as a separate component of stockholders’ equity.

Financial Instruments

Financial instruments held by the Company include cash and cash equivalents, trade receivables, accounts payable, revolving credit agreements, interest rate swap agreements and forward foreign currency exchange contracts. The Company does not hold or issue financial instruments or derivative financial instruments for trading purposes. Interest rate swap agreements and forward foreign currency exchange contracts held by the Company have been designated as hedges of forecasted cash flows. The Company holds these derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any one institution. The Company does not currently hold any nonderivative instruments designated as hedges or any derivatives designated as fair value hedges.

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Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The Company uses forward foreign currency exchange contracts to partially reduce risks related to transactions denominated in foreign currencies. The Company offsets fair value amounts related to foreign currency exchange contracts executed with the same counterparty. These contracts hedge firm commitments and forecasted transactions relating to cash flows associated with sales and purchases denominated in currencies other than the subsidiaries’ functional currencies. Changes in the fair value of forward foreign currency exchange contracts that are effective as hedges are recorded in accumulated other comprehensive income (loss) (“AOCI”). Deferred gains or losses are reclassified from AOCI to the Consolidated Statements of Operations in the same period as the gains or losses from the underlying transactions are recorded and are generally recognized in cost of sales. The ineffective portion of derivatives that are classified as hedges is immediately recognized in earnings and generally recognized in cost of sales.

The Company uses interest rate swap agreements to partially reduce risks related to floating rate financing agreements that are subject to changes in the market rate of interest. Terms of the interest rate swap agreements require the Company to receive a variable interest rate and pay a fixed interest rate. The Company’s interest rate swap agreements and its variable rate financings are predominately based upon LIBOR (London Interbank Offered Rate). Changes in the fair value of interest rate swap agreements that are effective as hedges are recorded in AOCI. Deferred gains or losses are reclassified from AOCI to the Consolidated Statements of Operations in the same period as the gains or losses from the underlying transactions are recorded and are generally recognized in interest expense, net. The ineffective portion of derivatives that are classified as hedges is immediately recognized in earnings and included in interest expense, net. The Company periodically enters into foreign currency exchange contracts that do not meet the criteria for hedge accounting. These derivatives are used to reduce the Company’s exposure to foreign currency risk related to forecasted purchase or sales transactions or forecasted intercompany cash payments or settlements. Gains and losses on these derivatives are included in other expense, net.

Cash flows from hedging activities are reported in the Consolidated Statements of Cash Flows in the same classification as the hedged item, generally as a component of cash flows from operations.

Fair Value Measurements

The Company defines the fair value measurement of its financial assets and liabilities as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value.

Described below are the three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
Level 3 - Unobservable inputs are used when little or no market data is available.

The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement.

Stock Compensation

Pursuant to the Executive Long-Term Equity Incentive Plan (the "Executive Plan") established in September 2017, the Company grants stock of Class A Common, subject to transfer restrictions, as a means of retaining and rewarding selected employees for long-term performance. Stock awarded under the Executive Plan are fully vested and entitle the stockholder to all rights of common stock ownership except that shares may not be assigned, pledged or otherwise transferred during the restriction period. In general, the restriction period ends after three, five or ten years from the award date or at the earliest of (i) three years after the participant's retirement date, or (ii) the participant's death or permanent disability. The Company issued 118,688 and 5,512 shares of stock of Class A Common in the years ended December 31, 2019 and 2018, respectively. No stock was issued in the year ended December 31, 2017 under the Executive Plan. Stock compensation expense related to the Executive Plan was $1.6 million and $2.7 million for the years ended December 31, 2019 and 2018, respectively, and was based on the fair value of Class A Common on the grant date.

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Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Treasury Stock

The Company records the aggregate purchase price of treasury stock at cost and includes treasury stock as a reduction to stockholders' equity.

Income Taxes

Tax law requires certain items to be included in the tax return at different times than the items are reflected in the financial statements. Some of these differences are permanent, such as expenses that are not deductible for tax purposes, and some differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities using currently enacted tax rates. The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial statements or tax returns. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. Management is required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets and assess deferred tax liabilities based on enacted law and tax rates for the appropriate tax jurisdictions to determine the amount of such deferred tax assets and liabilities. Changes in the calculated deferred tax assets and liabilities may occur in certain circumstances, including statutory income tax rate changes, statutory tax law changes, or changes in the Company's structure or tax status.

The Company's tax assets, liabilities, and tax expense are supported by historical earnings and losses and the Company's best estimates and assumptions of future earnings. The Company assesses whether a valuation allowance should be established against the Company's deferred tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. This assessment considers, among other matters, scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses. When the Company determines, based on all available evidence, that it is more likely than not that deferred tax assets will not be realized, a valuation allowance is established.

Accounting Standards Adopted

In March 2017, the FASB issued ASU 2017-07, "Compensation - Retirement Benefits (Topic 715)," which amends the requirements in GAAP related to the income statement presentation of the components of net periodic benefit cost for an entity's sponsored defined benefit pension and other post-retirement plans. The Company adopted this guidance on January 1, 2019. The change in presentation of the components of net periodic pension cost was applied retrospectively which resulted in $0.7 million and $0.9 million of net periodic pension income for the years end December 31, 2018, and 2017, respectively, being reclassified from selling, general and administrative expenses to other expense (income), net.

Accounting Standards Not Yet Adopted

The Company is an emerging growth company and has elected not to opt out of the extended transition period for complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public or nonpublic entities, the Company can adopt the new or revised standard at the time nonpublic entities adopt the new or revised standard.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is planning to adopt ASU 2016-02 for its year ending December 31, 2021 and is currently evaluating to what extent ASU 2016-02 will affect the Company's financial position, results of operations, cash flows and related disclosures.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)," which requires an entity to recognize credit losses as an allowance rather than as a write-down. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is planning to adopt ASU 2016-03 for its year ending December 31, 2022 and is currently evaluating to what extent ASU 2016-13 will affect the Company's financial position, results of operations, cash flows and related disclosures.

NOTE 2 - Restatement of Previously Issued Consolidated Financial Statements

Restatement
During the quarter ended March 31, 2020, the Company discovered certain accounting irregularities at its Mexican subsidiaries. The Company’s Audit Review Committee commenced an internal investigation, with the assistance of outside counsel and other third party experts. As a result of this investigation, the Company, along with the Audit Review Committee and its third party experts, concluded that certain former employees of one of the Company’s Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries that resulted in expenditures being deferred on the balance sheet beyond the period for which the costs pertained. As a result, the Company recorded a non-cash write-off for certain amounts included in the Company’s historical consolidated financial statements in trade receivables and prepaid expenses and other current assets, among other corrections, related to these transactions, and restated its consolidated financial statements as of and for the years ended December 31, 2019, 2018, and 2017 and each of the quarters during the years ended December 31, 2019 and 2018. During the course of the investigation, certain expenses at the Company's Mexican subsidiaries were found to be incorrectly classified within the consolidated statement of operations and have also been corrected in the restatement. These misstatements are described in restatement reference (a) through (d) below. The restated interim financial information for the relevant unaudited interim financial information for the quarterly periods of 2019 and 2018, is included in Note 16, Quarterly Results of Operations (Unaudited).
The restatement also includes corrections for other errors identified as immaterial, individually and in the aggregate, to our consolidated financial statements.

Description of Misstatements

(a) Write-off of Assets: Certain former employees of one of the Company's Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries and vendors in which the employees had an interest. In doing so, expenditures were deferred on the balance sheet beyond the period for which the costs pertained. The amounts were recorded as trade receivables, prepaid expenses and other current assets, and reductions in accrued liabilities. The amounts have been written off to selling, general and administrative expenses. Where these write-offs caused the balance in prepaid expenses and other current assets to become a liability, the balance has been reclassified from prepaid expenses and other assets to other current liabilities.

(b) Reversal of Revenue: Certain former employees of one of our Mexican subsidiaries engaged in sales activities to customers in which the employees had an interest. The Company concluded that these unauthorized transactions did not meet the criteria for revenue recognition at the time of sale and the revenue has been reversed.

(c) Correction of misclassification of Selling and Marketing Expenses: Certain former employees of one of our Mexican subsidiaries engaged a third-party, in which the employees had an interest, to perform selling and marketing activities on behalf of the Mexican subsidiaries. Amounts paid for the selling and marketing activities had previously been treated as variable consideration and reflected as a reduction to revenue; however, the amounts should be reflected as selling, general and administrative expenses.

(d) Correction for the timing of recognition of customer price concessions: Customer price concessions at our Mexican subsidiaries were not accrued timely in order to obscure the increased expenses due to unauthorized transactions as described above.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

    
(e) Tax adjustments for corrections: The tax impacts of the corrections have been recorded.

(f) Correction of other immaterial errors

Description of Restatement Tables

The following tables present the impact of the restatement on our previously reported consolidated statements of operations, statements of comprehensive income (loss), balance sheets, statements of equity, and statements of cash flows for the years ended December 31, 2019 and December 31, 2018 and the impact of the restatement on our previously reported consolidated statements of operations, statements of comprehensive income (loss), statements of equity, and statements of cash flows for the year ended December 31, 2017. The values as previously reported were derived from our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed on February 26, 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF OPERATIONS

														
 	Year Ended December 31, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	
 	(In thousands, except per share data)	
Revenue	$	612,843		 	$	(1,057	)	 	a,b,c,d,f	 	$	611,786		
Cost of sales	483,298		 	(64	)	 	f	 	483,234		
Gross profit	129,545		 	(993	)	 		 	128,552		
Selling, general and administrative expenses	91,302		 	9,079		 	a,c,f	 	100,381		
Amortization of intangible assets	1,377		 	—		 		 	1,377		
Operating profit	36,866		 	(10,072	)	 		 	26,794		
Interest expense, net	2,975		 	—		 		 	2,975		
Other expense (income), net	(502	)	 	144		 	f	 	(358	)	
Income from continuing operations before income taxes	34,393		 	(10,216	)	 		 	24,177		
Income tax expense	9,315		 	(231	)	 	e	 	9,084		
Net income from continuing operations	25,078		 	(9,985	)	 		 	15,093		
Loss from discontinued operations, net of tax	(28,600	)	 	—		 		 	(28,600	)	
Net income (loss)	$	(3,522	)	 	$	(9,985	)	 		 	$	(13,507	)	
 		 		 		 		
Basic and diluted earnings (loss) per share:			 			 		 			
Continuing operations	$	1.83		 	$	(0.73	)	 		 	$	1.10		
Discontinued operations	(2.09	)	 	—		 		 	(2.09	)	
Basic and diluted earnings (loss) per share	$	(0.26	)	 	$	(0.73	)	 		 	$	(0.99	)	
 			 			 		 			
Basic weighted average shares outstanding	13,690		 			 		 	13,690		
Diluted weighted average shares outstanding	13,726		 			 		 	13,726		
(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to revenue of $0.4 million and an increase to selling, general and administrative ("SG&A") expense of $6.9 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to revenue of $1.1 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $1.6 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in a decrease to revenue of $1.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to income tax expense of $0.2 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.1 million, a decrease to cost of sales of $0.1 million, an increase to SG&A expense of $0.6 million, and an increase in other expense of $0.1 million

F-20

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF OPERATIONS

														
 	Year Ended December 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	
Revenue	$	629,710		 	$	372		 	c,f	 	$	630,082		
Cost of sales	492,195		 	(1,165	)	 	f	 	491,030		
Gross profit	137,515		 	1,537		 	 	 	139,052		
Selling, general and administrative expenses	97,964		 	6,157		 	a,c,f	 	104,121		
Amortization of intangible assets	1,381		 	—		 	 	 	1,381		
Operating profit	38,170		 	(4,620	)	 	 	 	33,550		
Interest expense, net	2,916		 	—		 	 	 	2,916		
Other expense (income), net	293		 	(144	)	 	f	 	149		
Income from continuing operations before income taxes	34,961		 	(4,476	)	 	 	 	30,485		
Income tax expense	7,816		 	(390	)	 	e	 	7,426		
Net income from continuing operations	27,145		 	(4,086	)	 	 	 	23,059		
Loss from discontinued operations, net of tax	(5,361	)	 	—		 	 	 	(5,361	)	
Net income (loss)	$	21,784		 	$	(4,086	)	 	 	 	$	17,698		
 		 			 	 	 			
Basic and diluted earnings (loss) per share:			 				 	 	 			
Continuing operations	$	1.98		 	$	(0.30	)	 	 	 	$	1.68		
Discontinued operations	(0.39	)	 	—		 	 	 	(0.39	)	
Basic and diluted earnings (loss) per share	$	1.59		 	$	(0.30	)	 	 	 	$	1.29		
 			 				 	 	 			
Basic weighted average shares outstanding	13,699		 			 	 	 	13,699		
Diluted weighted average shares outstanding	13,731		 			 	 	 	13,731		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $4.9 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $1.5 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to income tax expense of $0.4 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to revenue of $1.1 million, a decrease to cost of sales of $1.2 million, a decrease to SG&A expense of $0.2 million, and a decrease in other expense of $0.1 million

F-21

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF OPERATIONS

														
 	Year Ended December 31, 2017	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	
Revenue	$	612,229		 	$	(173	)	 	c,d,f	 	$	612,056		
Cost of sales	477,220		 	(1,281	)	 	f	 	475,939		
Gross profit	135,009		 	1,108		 	 	 	136,117		
Selling, general and administrative expenses	93,700		 	3,080		 	a,c,f	 	96,780		
Amortization of intangible assets	1,381		 	—		 	 	 	1,381		
Operating profit	39,928		 	(1,972	)	 	 	 	37,956		
Interest expense, net	1,572		 	—		 	 	 	1,572		
Other expense (income), net	(692	)	 	—		 	 	 	(692	)	
Income from continuing operations before income taxes	39,048		 	(1,972	)	 	 	 	37,076		
Income tax expense	18,918		 	49		 	e	 	18,967		
Net income from continuing operations	20,130		 	(2,021	)	 	 	 	18,109		
Loss from discontinued operations, net of tax	(2,225	)	 	—		 	 	 	(2,225	)	
Net income (loss)	$	17,905		 	$	(2,021	)	 	 	 	$	15,884		
 		 			 	 	 			
Basic and diluted earnings (loss) per share:			 				 	 	 			
Continuing operations	$	1.47		 	$	(0.15	)	 	 	 	$	1.32		
Discontinued operations	(0.16	)	 	—		 	 	 	(0.16	)	
Basic and diluted earnings (loss) per share	$	1.31		 	$	(0.15	)	 	 	 	$	1.16		
 			 				 	 	 			
Basic weighted average shares outstanding	13,673		 			 	 	 	13,673		
Diluted weighted average shares outstanding	13,685		 			 	 	 	13,685		
(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $1.3 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $1.6 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in a decrease to revenue of $0.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to revenue of $1.5 million, a decrease to cost of sales of $1.3 million, and an increase to SG&A expense of $0.2 million

F-22

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	Year Ended December 31, 2019	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(3,522	)	 	$	(9,985	)	 	$	(13,507	)	
Other comprehensive income (loss), net of tax:			 	—		 			
Foreign currency translation adjustment	1,101		 	(591	)	 	510		
(Loss) gain on long-term intra-entity foreign currency transactions	(79	)	 	—		 	(79	)	
Cash flow hedging activity	(1,713	)	 	144		 	(1,569	)	
Reclassification of hedging activities into earnings	349		 	—		 	349		
Pension plan adjustment	1,410		 	—		 	1,410		
Reclassification of pension adjustments into earnings	254		 	94		 	348		
Total other comprehensive income (loss), net of tax	1,322		 	(353	)	 	969		
Comprehensive income (loss)	$	(2,200	)	 	$	(10,338	)	 	$	(12,538	)	
See description of the net income (loss) impacts in the consolidated statement of operations for the year ended December 31, 2019 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.
The increases to cash flow hedging and the reclassification of pension adjustments are from the correction of other immaterial errors.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	Year Ended December 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
Net income (loss)	$	21,784		 	$	(4,086	)	 	$	17,698		
Other comprehensive income (loss), net of tax:			 	—		 			
Foreign currency translation adjustment	(159	)	 	86		 	(73	)	
(Loss) gain on long-term intra-entity foreign currency transactions	(1,006	)	 	—		 	(1,006	)	
Cash flow hedging activity	244		 	(144	)	 	100		
Reclassification of hedging activities into earnings	153		 	—		 	153		
Pension plan adjustment	(1,920	)	 	—		 	(1,920	)	
Reclassification of pension adjustments into earnings	650		 	(94	)	 	556		
Total other comprehensive loss, net of tax	(2,038	)	 	(152	)	 	(2,190	)	
Comprehensive income (loss)	$	19,746		 	$	(4,238	)	 	$	15,508		

See description of the net income (loss) impacts in the consolidated statement of operations for the year ended December 31, 2018 section above.
The increase to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets category.
The decreases to cash flow hedging and the reclassification of pension adjustments are from the correction of other immaterial errors.

F-23

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

F-24

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	Year Ended December 31, 2017	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
Net income (loss)	$	17,905		 	$	(2,021	)	 	$	15,884		
Other comprehensive income (loss), net of tax:			 	—		 			
Foreign currency translation adjustment	689		 	(41	)	 	648		
(Loss) gain on long-term intra-entity foreign currency transactions	—		 	—		 	—		
Cash flow hedging activity	(749	)	 	—		 	(749	)	
Reclassification of hedging activities into earnings	641		 	—		 	641		
Pension plan adjustment	1,510		 	—		 	1,510		
Reclassification of pension adjustments into earnings	306		 	—		 	306		
Total other comprehensive income (loss), net of tax	2,397		 	(41	)	 	2,356		
Comprehensive income (loss)	$	20,302		 	$	(2,062	)	 	$	18,240		
See description of the net income (loss) impacts in the consolidated statement of operations for the year ended December 31, 2017 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets category.

F-25

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED BALANCE SHEETS

														
	December 31, 2019	
 	As Previously Reported		Restatement Impacts		Restatement Reference		As Restated	
 	(In thousands)	
Assets	 		 					
Current assets	 		 					
Cash and cash equivalents	$	2,142			$	—					$	2,142		
Trade receivables, net	113,781			(5,400	)		a,b,d		108,381		
Inventory	109,621			185			f		109,806		
Prepaid expenses and other current assets	23,102			(11,757	)		a,b,f		11,345		
Current assets of discontinued operations	5,383			—					5,383		
Total current assets	254,029			(16,972	)				237,057		
Property, plant and equipment, net	22,324			—					22,324		
Goodwill	6,253			—					6,253		
Other intangible assets, net	3,141			—					3,141		
Deferred income taxes	3,853			2,395			e		6,248		
Deferred costs	10,941			—					10,941		
Other non-current assets	2,085			—					2,085		
Non-current assets of discontinued operations	614			—					614		
Total assets	$	303,240			$	(14,577	)				$	288,663		
Liabilities and stockholders' equity								
Current liabilities								
Accounts payable	$	111,117			$	231			f		$	111,348		
Accounts payable to NACCO Industries, Inc.	496			—					496		
Revolving credit agreements	23,497			—					23,497		
Accrued compensation	14,277			750			f		15,027		
Accrued product returns	8,697			—					8,697		
Other current liabilities	12,873			(339	)		a,e		12,534		
Current liabilities of discontinued operations	29,723			—					29,723		
Total current liabilities	200,680			642					201,322		
Revolving credit agreements	35,000			—					35,000		
Other long-term liabilities	12,501			3,574			e		16,075		
Total liabilities	248,181			4,216					252,397		
Stockholders’ equity								
Preferred stock, par value $0.01 per share	—			—					—		
Class A Common stock, par value $0.01 per share; 9,805 shares issued as of December 31, 2019	98			—					98		
Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 4,076 shares issued as of December 31, 2019	41			—					41		
Capital in excess of par value	54,344			165			f		54,509		
Treasury stock	(5,960	)		—					(5,960	)	
Retained earnings	22,524			(18,814	)		a,b,d,e,f		3,710		
Accumulated other comprehensive loss	(15,988	)		(144	)		a,b,d,e		(16,132	)	
Total stockholders’ equity	55,059			(18,793	)				36,266		
Total liabilities and stockholders' equity	$	303,240			$	(14,577	)				$	288,663		

F-26

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $2.5 million, a reduction to prepaid expenses and other current assets of $12.4 million, and an increase to other current liabilities of $0.9 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to trade receivables of $1.3 million and an increase to prepaid expenses and other current assets of $0.2 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in a decrease to trade receivables of $1.6 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $2.4 million, a decrease to other current liabilities of $1.2 million, and an increase to other long-term liabilities of $3.6 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to prepaid expenses and other current assets of $0.5 million, an increase to inventory of $0.2 million, an increase to accounts payable of $0.2 million, an increase to accrued compensation of $0.7 million, and an increase to capital in excess of par of $0.2 million

F-27

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED BALANCE SHEETS

														
`	December 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement Reference	 	As Restated	
Assets	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	
Cash and cash equivalents	$	4,420		 	$	—		 	 	 	$	4,420		
Trade receivables, net	100,821		 	(2,460	)	 	a,f	 	98,361		
Inventory	122,697		 	111		 	f	 	122,808		
Prepaid expenses and other current assets	22,332		 	(6,936	)	 	a	 	15,396		
Current assets of discontinued operations	27,879		 	—		 	 	 	27,879		
Total current assets	278,149		 	(9,285	)	 		 	268,864		
Property, plant and equipment, net	20,842		 	—		 	 	 	20,842		
Goodwill	6,253		 	—		 	 	 	6,253		
Other intangible assets, net	4,519		 	—		 	 	 	4,519		
Deferred income taxes	5,518		 	276		 	e	 	5,794		
Deferred costs	7,868		 	—		 	 	 	7,868		
Other non-current assets	2,672		 	—		 	 	 	2,672		
Non-current assets of discontinued operations	4,606		 	—		 	 	 	4,606		
Total assets	$	330,427		 	$	(9,009	)	 	 	 	$	321,418		
Liabilities and stockholders' equity		 		 	 	 		
Current liabilities		 		 	 	 		
Accounts payable	$	119,264		 	$	7		 	f	 	$	119,271		
Accounts payable to NACCO Industries, Inc.	2,416		 	—		 	 	 	2,416		
Revolving credit agreements	11,624		 	—		 	 	 	11,624		
Accrued compensation	15,525		 	353		 	f	 	15,878		
Accrued product returns	10,698		 	—		 	 	 	10,698		
Other current liabilities	24,554		 	(1,632	)	 	a,d,e,f	 	22,922		
Current liabilities of discontinued operations	22,820		 	—		 	 	 	22,820		
Total current liabilities	206,901		 	(1,272	)	 	 	 	205,629		
Revolving credit agreements	35,000		 	—		 	 	 	35,000		
Other long-term liabilities	21,128		 	883		 	e	 	22,011		
Non-current liabilities of discontinued operations	1,960		 	—		 	 	 	1,960		
Total liabilities	264,989		 	(389	)	 	 	 	264,600		
Stockholders’ equity		 		 	 	 		
Preferred stock, par value $0.01 per share	—		 	—		 	 	 	—		
Class A Common stock, par value $0.01 per share; 9,291 shares issued as of December 31, 2018	93		 	—		 	 	 	93		
Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 4,422 shares issued as of December 31, 2018	44		 	—		 	 	 	44		
Capital in excess of par value	51,714		 	—		 	 	 	51,714		
Treasury stock	—		 	—		 	 	 	—		
Retained earnings	30,897		 	(8,829	)	 	a,d,e,f	 	22,068		
Accumulated other comprehensive loss	(17,310	)	 	209		 	a,d,e,f	 	(17,101	)	
Total stockholders’ equity	65,438		 	(8,620	)	 	 	 	56,818		
Total liabilities and stockholders' equity	$	330,427		 	$	(9,009	)	 	 	 	$	321,418		

F-28

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $0.6 million, a reduction to prepaid expenses and other current assets of $6.9 million, and an increase to other current liabilities of $0.6 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.2 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $0.3 million, a decrease to other current liabilities of $0.4 million, and an increase to other long-term liabilities of $0.9 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to trade receivables of $1.9 million, an increase to inventory of $0.1 million, an increase to accrued compensation of $0.4 million, and a decrease to other current liabilities of $2.0 million

F-29

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF CASH FLOWS

												
	Year Ended December 31, 2019	
 	As Previously Reported		Restatement Impacts		As Restated	
 	(In thousands)	
Operating activities	 		 			
Net income from continuing operations	$	25,078			$	(9,985	)		$	15,093		
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:						
Depreciation and amortization	4,002			—			4,002		
Deferred income taxes	3,248			(1,761	)		1,487		
Stock compensation expense	2,632			165			2,797		
Other	471			145			616		
Net changes in operating assets and liabilities:						
Affiliate payable	(1,920	)		—			(1,920	)	
Trade receivables	(25,586	)		2,817			(22,769	)	
Inventory	13,756			(82	)		13,674		
Other assets	(3,121	)		4,248			1,127		
Accounts payable	(7,257	)		214			(7,043	)	
Other liabilities	(11,101	)		4,259			(6,842	)	
Net cash provided by operating activities from continuing operations	202			20			222		
Investing activities						
Expenditures for property, plant and equipment	(4,122	)		—			(4,122	)	
Other	—			—			—		
Net cash used for investing activities from continuing operations	(4,122	)		—			(4,122	)	
Financing activities						
Net additions (reductions) to revolving credit agreements	11,873			—			11,873		
Purchase of treasury stock	(5,960	)		—			(5,960	)	
Cash dividends paid	(4,851	)		—			(4,851	)	
Cash dividends to NACCO Industries, Inc.	—			—			—		
Net cash provided by (used for) financing activities from continuing operations	1,062			—			1,062		
Cash flows from discontinued operations									
Net cash provided by (used for) operating activities from discontinued operations	3,953			—			3,953		
Net cash provided by (used for) investing activities from discontinued operations	585			—			585		
Net cash used for financing activities from discontinued operations	(103	)		—			(103	)	
Cash provided by (used for) discontinued operations	4,435			—			4,435		
Effect of exchange rate changes on cash	(765	)		(20	)		(785	)	
Cash and Cash Equivalents						
(Decrease) increase for the year from continuing operations	(3,623	)		—			(3,623	)	
Increase (decrease) for the year from discontinued operations	4,435			—			4,435		
Balance at the beginning of the year	6,352			—			6,352		
Balance at the end of the year	$	7,164			$	—			$	7,164		
See description of the net income impacts in the consolidated statement of operations for the year ended December 31, 2019 section above.

F-30

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The only impact of the corrections for misstatements on net cash provided by operating activities from continuing operations was due to the effect of exchange rate changes on cash.

F-31

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF CASH FLOWS

												
 	Year Ended December 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
Operating activities	 	 	 	 	 	
Net income from continuing operations	$	27,145		 	$	(4,086	)	 	$	23,059		
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:		 		 		
Depreciation and amortization	4,277		 	—		 	4,277		
Deferred income taxes	5,185		 	289		 	5,474		
Stock compensation expense	3,618		 	—		 	3,618		
Other	868		 	(31	)	 	837		
Net changes in operating assets and liabilities:		 		 		
Affiliate payable	(5,300	)	 	—		 	(5,300	)	
Trade receivables	16,298		 	2,231		 	18,529		
Inventory	(12,308	)	 	53		 	(12,255	)	
Other assets	(10,509	)	 	5,923		 	(4,586	)	
Accounts payable	(7,756	)	 	37		 	(7,719	)	
Other liabilities	(4,195	)	 	(3,784	)	 	(7,979	)	
Net cash provided by operating activities from continuing operations	17,323		 	632		 	17,955		
Investing activities		 		 		
Expenditures for property, plant and equipment	(7,759	)	 	—		 	(7,759	)	
Other	—		 	—		 	—		
Net cash used for investing activities from continuing operations	(7,759	)	 	—		 	(7,759	)	
Financing activities		 		 		
Net additions (reductions) to revolving credit agreements	(4,597	)	 	—		 	(4,597	)	
Purchase of treasury stock	—		 	—		 	—		
Cash dividends paid	(4,658	)	 	—		 	(4,658	)	
Cash dividends to NACCO Industries, Inc.	—		 	—		 	—		
Net cash provided by (used for) financing activities from continuing operations	(9,255	)	 	—		 	(9,255	)	
Cash flows from discontinued operations			 	—		 			
Net cash provided by (used for) operating activities from discontinued operations	(5,499	)	 	—		 	(5,499	)	
Net cash provided by (used for) investing activities from discontinued operations	(305	)	 	—		 	(305	)	
Net cash used for financing activities from discontinued operations	—		 	—		 	—		
Cash provided by (used for) discontinued operations	(5,804	)	 	—		 	(5,804	)	
Effect of exchange rate changes on cash	941		 	(632	)	 	309		
Cash and Cash Equivalents		 		 		
(Decrease) increase for the year from continuing operations	1,250		 	—		 	1,250		
Increase (decrease) for the year from discontinued operations	(5,804	)	 	—		 	(5,804	)	
Balance at the beginning of the year	10,906		 	—		 	10,906		
Balance at the end of the year	$	6,352		 	$	—		 	$	6,352		
See description of the net income impacts in the consolidated statement of operations for the year ended December 31, 2018 section above.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The only impact of the corrections for misstatements on net cash provided by operating activities from continuing operations was due to the effect of exchange rate changes on cash.

F-33

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF CASH FLOWS

												
 	Year Ended December 31, 2017	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
Operating activities	 	 	 	 	 	
Net income from continuing operations	$	20,130		 	$	(2,021	)	 	$	18,109		
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities:		 		 		
Depreciation and amortization	4,072		 	—		 	4,072		
Deferred income taxes	4,107		 	(632	)	 	3,475		
Stock compensation expense	323		 	—		 	323		
Other	(1,167	)	 	—		 	(1,167	)	
Net changes in operating assets and liabilities:		 		 		
Affiliate payable	866		 	—		 	866		
Trade receivables	(8,442	)	 	314		 	(8,128	)	
Inventory	(16,485	)	 	(81	)	 	(16,566	)	
Other assets	(1,960	)	 	665		 	(1,295	)	
Accounts payable	25,009		 	—		 	25,009		
Other liabilities	1,850		 	1,755		 	3,605		
Net cash provided by operating activities from continuing operations	28,303		 	—		 	28,303		
Investing activities		 		 		
Expenditures for property, plant and equipment	(6,198	)	 	—		 	(6,198	)	
Other	21		 	—		 	21		
Net cash used for investing activities from continuing operations	(6,177	)	 	—		 	(6,177	)	
Financing activities		 		 		
Net additions (reductions) to revolving credit agreements	12,630		 	—		 	12,630		
Purchase of treasury stock	—		 	—		 	—		
Cash dividends paid	(1,162	)	 	—		 	(1,162	)	
Cash dividends to NACCO Industries, Inc.	(38,000	)	 	—		 	(38,000	)	
Net cash provided by (used for) financing activities from continuing operations	(26,532	)	 	—		 	(26,532	)	
Cash flows from discontinued operations			 			 			
Net cash provided by (used for) operating activities from discontinued operations	5,137		 	—		 	5,137		
Net cash provided by (used for) investing activities from discontinued operations	(1,176	)	 	—		 	(1,176	)	
Net cash used for financing activities from discontinued operations	(70	)	 	—		 	(70	)	
Cash provided by (used for) discontinued operations	3,891		 	—		 	3,891		
Effect of exchange rate changes on cash	81		 	—		 	81		
Cash and Cash Equivalents		 		 		
(Decrease) increase for the year from continuing operations	(4,325	)	 	—		 	(4,325	)	
Increase (decrease) for the year from discontinued operations	3,891		 	—		 	3,891		
Balance at the beginning of the year	11,340		 	—		 	11,340		
Balance at the end of the year	$	10,906		 	$	—		 	$	10,906		
See description of the net income impacts in the consolidated statement of operations for the year ended December 31, 2017 section above.

F-34

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The only impact of the corrections for misstatements on net cash provided by operating activities from continuing operations was due to the effect of exchange rate changes on cash.

F-35

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

																						
 	Class A common stock	Class B common stock	Capital in excess of par value	Treasury stock	Retained earnings	Accumulated other comprehensive income (loss)	Total stockholders' equity	
 	(In thousands, except per share data)	
As Previously Reported	 	 	 	 	 	 	 	
Balance, January 1, 2019	$	93		$	44		$	51,714		$	—		$	30,897		$	(17,310	)	$	65,438		
Net loss	—		—		—		—		(3,522	)	—		(3,522	)	
Issuance of common stock, net of conversions	5		(3	)	(2	)	—		—		—		—		
Purchase of treasury stock	—		—		—		(5,960	)	—		—		(5,960	)	
Share-based compensation expense	—		—		2,632		—		—		—		2,632		
Cash dividends, $0.355 per share	—		—		—		—		(4,851	)	—		(4,851	)	
Other comprehensive loss	—		—		—		—		—		719		719		
Reclassification adjustment to net loss	—		—		—		—		—		603		603		
Balance, December 31, 2019	$	98		$	41		$	54,344		$	(5,960	)	$	22,524		$	(15,988	)	$	55,059		
Restatement Impacts															
Balance, January 1, 2019	$	—		$	—		$	—		$	—		$	(8,829	)	$	209		$	(8,620	)	
Net loss	—		—		—		—		(9,985	)	—		(9,985	)	
Issuance of common stock, net of conversions	—		—		—		—		—		—		—		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		165		—		—		—		165		
Cash dividends, $0.355 per share	—		—		—		—		—		—		—		
Other comprehensive loss	—		—		—		—		—		(447	)	(447	)	
Reclassification adjustment to net loss	—		—		—		—		—		94		94		
Balance, December 31, 2019	$	—		$	—		$	165		$	—		$	(18,814	)	$	(144	)	$	(18,793	)	
As Restated															
Balance, January 1, 2019	$	93		$	44		$	51,714		$	—		$	22,068		$	(17,101	)	$	56,818		
Net loss	—		—		—		—		(13,507	)	—		(13,507	)	
Issuance of common stock, net of conversions	5		(3	)	(2	)	—		—		—		—		
Purchase of treasury stock	—		—		—		(5,960	)	—		—		(5,960	)	
Share-based compensation expense	—		—		2,797		—		—		—		2,797		
Cash dividends, $0.355 per share	—		—		—		—		(4,851	)	—		(4,851	)	
Other comprehensive loss	—		—		—		—		—		272		272		
Reclassification adjustment to net loss	—		—		—		—		—		697		697		
Balance, December 31, 2019	$	98		$	41		$	54,509		$	(5,960	)	$	3,710		$	(16,132	)	$	36,266		
See description of the net income and other comprehensive income (loss) impacts in the consolidated statement of operations and consolidated statement of comprehensive income (loss) for the year ended December 31, 2019 sections above.
The increase to share-based compensation expense and reclassification adjustment to net loss is the result of the correction of other immaterial errors.

F-36

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

																						
 	Class A common stock	Class B common stock	Capital in excess of par value	Treasury stock	Retained earnings	Accumulated other comprehensive income (loss)	Total stockholders' equity	
As Previously Reported	 	 	 	 	 	 	 	
Balance, January 1, 2018	$	88		$	48		$	47,773		$	—		$	12,603		$	(14,104	)	$	46,408		
Net loss	—		—		—		—		21,784		—		21,784		
Issuance of common stock, net of conversions	5		(4	)	323		—		—		—		324		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		3,618		—		—		—		3,618		
Cash dividends, $0.34 per share	—		—		—		—		(4,658	)	—		(4,658	)	
Reclassification due to adoption of ASU 2018-02	—		—		—		—		1,168		(1,168	)	—		
Other comprehensive loss	—		—		—		—		—		(2,841	)	(2,841	)	
Reclassification adjustment to net loss	—		—		—		—		—		803		803		
Balance, December 31, 2018	$	93		$	44		$	51,714		$	—		$	30,897		$	(17,310	)	$	65,438		
Restatement Impacts															
Balance, January 1, 2018	$	—		$	—		$	—		$	—		$	(4,743	)	$	361		$	(4,382	)	
Net loss	—		—		—		—		(4,086	)	—		(4,086	)	
Issuance of common stock, net of conversions	—		—		—		—		—		—		—		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		—		—		—		—		—		
Cash dividends, $0.34 per share	—		—		—		—		—		—		—		
Reclassification due to adoption of ASU 2018-02	—		—		—		—		—		—		—		
Other comprehensive loss	—		—		—		—		—		(58	)	(58	)	
Reclassification adjustment to net loss	—		—		—		—		—		(94	)	(94	)	
Balance, December 31, 2018	$	—		$	—		$	—		$	—		$	(8,829	)	$	209		$	(8,620	)	
As Restated															
Balance, January 1, 2018	$	88		$	48		$	47,773		$	—		$	7,860		$	(13,743	)	$	42,026		
Net loss	—		—		—		—		17,698		—		17,698		
Issuance of common stock, net of conversions	5		(4	)	323		—		—		—		324		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		3,618		—		—		—		3,618		
Cash dividends, $0.34 per share	—		—		—		—		(4,658	)	—		(4,658	)	
Reclassification due to adoption of ASU 2018-02	—		—		—		—		1,168		(1,168	)	—		
Other comprehensive loss	—		—		—		—		—		(2,899	)	(2,899	)	
Reclassification adjustment to net income	—		—		—		—		—		709		709		
Balance, December 31, 2018	$	93		$	44		$	51,714		$	—		$	22,068		$	(17,101	)	$	56,818		
See description of the net income and other comprehensive income (loss) impacts in the consolidated statement of operations and consolidated statement of comprehensive income (loss) for the year ended December 31, 2018 sections above.
The decrease to the reclassification adjustment to net loss is the result of the correction of other immaterial errors.

F-37

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

F-38

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

																						
 	Class A common stock	Class B common stock	Capital in excess of par value	Treasury stock	Retained earnings	Accumulated other comprehensive income (loss)	Total stockholders' equity	
As Previously Reported	 	 	 	 	 	 	 	
Balance, January 1, 2017	$	—		$	—		$	75,031		$	—		$	6,738		$	(16,501	)	$	65,268		
Net loss	—		—		—		—		17,905		—		17,905		
Issuance of common stock, net of conversions	88		48		(136	)	—		—		—		—		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		—		—		—		—		—		
Cash dividends to NACCO Industries, Inc.	—		—		(27,122	)	—		(10,878	)	—		(38,000	)	
Cash dividends, $0.085 per share	—		—		—		—		(1,162	)	—		(1,162	)	
Other comprehensive loss	—		—		—		—		—		1,450		1,450		
Reclassification adjustment to net loss	—		—		—		—		—		947		947		
Balance, December 31, 2017	$	88		$	48		$	47,773		$	—		$	12,603		$	(14,104	)	$	46,408		
Restatement Impacts															
Balance, January 1, 2017	$	—		$	—		$	—		$	—		$	(2,722	)	$	402		$	(2,320	)	
Net loss	—		—		—		—		(2,021	)	—		(2,021	)	
Issuance of common stock, net of conversions	—		—		—		—		—		—		—		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		—		—		—		—		—		
Cash dividends to NACCO Industries, Inc.	—		—		—		—		—		—		—		
Cash dividends, $0.085 per share	—		—		—		—		—		—		—		
Other comprehensive loss	—		—		—		—		—		(41	)	(41	)	
Reclassification adjustment to net loss	—		—		—		—		—		—		—		
Balance, December 31, 2017	$	—		$	—		$	—		$	—		$	(4,743	)	$	361		$	(4,382	)	
As Restated															
Balance, January 1, 2017	$	—		$	—		$	75,031		$	—		$	4,016		$	(16,099	)	$	62,948		
Net loss	—		—		—		—		15,884		—		15,884		
Issuance of common stock, net of conversions	88		48		(136	)	—		—		—		—		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		—		—		—		—		—		
Cash dividends to NACCO Industries, Inc.	—		—		(27,122	)	—		(10,878	)	—		(38,000	)	
Cash dividends, $0.085 per share	—		—		—		—		(1,162	)	—		(1,162	)	
Other comprehensive loss	—		—		—		—		—		1,409		1,409		
Reclassification adjustment to net income	—		—		—		—		—		947		947		
Balance, December 31, 2017	$	88		$	48		$	47,773		$	—		$	7,860		$	(13,743	)	$	42,026		
See description of the net income and other comprehensive income (loss) impacts in the consolidated statement of operations and consolidated statement of comprehensive income (loss) for the year ended December 31, 2017 sections above.

F-39

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

NOTE 3 - Discontinued Operations

On October 10, 2019, the Board approved the wind down of KC's retail operation due to further deterioration in foot traffic which lowered the Company's outlook for the prospect of a future return to profitability. By December 31, 2019 all retail stores were closed and operations ceased. Accordingly, KC meets the requirements to be reported as discontinued operations.

The Company expects the wind down to continue through the first half of 2020 to facilitate the settlement of remaining liabilities.

KC’s operating results are reflected as discontinued operations in the Consolidated Statements of Operation for all periods presented. The major line items constituting the loss from discontinued operations, net of tax are as follows: 

												
 	Year Ended December 31	
 	2019	 	2018	 	2017	
 	(In thousands)	
Revenue	$	100,860		 	$	113,469		 	$	128,520		
Cost of sales	62,927		 	61,972		 	69,708		
Gross profit	37,933		 	51,497		 	58,812		
Selling, general and administrative expenses (1)	54,047		 	58,035		 	61,033		
Lease termination expense (2)	15,186		 	—		 	435		
Operating loss	(31,300	)	 	(6,538	)	 	(2,656	)	
Interest expense	583		 	361		 	258		
Other expense, net	26		 	33		 	57		
Loss from discontinued operations before income taxes	(31,909	)	 	(6,932	)	 	(2,971	)	
Income tax benefit	(3,309	)	 	(1,571	)	 	(746	)	
Loss from discontinued operations, net of tax	$	(28,600	)	 	$	(5,361	)	 	$	(2,225	)	

(1)	Selling, general and administrative expenses includes $1.8 million of severance termination benefits of which $0.4 remains unpaid as of December 31, 2019 and included within accrued compensation (current liabilities of discontinued operations).	

(2)	KC recognized lease termination expense of $15.2 million for the estimated costs to terminate lease agreements in 2019 as a result of the decision to wind down the business. The lease termination obligation is measured at fair value using significant observable inputs, which is Level 2 as defined in the fair value hierarchy. The fair value of the lease termination obligation is based on the remaining lease rentals, including common area maintenance costs, real estate taxes, and penalties, adjusted for the effects of deferred rent, and reduced by estimated sublease rentals that could be reasonably obtained.	

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

KC’s assets and liabilities are reflected as assets and liabilities of discontinued operations in the Company’s Consolidated Balance Sheets for all periods presented. The major classes of assets and liabilities included as part of discontinued operations are as follows:

								
 	December 31	
 	2019	 	2018	
 	(In thousands)	
Assets	 	 	 	
Cash and cash equivalents	$	5,022		 	$	1,932		
Credit card receivables	51		 	1,771		
Inventory	—		 	21,994		
Prepaid expenses and other current assets	310		 	2,182		
Current assets of discontinued operations	$	5,383		 	$	27,879		
 	 	 	 	
Property, plant and equipment, net	$	—		 	$	1,788		
Deferred income taxes	614		 	2,645		
Other non-current assets	—		 	173		
Non-current assets of discontinued operations	$	614		 	$	4,606		
 	 	 	 	
Liabilities	 	 	 	
Accounts payable	$	4,594		 	$	13,704		
Accrued compensation	1,058		 	1,498		
Accrued product returns	—		 	243		
Lease termination liability	17,248		 	—		
Other current liabilities	6,823		 	7,375		
Current liabilities of discontinued operations	$	29,723		 	$	22,820		
 	 	 	 	
Other long-term liabilities	—		 	$	1,960		
Non-current liabilities of discontinued operations	$	—		 	$	1,960		

KC has operating leases for retail stores, a distribution warehouse and corporate office that contractually expire at various dates through 2026. Future minimum operating lease payments at December 31, 2019 are: 

				
 	Operating
Leases	
2020	$	10,942		
2021	5,863		
2022	4,027		
2023	2,458		
2024	1,534		
Subsequent to 2024	1,669		
Total minimum lease payments (1)	$	26,493		

(1)	Minimum lease payments have not been reduced by minimum sublease rentals of $6.2 million due in the future under contractual sublease agreements.	

Rental expense from discontinued operations net of sublease rental income and excluding termination costs for all operating leases, is reported in selling, general and administrative expenses of discontinued operations and was $14.3 million, $18.0 million and $19.7 million in 2019, 2018 and 2017, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

KC maintained a separate revolving line of credit facility (the "KC Facility") that was secured by substantially all of the assets of KC. The Company's decision to wind down KC and its retail operations constituted an event of default under the KC Facility. As a result, on October 23, 2019, KC and its lender entered into a Forbearance Agreement (the “Forbearance Agreement”). Under the terms of the Forbearance Agreement, the lender agreed to forebear from exercising its rights and remedies as a result of the events of default pending accelerated payment in full of the obligations under the KC facility on or before December 15, 2019. All obligations under the KC Facility were paid in full in accordance with the Forbearance Agreement and the KC Facility was terminated on December 3, 2019.

Neither Hamilton Beach Brands Holding Company nor HBB has guaranteed any obligations of KC.

NOTE 4 - Property, Plant and Equipment, Net

Property, plant and equipment, net includes the following:

								
 	December 31	
 	2019	 	2018	
Land	$	226		 	$	226		
Furniture and fixtures	13,071		 	12,583		
Building and improvements	10,116		 	10,084		
Machinery and equipment	32,761		 	30,728		
Construction in progress, including internal-use capitalized software	11,685		 	10,626		
Property, plant and equipment, at cost	67,859		 	64,247		
Less allowances for depreciation and amortization	45,535		 	43,405		
 	$	22,324		 	$	20,842		

NOTE 5 - Intangible Assets
Intangible assets other than goodwill, which are subject to amortization, consist of the following:

												
 	Gross Carrying
Amount	 	Accumulated
Amortization	 	Net
Balance	
Balance at December 31, 2019	 	 	 	 	 	
Customer relationships	$	5,760		 	$	(4,840	)	 	$	920		
Trademarks	3,100		 	(1,008	)	 	2,092		
Other intangibles	1,240		 	(1,111	)	 	129		
 	$	10,100		 	$	(6,959	)	 	$	3,141		
 	 	 	 	 	 	
Balance at December 31, 2018	 	 	 	 	 	
Customer relationships	$	5,760		 	$	(3,880	)	 	$	1,880		
Trademarks	3,100		 	(808	)	 	2,292		
Other intangibles	1,240		 	(893	)	 	347		
 	$	10,100		 	$	(5,581	)	 	$	4,519		
Amortization expense for intangible assets included in continuing operations was $1.4 million in 2019, 2018 and 2017.
Expected annual amortization expense of intangible assets for the next five years is $1.2 million in 2020 and $0.2 million in the remaining years. The weighted average amortization period for intangible assets is approximately 8.9 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

NOTE 6 - Current and Long-Term Financing

Financing arrangements exist at the subsidiary level. Hamilton Beach Brands Holding Company has not guaranteed any borrowings of its subsidiaries.

The following table summarizes HBB's available and outstanding borrowings:

								
 	December 31	
 	2019	 	2018	
Total outstanding borrowings for continuing operations:	 	 	 	
Revolving credit agreements	$	58,305		 	$	45,733		
Book overdrafts	192		 	891		
Total outstanding borrowings	$	58,497		 	$	46,624		
 	 	 	 	
Current portion of borrowings outstanding	$	23,497		 	$	11,624		
Long-term portion of borrowings outstanding	35,000		 	35,000		
 	$	58,497		 	$	46,624		
 	 		 	 	
Total available borrowings, net of limitations, under revolving credit agreements	$	114,366		 	$	114,669		
 	 		 	 	
Unused revolving credit agreements	$	56,061		 	$	68,936		
 	 	 	 	
Weighted average stated interest rate on total borrowings	4.16	%	 	4.12	%	
Weighted average effective interest rate on total borrowings (including interest rate swap agreements)	3.82	%	 	3.45	%	
Including swap settlements, interest paid on total debt was $3.1 million, $3.1 million, and $1.6 million during 2019, 2018, and 2017, respectively. Interest capitalized was $0.4 million in 2019, $0.3 million in 2018 and $0.2 million 2017.
HBB maintains a $115.0 million senior secured floating-rate revolving credit facility (the “HBB Facility”) that expires in June 2021. The current portion of borrowings outstanding represents expected voluntary repayments to be made in the next twelve months. The obligations under the HBB Facility are secured by substantially all of HBB's assets. The approximate book value of HBB's assets held as collateral under the HBB Facility was $297.2 million as of December 31, 2019.

The maximum availability under the HBB Facility is governed by a borrowing base derived from advance rates against eligible trade receivables, inventory and trademarks of the borrowers, as defined in the HBB Facility. Borrowings bear interest at a floating rate, which can be a base rate, LIBOR or bankers' acceptance rate, as defined in the HBB Facility, plus an applicable margin. The applicable margins, effective December 31, 2019, for base rate loans and LIBOR loans denominated in U.S. dollars were 0.0% and 1.75%, respectively. The applicable margins, effective December 31, 2019, for base rate loans and bankers' acceptance loans denominated in Canadian dollars were 0.0% and 1.75%, respectively. The HBB Facility also requires a fee of 0.25% per annum on the unused commitment. The margins and unused commitment fee under the HBB Facility are subject to quarterly adjustment based on average excess availability.

To reduce the exposure to changes in the market rate of interest, HBB has entered into interest rate swap agreements for a portion of the HBB Facility. Terms of the interest rate swap agreements require HBB to receive a variable interest rate and pay a fixed interest rate. HBB has interest rate swaps with notional values totaling $35.0 million at December 31, 2019 at an average fixed interest rate of 1.5%. HBB also has delayed-start interest rate swaps with notional values totaling $10.0 million as of December 31, 2019, with fixed rates of 1.7%.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The HBB Facility includes restrictive covenants, which, among other things, limit the payment of dividends to Hamilton Beach Holding, subject to achieving availability thresholds. Under Amendment No. 6 to the HBB Facility, dividends to Hamilton Beach Holding are not to exceed $5.0 million during any calendar year to the extent that for the thirty days prior to the dividend payment date, and after giving effect to the dividend payment, HBB maintains excess availability of not less than $15.0 million. Dividends to Hamilton Beach Holding are discretionary to the extent that for the 30 days prior to the dividend payment date, and after giving effect to the dividend payment, HBB maintains excess availability of not less than $25.0 million. The HBB Facility also requires HBB to achieve a minimum fixed charge coverage ratio in certain circumstances, as defined in the HBB Facility. At December 31, 2019, HBB was in compliance with all financial covenants in the HBB Facility.

NOTE 7 - Fair Value Disclosure

Recurring Fair Value Measurements

The Company measures its derivatives at fair value using significant observable inputs, which is Level 2 as defined in the fair value hierarchy. The Company uses a present value technique that incorporates the LIBOR swap curve, foreign currency spot rates and foreign currency forward rates to value its derivatives, including its interest rate swap agreements and foreign currency exchange contracts, and also incorporates the effect of its subsidiary and counterparty credit risk into the valuation.

Other Fair Value Measurement Disclosures

The carrying amounts of cash and cash equivalents, trade receivables and accounts payable approximate fair value due to the short-term maturities of these instruments. The fair values of revolving credit agreements, including book overdrafts, which approximate book value, were determined using current rates offered for similar obligations taking into account subsidiary credit risk, which is Level 2 as defined in the fair value hierarchy.

There were no transfers into or out of Levels 1, 2 or 3 during the years ended December 31, 2019 and 2018.

NOTE 8 - Derivative Financial Instruments
Foreign Currency Derivatives
HBB held forward foreign currency exchange contracts with total notional amounts of $13.2 million and $13.0 million at December 31, 2019, and 2018, respectively, denominated primarily in Canadian dollars and Mexican pesos. The fair value of these contracts approximated a payable of $0.3 million at December 31, 2019 and a net receivable of $0.1 million at December 31, 2018.
Forward foreign currency exchange contracts that qualify for hedge accounting are used to hedge transactions expected to occur within the next twelve months. The mark-to-market effect of forward foreign currency exchange contracts that are considered effective as hedges has been included in AOCI.
Interest Rate Derivatives
HBB has interest rate swaps that hedge interest payments on its one-month LIBOR borrowings. All swaps have been designated as cash flow hedges.
The following table summarizes the notional amounts, related rates and remaining terms of active and delayed interest rate swap agreements for HBB at December 31 in millions: 

																
 	Notional Amount	 	Average Fixed Rate	 	Remaining Term at	
 	2019	 	2018	 	2019	 	2018	 	December 31, 2019	
Interest rate swaps	$	20.0		 	$	20.0		 	1.4	%	 	1.4	%	 	Extending to January 2020	
Interest rate swaps	$	15.0		 	$	15.0		 	1.6	%	 	1.6	%	 	Extending to January 2024	
Delayed start interest rate swaps	$	10.0		 	$	10.0		 	1.7	%	 	1.7	%	 	Extending to January 2024	

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The fair value of HBB's interest rate swap agreements was a payable of $0.1 million at December 31, 2019 and a receivable of $1.1 million at December 31, 2018. The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in AOCI. The interest rate swap agreements held by HBB on December 31, 2019 are expected to continue to be effective as hedges.
The following table summarizes the fair value of derivative instruments at December 31 as recorded in the Consolidated Balance Sheets: 

																				
 	Asset Derivatives	 	Liability Derivatives	
 	Balance sheet location	 	2019	 	2018	 	Balance sheet location	 	2019	 	2018	
Interest rate swap agreements	 	 	 	 	 	 	 	 	 	 	 	
Current	Prepaid expenses and other current assets	 	$	—		 	$	349		 	Other current liabilities	 	$	21		 	$	—		
Long-term	Other non-current assets	 	—		 	710		 	Other long-term liabilities	 	61		 	—		
Foreign currency exchange contracts	 	 	 	 	 	 	 	 	 	 	 	
Current	Prepaid expenses and other current assets	 	—		 	231		 	Other current liabilities	 	308		 	87		
Total derivatives	 	 	$	—		 	$	1,290		 	 	 	$	390		 	$	87		

NOTE 9 - Leasing Arrangements

HBB leases certain office and warehouse facilities as well as machinery and equipment under noncancellable operating leases that expire at various dates through 2034. Many leases include renewal and/or fair value purchase options.

Future minimum operating lease payments at December 31, 2019 are:

				
 	Operating
Leases	
2020	$	6,114		
2021	4,089		
2022	1,816		
2023	1,574		
2024	1,590		
Subsequent to 2024	16,527		
Total minimum lease payments	$	31,710		

Rental expense from continuing operations net of sublease rental income for all operating leases, is reported in selling, general and administrative expenses and was $5.6 million in 2019 and 2018 and $5.3 million in 2017.

NOTE 10 - Stockholders' Equity and Earnings Per Share

Capital Stock

The authorized capital stock of the Company consists of Class A Common, Class B Common and one series of Preferred stock. Voting, dividend, conversion and liquidation rights of the Preferred stock is established by the Board upon issuance of such preferred stock.

Hamilton Beach Brands Holding Company Class A Common is traded on the New York Stock Exchange under the ticker symbol “HBB.” Because of transfer restrictions on Class B Common, no trading market has developed, or is expected to develop, for the Class B Common.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Subject to the rights of the holders of any series of preferred stock, each share of Class A Common will entitle the holder of the share to one vote on all matters submitted to stockholders, and each share of the Company's Class B Common will entitle the holder of the share to ten votes on all such matters. Subject to the rights of the preferred stockholders, each share of Class A Common and Class B Common will be equal in respect of rights to dividends, except that in the case of dividends payable in stock, only Class A Common will be distributed with respect to Class A Common and only Class B Common will be distributed with respect to Class B Common. As the liquidation and dividend rights are identical, any distribution of earnings would be allocated to Class A and Class B stockholders on a proportionate basis, and accordingly the net income per share for each class of common stock is identical.

The following table sets forth the Company's authorized capital stock information:

						
 	December 31	
 	2019	 	2018	
	(In thousands)	
Preferred stock, par value $0.01 per share	 	 	 	
Preferred stock authorized	5,000		 	5,000		
 	 	 	 	
Class A Common stock(1)(2)	 	 	 	
Class A Common stock authorized	70,000		 	70,000		
Treasury Stock	365		 	—		
 	 	 	 	
Class B Common stock(1)	 	 	 	
Class B Common stock authorized	30,000		 	30,000		
(1)    Class B Common converted to Class A Common were 345 shares during 2019 and 387 shares 2018.
(2)     The Company issued Class A Common shares of 169 during 2019 and 32 during 2018.

Stock Repurchase Program

In May 2018, the Company approved a stock repurchase program for the purchase of up to $25.0 million of the Company's Class A Common Stock outstanding through December 31, 2019. As of December 31, 2019, the Company repurchased 364,893 shares for an aggregate purchase price of $6.0 million. There were no share repurchases during the years ended December 31, 2018 and 2017, respectively.

On November 5, 2019, the Company's Board adopted a new stock repurchase program for the purchase of up to $25.0 million of the Company's Class A Common outstanding starting January 1, 2020 and ending December 31, 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Accumulated Other Comprehensive Income (Loss)

The following table summarizes changes in accumulated other comprehensive income (loss) by component and related tax effects for periods shown:

													
 	Foreign Currency	Deferred Gain (Loss) on Cash Flow Hedging	Pension Plan Adjustment	Total	
Balance, January 1, 2017 (As Restated)	$	(8,221	)	$	616		$	(8,494	)	$	(16,099	)	
Other comprehensive income (loss)	648		(456	)	2,446		2,638		
Reclassification adjustment to net income	—		916		511		1,427		
Tax effects	—		(568	)	(1,141	)	(1,709	)	
Balance, December 31, 2017 (As Restated)	$	(7,573	)	$	508		$	(6,678	)	$	(13,743	)	
Reclassification due to adoption of ASU 2018-02	—		118		(1,286	)	(1,168	)	
Other comprehensive income (loss)	(1,162	)	174		(2,583	)	(3,571	)	
Reclassification adjustment to net income	—		213		729		942		
Tax effects	83		(134	)	490		439		
Balance, December 31, 2018 (As Restated)	$	(8,652	)	$	879		$	(9,328	)	$	(17,101	)	
Other comprehensive income (loss)	481		(2,199	)	1,882		164		
Reclassification adjustment to net loss	—		490		727		1,217		
Tax effects	(50	)	489		(851	)	(412	)	
Balance, December 31, 2019 (As Restated)	$	(8,221	)	$	(341	)	$	(7,570	)	$	(16,132	)	

Earnings per share

The weighted average number of shares of Class A Common and Class B Common outstanding used to calculate basic and diluted earnings (loss) per share were as follows:

												
 	As Restated	
 	2019	 	2018	 	2017	
Basic weighted average shares outstanding	13,690		 	13,699		 	13,673		
Dilutive effect of share-based compensation awards	36		 	32		 	12		
Diluted weighted average shares outstanding	13,726		 	13,731		 	13,685		
 	 	 	 	 	 	
Basic and diluted earnings (loss) per share:	 	 	 	 			
Continuing operations	$	1.10			$	1.68			$	1.32		
Discontinued operations	(2.09	)		(0.39	)		(0.16	)	
Basic and diluted earnings (loss) per share	$	(0.99	)		$	1.29			$	1.16		

NOTE 11 - Revenue

A description of the performance obligations for HBB is as follows:

•	Product revenue - Product revenue consist of sales of small electric household and specialty housewares appliances to traditional brick and mortar and ecommerce retailers, distributors and directly to the end consumer as well as sales of commercial products for restaurants, bars and hotels. Transactions with these customers generally originate upon the receipt of a purchase order from the customer, which in some cases are governed by master sales agreements, specifying product(s) that the customer desires. Contracts for product revenue have an original duration of one year or less, and payment terms are generally standard and based on customer creditworthiness. Revenue from product sales is recognized at the point in time when control transfers to the customer, which is either when product is shipped from	

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

the Company's facility, or delivered to customers, depending on the shipping terms. The amount of consideration received and revenue recognized varies primarily with changes in returns and price concessions.

•	License revenues - From time to time, HBB enters into exclusive and non-exclusive licensing agreements which grant the right to use certain of HBB’s intellectual property (IP) in connection with designing, manufacturing, distributing, advertising, promoting and selling the licensees’ products during the term of the agreement. The IP that is licensed generally consists of trademarks, tradenames, trade dress, and/or logos (the “Licensed IP”). In exchange for granting the right to use the Licensed IP, HBB receives a royalty payment, which is a function of (1) the total net sales of products that use the Licensed IP and (2) the royalty percentage that is stated in the licensing agreement. HBB recognizes revenue at the later of when the subsequent sales occur or satisfying the performance obligation (over time).	

HBB’s warranty program to the consumer consists generally of an assurance-type limited warranty lasting for varying periods of up to ten years for electric appliances, with the majority of products having a warranty of one to three years.  HBB may repair or replace, at its option, those products returned under warranty.  Accordingly, the Company determined that no separate performance obligation exists.

HBB products are not sold with a general right of return. However, based on historical experience, a portion of products sold are estimated to be returned due to reasons such as product failure and excess inventory stocked by the customer, which, subject to certain terms and conditions, HBB will agree to accept. Product returns, customer programs and incentive offerings, including special pricing agreements, price competition, promotions, and other volume-based incentives are accounted for as variable consideration.

The following table presents the HBB's revenue on a disaggregated basis for the year ending:

								
 	As Restated	
 	Year Ended	
 	December 31	
 	2019	 	2018	
Type of good or service:	 	 	 	
  Products	$	607,307		 	$	626,423		
  Licensing	4,479		 	3,659		
     Total revenues	$	611,786		 	$	630,082		

Wal-Mart Inc. and its global subsidiaries accounted for approximately 33%, 33% and 32% of the HBB’s revenue in 2019, 2018, and 2017, respectively. Amazon.com, Inc. and its subsidiaries accounted for approximately 14%, 10%, and 12% of the HBB's revenue in 2019, 2018, and 2017 respectively. HBB’s five largest customers accounted for approximately 58%, 53%, and 54% of the HBB’s revenue for the years ended December 31, 2019, 2018, and 2017, respectively.

NOTE 12 - Contingencies

Various legal and regulatory proceedings and claims have been or may be asserted against the Company relating to the conduct of its businesses, including product liability, patent infringement, asbestos related claims, environmental and other claims. These proceedings and claims are incidental to the ordinary course of business of the Company. Management believes that it has meritorious defenses and will vigorously defend the Company in these actions. Any costs that management estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of the contingency and, in some circumstances, an estimate of the possible loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

These matters are subject to inherent uncertainties and unfavorable rulings could occur. If an unfavorable ruling were to occur, there exists the possibility of an adverse impact on the Company’s financial position, results of operations and cash flows of the period in which the ruling occurs, or in future periods.

HBB is a defendant in a legal proceeding in which the plaintiff alleges that certain HBB products infringe the plaintiff’s patents. On May 3, 2019, the jury returned its verdict finding that the Company had infringed certain patents of the plaintiff and, as a result, awarded the plaintiff damages in the amount of $3.2 million. Accordingly, the Company recorded $3.2 million expense in selling, general and administrative expenses during the second quarter of 2019 for the contingent loss included within other current liabilities on the Consolidated Balance Sheet as of December 31, 2019. On September 23, 2019 the Company filed post-trial motions challenging the jury verdict of infringement and the award of damages and the plaintiffs filed motions seeking interest, post-trial accounting, injunctive relief, and attorneys’ fees.  A hearing date on the post-trial motions has not been set.  The Company maintains that its products do not infringe on the plaintiff’s patents and will vigorously defend against the plaintiff's post-trial motions.

KC is a defendant in a legal proceeding in which the plaintiff alleges that KC is in breach of forty-nine store leases for failing to continue to operate the stores during the entire term of the leases and for the use of certain store sale signs. In November 2019, KC agreed to the entry of an order preventing the use of certain store sale signs in the specified stores. All KC stores ceased operations as of December 31, 2019. An estimate of the fair value of the future minimum lease liability obligation related to the subject store leases has been included in the results of discontinued operations.

Environmental matters

HBB is investigating or remediating historical environmental contamination at some current and former sites operated by HBB or by businesses it acquired. Based on the current stage of the investigation or remediation at each known site, HBB estimates the total investigation and remediation costs and the period of assessment and remediation activity required for each site. The estimate of future investigation and remediation costs is primarily based on variables associated with site clean-up, including, but not limited to, physical characteristics of the site, the nature and extent of the contamination and applicable regulatory programs and remediation standards. No assessment can fully characterize all subsurface conditions at a site. There is no assurance that additional assessment and remediation efforts will not result in adjustments to estimated remediation costs or the time frame for remediation at these sites.

HBB's estimates of investigation and remediation costs may change if it discovers contamination at additional sites or additional contamination at known sites, if the effectiveness of its current remediation efforts change, if applicable federal or state regulations change or if HBB's estimate of the time required to remediate the sites changes. HBB's revised estimates may differ materially from original estimates.

At December 31, 2019 and December 31, 2018, HBB had accrued undiscounted obligations of $4.4 million and $8.2 million respectively, for environmental investigation and remediation activities. The reduction in the amount accrued at December 31, 2019 compared to December 31, 2018 is the result of a reduction to the accrual recorded in the second quarter of 2019 due to a change in the expected type and extent of investigation and remediation activities associated with one of the sites based upon additional testing and assessment performed with respect to that site in the second quarter of 2019. HBB estimates that it is reasonably possible that it may incur additional expenses in the range of zero to $4.0 million related to the environmental investigation and remediation at these sites. Additionally, the Company recorded a $1.5 million receivable as of December 31, 2019 related to a probable recovery for environmental investigation and remediation costs associated with one of the sites from a responsible party in exchange for release from all future obligations by that party.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

NOTE 13 - Income Taxes

The components of income before income taxes and the income tax provision for the years ended December 31 are as follows:

												
 	As Restated	
 	2019	 	2018	 	2017	
Income (loss) before income taxes	 	 	 	 	 	
Domestic	$	24,835		 	$	30,835		 	$	34,136		
Foreign	(658	)	 	(350	)	 	2,940		
 	$	24,177		 	$	30,485		 	$	37,076		
Income tax provision (benefit)	 	 	 	 	 	
Current income tax provision (benefit):	 	 	 	 	 	
Federal	$	2,966		 	$	(323	)	 	$	12,647		
State	1,106		 	356		 	1,396		
Foreign	3,525		 	1,919		 	1,449		
Total current	7,597		 	1,952		 	15,492		
Deferred income tax provision (benefit):	 	 	 	 	 	
Federal	856		 	5,592		 	3,417		
State	1,676		 	447		 	(96	)	
Foreign	(1,045	)	 	(565	)	 	154		
Total deferred	1,487		 	5,474		 	3,475		
 	$	9,084		 	$	7,426		 	$	18,967		

The Company made federal income tax payments of $1.9 million, $8.3 million, and $9.9 million during 2019, 2018, and 2017, respectively, to the IRS and to NACCO as a member of the consolidated income tax return for periods prior to spin off. The Company made foreign and state income tax payments of $3.6 million, $2.6 million, and $1.9 million during 2019, 2018, and 2017, respectively. During the same periods, income tax refunds totaled $0.1 million in 2019 and $0.1 million in 2018. There were no tax refunds in 2017.

A reconciliation of the federal statutory and effective income tax rate for the years ended December 31 is as follows:

																					
 	As Restated	
 	2019	 	2018	 	2017	
 	$	 	%	 	$	 	%	 	$	 	%	
Income before income taxes	$	24,177		 			 	$	30,485		 			 	$	37,076		 			
Statutory taxes at 21.0% (35.0% in 2017)	$	5,077		 	21.0	 %	 	$	6,402		 	21.0	 %	 	$	12,976		 	35.0	 %	
State and local income taxes	1,031		 	4.3	 %	 	729		 	2.4	 %	 	824		 	2.2	 %	
Valuation allowances	2,190		 	9.1	 %	 	42		 	0.1	 %	 	344		 	0.9	 %	
Other non-deductible expenses	253		 	1.0	 %	 	429		 	1.4	 %	 	—		 	—	 %	
Credits	(1,195	)	 	(4.9	)%	 	(348	)	 	(1.1	)%	 	(458	)	 	(1.2	)%	
Provisional effect of the Tax Cuts and Jobs Act (the "Tax Act")	—		 	—	 %	 	—		 	—	 %	 	4,654		 	12.6	 %	
Non-deductible spin-related costs	—		 	—	 %	 	—		 	—	 %	 	540		 	1.5	 %	
Unrecognized tax benefits	2,719		 	11.2	 %	 	1,427		 	4.7	 %	 	(12	)	 	—	 %	
Other, net	(991	)	 	(4.1	)%	 	(1,255	)	 	(4.1	)%	 	99		 	0.3	 %	
Income tax provision	$	9,084		 	37.6	 %	 	$	7,426		 	24.4	 %	 	$	18,967		 	51.2	 %	

The valuation allowances in 2019 includes $2.0 million of deferred tax expense related to a change in judgment regarding the valuation allowances recorded against certain deferred tax assets of KC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

A detailed summary of the total deferred tax assets and liabilities in the Company's Consolidated Balance Sheets resulting from differences in the book and tax basis of assets and liabilities follows:

								
 	As Restated	
 	December 31	
 	2019	 	2018	
Deferred tax assets	 	 	 	
Tax carryforwards	$	2,867		 	$	1,456		
Inventory	316		 	—		
Accrued expenses and reserves	5,896		 	5,505		
Other employee benefits	1,500		 	2,349		
Other	1,412		 	996		
Total deferred tax assets	11,991		 	10,306		
Less: Valuation allowances	(1,069	)	 	(1,162	)	
 	10,922		 	9,144		
Deferred tax liabilities	 	 	 	
Inventory	—		 	37		
Accrued pension benefits	2,623		 	1,854		
Depreciation and amortization	2,051		 	1,459		
Total deferred tax liabilities	4,674		 	3,350		
Net deferred tax asset	$	6,248		 	$	5,794		

As of December 31, 2019 and 2018, respectively HBB maintained valuation allowances with respect to certain deferred tax assets relating primarily to operating losses in certain non-U.S. jurisdictions that HBB believes are not likely to be realized.

The following table summarizes the tax carryforwards and associated carryforward periods and related valuation allowances where the Company has determined that realization is uncertain: 

										
 	As Restated	
 	December 31, 2019	
 	Net deferred tax
asset	 	Valuation
allowance	 	Carryforwards
expire during:	
Non-U.S. net operating loss	$	2,867		 	$	987		 	2020 - Indefinite	
Total	$	2,867		 	$	987		 	 	

	
										
 	As Restated	
 	December 31, 2018	
 	Net deferred tax
asset	 	Valuation
allowance	 	Carryforwards
expire during:	
Non-U.S. net operating loss	$	1,456		 	$	917		 	2020 - Indefinite	
Total	$	1,456		 	$	917		 	 	

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The Company has valuation allowances for certain foreign deferred tax assets. Based upon the review of historical earnings and the relevant expiration of carryforwards, the Company believes the valuation allowances are appropriate and does not expect to release valuation allowances within the next twelve months that would have a significant effect on the Company’s financial position or results of operations.
As of December 31, 2019, the cumulative unremitted earnings of the Company's foreign subsidiaries are approximately $13.2 million. The Company has recorded the tax impact for the unremitted earnings as allowed under the Tax Act, a portion of which is classified in other long-term liabilities as the Company has elected to make payments over eight years. The Company continues to conclude all material entities’ foreign earnings will be indefinitely reinvested in its foreign operations and will remain offshore in order to meet the capital and business needs outside of the U.S. As a result, the Company does not provide a deferred tax liability with respect to the cumulative unremitted earnings. It is not practicable to determine the deferred tax liability associated with these undistributed earnings due to the availability of foreign tax credits and the complexity of the rules governing the utilization of such credits under the Tax Act. The Company made an accounting policy election to account for the global intangible low-tax income as a current period expense when incurred. The Company recognizes any tax impacts of global intangible low-taxed income (GILTI) as period costs similar to other special deductions, and not as deferred taxes for basis differences.
The following is a reconciliation of the Company's total gross unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the financial statements for the years ended December 31, 2019, 2018, and 2017. Approximately $3.0 million, $1.4 million, and $0.6 million of these gross amounts as of December 31, 2019, 2018, and 2017, respectively, relate to permanent items that, if recognized, would impact the effective income tax rate. This amount differs from the gross unrecognized tax benefits presented in the table below due to the decrease in U.S. federal income taxes which would occur upon the recognition of the state tax benefits included herein.

												
 	As Restated	
 	2019	 	2018	 	2017	
Balance at January 1	$	1,576		 	$	881		 	$	671		
Additions based on tax positions related to prior years	97		 	91		 	—		
Additions based on tax positions related to the current year	2,593		 	1,110		 	210		
Reductions due to settlements with taxing authorities	—		 	(506	)	 	—		
Balance at December 31	$	4,266		 	$	1,576		 	$	881		

The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The Company recorded immaterial amounts of interest and penalties as of December 31, 2019 and 2018, respectively. The Company expects the amount of unrecognized tax benefits will change within the next 12 months; however, the change in unrecognized tax benefits, which is reasonably possible within the next 12 months, is not expected to have a significant effect on the Company's financial position, results of operations or cash flows.

In general, the Company operates in taxing jurisdictions that provide a statute of limitations period ranging from three to five years for the taxing authorities to review the applicable tax filings. The examination of NACCO's 2013-2016 U.S. federal tax returns is ongoing. In addition, the Company does not have any material taxing jurisdictions in which the statute of limitations has been extended beyond the applicable time frame allowed by law.

NOTE 14 - Retirement Benefit Plans
Defined Benefit Plans
The Company maintains two defined benefit pension plans that provide benefits based on years of service and average compensation during certain periods.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The assumptions used in accounting for the defined benefit plans were as follows for the years ended December 31:

									
 	2019	 	2018	 	2017	
U.S. Plan	 	 	 	 	 	
Discount rate for pension benefit obligation	2.88	%	 	4.00	%	 	3.30	%	
Discount rate for net periodic benefit income	4.00	%	 	3.30	%	 	3.60	%	
Expected long-term rate of return on assets for net periodic pension income	7.50	%	 	7.50	%	 	7.50	%	
Non-U.S. Plan	 	 	 	 	 	
Discount rate for pension benefit obligation	2.96	%	 	3.50	%	 	3.25	%	
Discount rate for net periodic benefit (income) loss	3.50	%	 	3.50	%	 	3.75	%	
Expected long-term rate of return on assets for net periodic pension (income) loss	5.50	%	 	5.50	%	 	5.50	%	
Set forth below is a detail of the net periodic pension income for the defined benefit plans for the years ended December 31: 

												
 	2019	 	2018	 	2017	
U.S. Plan	 	 	 	 	 	
Interest cost	$	727		 	$	681		 	$	811		
Expected return on plan assets	(1,987	)	 	(2,047	)	 	(2,074	)	
Amortization of actuarial loss	561		 	623		 	501		
Net periodic pension income	$	(699	)	 	$	(743	)	 	$	(762	)	
 	 	 	 	 	 	
Non-U.S. Plan	 	 	 	 	 	
Interest cost	$	144		 	$	142		 	$	153		
Expected return on plan assets	(263	)	 	(286	)	 	(264	)	
Amortization of actuarial loss	72		 	200		 	10		
Net periodic pension (income) loss	$	(47	)	 	$	56		 	$	(101	)	
Set forth below is the detail of other changes in plan assets and benefit obligations recognized in other comprehensive loss (income) for the years ended December 31: 

												
 	2019	 	2018	 	2017	
U.S. Plan	 	 	 	 	 	
Current year actuarial loss (gain)	$	(1,727	)	 	$	2,347		 	$	(2,506	)	
Amortization of actuarial loss	(561	)	 	(623	)	 	(501	)	
Total recognized in other comprehensive loss (income)	$	(2,288	)	 	$	1,724		 	$	(3,007	)	
Non-U.S. Plan	 	 	 	 	 	
Current year actuarial loss	$	(155	)	 	$	236		 	$	60		
Amortization of actuarial loss	(72	)	 	(200	)	 	(10	)	
Total recognized in other comprehensive loss	$	(227	)	 	$	36		 	$	50		

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The following table sets forth the changes in the benefit obligation and the plan assets during the year and the funded status of the defined benefit plans at December 31: 

																
 	2019	 	2018	
 	U.S.
Plan	 	Non-U.S.
Plan	 	U.S. Plan	 	Non-U.S.
Plan	
Change in benefit obligation	 	 	 	 	 	 	 	
Projected benefit obligation at beginning of year	$	19,131		 	$	4,084		 	$	21,716		 	$	4,604		
Interest cost	727		 	144		 	681		 	142		
Actuarial (gain) loss	1,266		 	311		 	(1,278	)	 	(148	)	
Benefits paid	(1,750	)	 	(182	)	 	(1,988	)	 	(151	)	
Foreign currency exchange rate changes	—		 	213		 	—		 	(363	)	
Projected benefit obligation at end of year	$	19,374		 	$	4,570		 	$	19,131		 	$	4,084		
Accumulated benefit obligation at end of year	$	19,374		 	$	4,570		 	$	19,131		 	$	4,084		
Change in plan assets	 	 	 	 	 	 	 	
Fair value of plan assets at beginning of year	$	25,671		 	$	4,744		 	$	29,237		 	$	5,456		
Actual return on plan assets	4,979		 	726		 	(1,578	)	 	(111	)	
Benefits paid	(1,750	)	 	(182	)	 	(1,988	)	 	(151	)	
Foreign currency exchange rate changes	—		 	62		 	—		 	(450	)	
Fair value of plan assets at end of year	$	28,900		 	$	5,350		 	$	25,671		 	$	4,744		
Funded status at end of year	$	9,526		 	$	780		 	$	6,540		 	$	660		
Amounts recognized in the balance sheets consist of:	 	 	 	 	 	 	 	
Non-current assets	$	9,526		 	$	780		 	$	6,540		 	$	660		
Components of accumulated other comprehensive loss consist of:	 	 	 	 	 	 	 	
Actuarial loss	$	(9,140	)	 	$	(1,058	)	 	$	(11,427	)	 	$	(1,225	)	
Deferred taxes and other	2,280		 	348		 	2,933		 	485		
 	$	(6,860	)	 	$	(710	)	 	$	(8,494	)	 	$	(740	)	
The actuarial loss included in accumulated other comprehensive loss expected to be recognized in net periodic pension income in 2020 is $0.7 million.
The Company recognizes as a component of benefit cost (income), as of the measurement date, any unrecognized actuarial net gains or losses that exceed 10% of the larger of the projected benefit obligations or the plan assets, defined as the "corridor." Amounts outside the corridor are amortized over the average expected remaining lifetime of inactive participants for the pension plans. The gain (loss) amounts recognized in AOCI are not expected to be fully recognized until the plan is terminated or as settlements occur, which would trigger accelerated recognition.
The Company's policy is to make contributions to fund its pension plans within the range allowed by applicable regulations. The Company does not expect to contribute to its U.S. and non-U.S. pension plans in 2020.
Pension benefit payments are made from assets of the pension plans.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Future pension benefit payments expected to be paid from assets of the pension plans are:

								
 	U.S. Plan	 	Non-U.S. Plan	
2020	$	2,200		 	$	184		
2021	1,870		 	215		
2022	1,880		 	246		
2023	1,698		 	243		
2024	1,591		 	249		
2025 - 2029	6,148		 	1,322		
 	$	15,387		 	$	2,459		
The expected long-term rate of return on defined benefit plan assets reflects management's expectations of long-term rates of return on funds invested to provide for benefits included in the projected benefit obligations. In establishing the expected long-term rate of return assumption for plan assets, the Company considers the historical rates of return over a period of time that is consistent with the long-term nature of the underlying obligations of these plans as well as a forward-looking rate of return. The historical and forward-looking rates of return for each of the asset classes used to determine the Company's estimated rate of return assumption were based upon the rates of return earned or expected to be earned by investments in the equivalent benchmark market indices for each of the asset classes.
Expected returns for U.S. pension plans are based on a calculated market-related value for U.S. pension plan assets. Under this methodology, asset gains and losses resulting from actual returns that differ from the Company's expected returns are recognized in the market-related value of assets ratably over three years. Expected returns for non-U.S. pension plans are based on fair market value for non-U.S. pension plan assets.
The pension plans maintain investment policies that, among other things, establish a portfolio asset allocation methodology with percentage allocation bands for individual asset classes. The investment policies provide that investments are reallocated between asset classes as balances exceed or fall below the appropriate allocation bands.
The following is the actual allocation percentage and target allocation percentage for the U.S. pension plan assets at December 31: 

								
 	2019
Actual
Allocation	 	2018
Actual
Allocation	 	Target Allocation
Range	
U.S. equity securities	45.9	%	 	43.8	%	 	36.0% - 54.0%	
Non-U.S. equity securities	20.4	%	 	19.3	%	 	16.0% - 24.0%	
Fixed income securities	33.2	%	 	36.4	%	 	30.0% - 40.0%	
Money market	0.5	%	 	0.5	%	 	0.0% - 10.0%	
The following is the actual allocation percentage and target allocation percentage for the Non-U.S. pension plan assets at December 31: 

								
 	2019
Actual
Allocation	 	2018
Actual
Allocation	 	Target Allocation
Range	
Canadian equity securities	30.2	%	 	29.5	%	 	25.0% - 35.0%	
Non-Canadian equity securities	32.3	%	 	29.9	%	 	25.0% - 35.0%	
Fixed income securities	37.5	%	 	40.6	%	 	30.0% - 50.0%	
Cash and cash equivalents	—	%	 	—	%	 	0.0% - 5.0%	

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The fair value of each major category of the Company's U.S. pension plan assets are valued using quoted market prices in active markets for identical assets, or Level 1 in the fair value hierarchy. The fair value of each major category of the Company's Non-U.S. pension plan assets are valued using observable inputs, either directly or indirectly, other than quoted market prices in active markets for identical assets. Following are the values as of December 31: 

																
 	U.S. Plan	 	Non-U.S. Plan	
 	2019	 	2018	 	2019	 	2018	
U.S. equity securities	$	13,255		 	$	11,251		 	$	929		 	$	735		
Non-U.S. equity securities	5,904		 	4,930		 	2,412		 	2,081		
Fixed income securities	9,596		 	9,350		 	2,009		 	1,928		
Money market	145		 	140		 	—		 	—		
Total	$	28,900		 	$	25,671		 	$	5,350		 	$	4,744		

Defined Contribution Plans

HBB maintains a defined contribution (401(k)) plan for substantially all U.S. employees and similar plans for employees outside of the U.S. The Company provides employer matching (or safe harbor) contributions based on plan provisions. The defined contribution retirement plans also provide for an additional minimum employer contribution. Certain plans also permit additional contributions whereby the applicable company’s contribution to participants is determined annually based on a formula that includes the effect of actual operating results compared with targeted operating results and the age and/or compensation of the participants. Total costs, including Company contributions, for these plans were $5.0 million in 2019 and $5.3 million in 2018 and 2017.

NOTE 15 - Data by Geographic Region
Revenue and property, plant and equipment related to continuing operations outside the U.S., based on customer and asset location, are as follows:

												
 	U.S.	 	Other	 	Consolidated	
2019	 	 	 	 	 	
Revenue from unaffiliated customers (As Restated)	$	463,608		 	$	148,178		 	$	611,786		
Property, plant and equipment, net	$	16,828		 	$	5,496		 	$	22,324		
2018		 		 		
Revenue from unaffiliated customers (As Restated)	$	488,520		 	$	141,562		 	$	630,082		
Property, plant and equipment, net	$	15,344		 	$	5,498		 	$	20,842		
2017			 			 			
Revenue from unaffiliated customers (As Restated)	$	478,770		 	$	133,286		 	$	612,056		
Property, plant and equipment, net	$	10,974		 	$	5,005		 	$	15,979		
No single country outside of the U.S. comprised 10% or more of HBB's revenue from unaffiliated customers.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

NOTE 16 - Quarterly Results of Operations (Unaudited)

In the fourth quarter of 2019, KC met the requirements to be reported as a discontinued operation. The following consolidated financial tables reflect KC as a discontinued operation for all periods presented and are labeled "Recast". See Note 3, Discontinued Operations for more information.

A summary of the unaudited results of operations for the year ended December 31 is as follows:

																
 	2019	
 	As Restated and Recast	
 	First
Quarter	 	Second
Quarter	 	Third
Quarter	 	Fourth
Quarter	
Revenue	$	126,642			$	131,065			$	149,508			$	204,570		
Gross profit	$	26,702			$	28,507			$	30,946			$	42,397		
Operating profit	$	111			$	3,185			$	4,439			$	19,060		
 												
Income (loss) from continuing operations, net of tax	$	(662	)		$	1,898			$	553			$	13,304		
Loss from discontinued operations, net of tax	(2,723	)		(2,516	)		(2,753	)		(20,608	)	
Net income (loss)	$	(3,385	)		$	(618	)		$	(2,200	)		$	(7,304	)	
 												
Basic and diluted earnings (loss) per share:												
Continuing operations	$	(0.05	)		$	0.14			$	0.04			$	0.98		
Discontinued operations	(0.20	)		(0.18	)		(0.20	)		(1.52	)	
Basic and diluted earnings (loss) per share	$	(0.25	)		$	(0.04	)		$	(0.16	)		$	(0.54	)	

	
																
 	2018	
 	As Restated and Recast	
 	First
Quarter	 	Second
Quarter	 	Third
Quarter	 	Fourth
Quarter	
Revenue	$	125,032			$	135,583			$	171,301			$	198,166		
Gross profit	$	27,928			$	30,727			$	38,404			$	41,993		
Operating profit	$	1,794			$	3,944			$	11,763			$	16,050		
 												
Income from continuing operations, net of tax	$	894			$	1,645			$	9,030			$	11,490		
(Loss) income from discontinued operations, net of tax	(3,077	)		(2,766	)		(1,889	)		2,371		
Net income (loss)	$	(2,183	)		$	(1,121	)		$	7,141			$	13,861		
 												
Basic and diluted earnings (loss) per share:												
Continuing operations	$	0.07			$	0.12			$	0.66			$	0.84		
Discontinued operations	(0.22	)		(0.20	)		(0.14	)		0.17		
Basic and diluted earnings (loss) per share	$	(0.15	)		$	(0.08	)		$	0.52			$	1.01		

Quarterly Discussion and Analysis

Revenue

Revenue for the first quarter of 2019 increased $1.6 million, or 1.3% compared to the first quarter of 2018 due to sales of new and higher priced products in the U.S. consumer market partially offset by lower sales volume in the international consumer market and unfavorable foreign currency movements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

Revenue for the second quarter of 2019 decreased $4.5 million, or 3.3% compared to the second quarter of 2018 primarily due to lower sales volume in the U.S. consumer and global commercial markets, partially offset by increased sales in the international consumer market.

Revenue for the third quarter of 2019 decreased $21.8 million, or 12.7% compared to the third quarter of 2018 primarily due to lower sales volume in the U.S. and international consumer markets. The lower sales volume in the U.S. was primarily due to a significant change in retailer order patterns and lower direct import sales driven by the adverse impact of tariffs. Also contributing to the third-quarter revenue shortfall was a loss of placements in the dollar store channel resulting from HBB's decision to not maintain this low margin business, ongoing foot traffic challenges at some retailers and other pressure points facing individual retail companies. HBB's international consumer markets reported lower sales volume due in large part to a one-time special purchase in 2018 by a customer in Latin America and to a lesser degree to reduced demand in several markets.

Gross profit

Gross profit for the first quarter of 2019 decreased $1.2 million, or 4.4% compared to the first quarter of 2018. As a percentage of revenue, gross profit declined from 22.3% to 21.1%. Gross profit margin declined primarily due to higher product costs arising from increased inbound freight expenses and unfavorable foreign currency movements.

Gross profit for the second quarter of 2019 decreased $2.2 million, or 7.2% compared to the second quarter of 2018 primarily due to lower sales volume. As a percentage of revenue, gross profit declined from 22.7% to 21.8% due to increased inbound freight expenses and unfavorable foreign currency movements.

Gross profit for the third quarter of 2019 decreased $7.5 million, or 19.4% compared to the third quarter of 2018 primarily due to lower sales volume. As a percentage of revenue, gross profit declined from 22.4% to 20.7% primarily due to to higher inbound freight, transportation and warehousing expenses, and the adverse impact of tariffs.

Selling, general and administrative expenses

Selling, general and administrative expenses for the first quarter of 2019 increased $0.4 million, or 1.8% compared to first quarter of 2018 due to increased legal and professional service fees.

Selling, general and administrative expenses for the second quarter decreased $1.5 million, or 5.5% compared to second quarter of 2018 primarily due to a $3.7 million decline in the environmental reserve at one site and lower employee-related costs, partially offset by a one-time charge of $3.2 million for a contingent loss related to patent litigation.

Selling, general and administrative expenses for the third quarter of 2019 decreased $0.1 million, or 0.5% compared to the third quarter of 2018, including a decline of $1.2 million primarily due to lower legal and professional services fees and a decrease in employee-related costs due to reduced incentive compensation expense.

Certain former employees of one of the Company's Mexico subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries and in doing so expenditures were deferred on the balance sheet of the Mexican subsidiaries beyond the period for which the costs pertained. Included in selling, general and administrative expenses are non-cash charges to write-off unrealizable assets created as a result of these unauthorized transactions as follows:
		
•	Expenses of $1.8 million and $2.0 million for the three months ended March 31, 2019 and 2018, respectively;	
		
•	Expenses of $0.6 million and $1.0 million for the three months ended June 30, 2019 and 2018, respectively; and	
		
•	Expenses of $2.7 million and $1.5 million for the three months ended September 30, 2019 and 2018, respectively.	

Interest expense, net
During the first quarter of 2019, interest expense, net increased $0.2 million from the first quarter of 2018 primarily due to an increase in average borrowings outstanding under HBB's revolving credit facility and higher average interest rates.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

In the second quarter of 2019, interest expense, net remained consistent with the prior year. A decrease in average borrowings outstanding under HBB's revolving credit facility was offset by higher average interest rates.

In the third quarter of 2019 interest expense, net decreased $0.1 million from the third quarter of 2018 primarily due to decreased average borrowings outstanding under HBB's revolving credit facility.

Other expense, net
In the first quarter of 2019, other income, net decreased $0.3 million compared with other income in 2018 primarily due to unfavorable foreign currency movements as the Mexican peso weakened against the U.S. dollar during the period.

Other income for the second quarter of 2019 includes currency gains of $0.1 million compared with other expense in 2018 related to currency losses of $0.7 million.

Other expense for the third quarter of 2019 includes currency losses of $0.8 million compared with other income in 2018 related to currency gains of $0.2 million.

Income tax expense

The Company recognized $0.3 income tax expense in the first quarter of 2019 on a loss before income taxes of $0.4 million. The expense in 2019 is primarily attributable to non-cash charges to write-off unrealizable assets for which the corresponding tax benefit has been substantially offset by an increase in unrecognized tax benefits. The first quarter of 2018 included an insignificant one-time tax benefit recorded in the first three months of 2019 related to the non-U.S. pension plan. The Company recognized an income tax expense of $0.6 million in the second quarter of 2019 on income from continuing operations before income taxes of $2.5 million, an effective tax rate of 43.1% for the six months ended June 30, 2019. The effective tax rate increased from 40.5% in the first six months of 2018 primarily due to increased tax credits reflected in the forecasted 2019 effective tax rate. During the third quarter of 2019, the Company recognized income tax expense of $2.4 million on income from continuing operations before income taxes of $3.0 million.

Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements

In lieu of filing amended quarterly reports on Form 10-Q, the following tables represent our restated unaudited condensed consolidated financial statements for each of the quarters during the years ended December 31, 2019 and 2018. See Note 2, Restatement of Previously Issued Consolidated Financial Statements, for additional information.

Following the restated consolidated financial statement tables, we have presented a reconciliation from our prior periods, as previously reported, to the restated values. The values as previously reported were derived from our Quarterly Reports on Form 10-Q for the interim periods of 2019 and from the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed on February 26, 2020. In the fourth quarter of 2019, KC met the requirements to be reported as a discontinued operation. The following consolidated financial tables reflect KC as a discontinued operation for all periods presented and are labeled "Recast".

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																								
 	As Restated and Recast	
 	December 31, 2019	 	September 30, 2019	 	June 30, 2019	 	March 31, 2019	
 	Three Months Ended	 	Three Months Ended	 	Nine Months Ended	 	Three Months Ended	 	Six Months Ended	 	Three Months Ended	
 	(In thousands, except per share data)	
Revenue	$	204,570			$	149,508			$	407,216			$	131,065			$	257,707			$	126,642		
Cost of sales	162,173			118,562			321,060			102,558			202,498			99,940		
Gross profit	42,397			30,946			86,155			28,507			55,209			26,702		
Selling, general and administrative expenses	22,996			26,165			77,385			24,976			51,222			26,246		
Amortization of intangible assets	341			345			1,036			346			691			345		
Operating profit (loss)	19,060			4,439			7,734			3,185			3,296			111		
Interest expense, net	767			756			2,208			789			1,452			663		
Other expense (income), net	(710	)		681			352			(132	)		(329	)		(197	)	
Income (loss) from continuing operations before income taxes	19,003			3,002			5,174			2,528			2,173			(355	)	
Income tax expense (benefit)	5,699			2,449			3,385			630			937			307		
Net income (loss) from continuing operations	13,304			553			1,789			1,898			1,236			(662	)	
Loss from discontinued operations, net of tax	(20,608	)		(2,753	)		(7,992	)		(2,516	)		(5,239	)		(2,723	)	
Net loss	$	(7,304	)		$	(2,200	)		$	(6,203	)		$	(618	)		$	(4,003	)		$	(3,385	)	
 												
Basic and diluted earnings (loss) per share:																
Continuing operations	$	0.98			$	0.04			$	0.13			$	0.14			$	0.09			$	(0.05	)	
Discontinued operations	(1.52	)		(0.20	)		(0.58	)		(0.18	)		(0.38	)		(0.20	)	
Basic and diluted earnings (loss) per share	$	(0.54	)		$	(0.16	)		$	(0.45	)		$	(0.04	)		$	(0.29	)		$	(0.25	)	
 																		
Basic weighted average shares outstanding	13,518			13,579			13,726			13,813			13,800			13,786		
Diluted weighted average shares outstanding	13,625			13,595			13,731			13,826			13,813			13,786		

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																								
 	As Restated and Recast	
 	December 31, 2018	 	September 30, 2018	 	June 30, 2018	 	March 31, 2018	
 	Three Months Ended	 	Three Months Ended	 	Nine Months Ended	 	Three Months Ended	 	Six Months Ended	 	Three Months Ended	
 	(In thousands, except per share data)	
Revenue	$	198,166			$	171,301			$	431,916			$	135,583			$	260,615			$	125,032		
Cost of sales	156,173			132,897			334,857			104,856			201,960			97,104		
Gross profit	41,993			38,404			97,059			30,727			58,655			27,928		
Selling, general and administrative expenses	25,599			26,296			78,522			26,437			52,225			25,789		
Amortization of intangible assets	345			345			1,036			346			691			345		
Operating profit	16,050			11,763			17,501			3,944			5,738			1,794		
Interest expense, net	711			886			2,205			809			1,319			510		
Other expense (income), net	429			(433	)		(280	)		679			153			(526	)	
Income from continuing operations before income taxes	14,910			11,310			15,576			2,456			4,266			1,810		
Income tax expense	3,420			2,280			4,007			811			1,727			916		
Net income from continuing operations	11,490			9,030			11,569			1,645			2,539			894		
Income (loss) from discontinued operations, net of tax	2,371			(1,889	)		(7,732	)		(2,766	)		(5,843	)		(3,077	)	
Net income (loss)	$	13,861			$	7,141			$	3,837			$	(1,121	)		$	(3,304	)		$	(2,183	)	
 												
Basic and diluted earnings (loss) per share:																
Continuing operations	$	0.84			$	0.66			$	0.84			$	0.12			$	0.19			$	0.07		
Discontinued operations	0.17			(0.14	)		(0.56	)		(0.20	)		(0.43	)		(0.22	)	
Basic and diluted earnings (loss) per share	$	1.01			$	0.52			$	0.28			$	(0.08	)		$	(0.24	)		$	(0.15	)	
 																		
Basic weighted average shares outstanding	13,714			13,704			13,694			13,695			13,689			13,683		
Diluted weighted average shares outstanding	13,844			13,713			13,697			13,704			13,693			13,692		

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

																								
 	As Restated	
 	December 31, 2019	 	September 30, 2019	 	June 30, 2019	 	March 31, 2019	
 	Three Months Ended	 	Three Months Ended	 	Nine Months Ended	 	Three Months Ended	 	Six Months Ended	 	Three Months Ended	
 	(In thousands)	
Net income (loss)	$	(7,304	)		$	(2,200	)		$	(6,203	)		$	(618	)		$	(4,003	)		$	(3,385	)	
Other comprehensive income (loss), net of tax:																		
Foreign currency translation adjustment	201			(18	)		309			113			327			214		
(Loss) gain on long-term intra-entity foreign currency transactions	294			(509	)		(373	)		121			136			15		
Cash flow hedging activity	(143	)		(127	)		(1,426	)		(877	)		(1,299	)		(422	)	
Reclassification of hedging activities into earnings	81			122			268			144			146			2		
Pension plan adjustment	1,410			—			—			—			—			—		
Reclassification of pension adjustments into earnings	35			127			313			102			186			84		
Total other comprehensive income (loss), net of tax	1,878			(405	)		(909	)		(397	)		(504	)		(107	)	
Comprehensive income (loss)	$	(5,426	)		$	(2,605	)		$	(7,112	)		$	(1,015	)		$	(4,507	)		$	(3,492	)	

	
																								
 	As Restated	
 	December 31, 2018	 	September 30, 2018	 	June 30, 2018	 	March 31, 2018	
 	Three Months Ended	 	Three Months Ended	 	Nine Months Ended	 	Three Months Ended	 	Six Months Ended	 	Three Months Ended	
 	(In thousands)	
Net income (loss)	$	13,861			$	7,141			$	3,837			$	(1,121	)		$	(3,304	)		$	(2,183	)	
Other comprehensive income (loss), net of tax:																		
Foreign currency translation adjustment	(1,135	)		902			1,063			(412	)		161			573		
(Loss) gain on long-term intra-entity foreign currency transactions	60			(53	)		(1,066	)		(1,013	)		(1,013	)		—		
Cash flow hedging activity	(352	)		(301	)		452			464			753			289		
Reclassification of hedging activities into earnings	48			(102	)		105			41			207			166		
Pension plan adjustment	(1,920	)		—			—			—			—			—		
Reclassification of pension adjustments into earnings	141			115			415			142			300			158		
Total other comprehensive income (loss), net of tax	(3,158	)		561			969			(778	)		408			1,186		
Comprehensive income (loss)	$	10,703			$	7,702			$	4,805			$	(1,899	)		$	(2,896	)		$	(997	)	

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

												
`	As Restated and Recast	
 	September 30, 2019	 	June 30, 2019	 	March 31, 2019	
 	(In thousands)	
Assets	 	 	 	 	 	
Current assets	 	 	 	 	 	
Cash and cash equivalents	$	1,559			$	1,029			$	1,636		
Trade receivables, net	103,091			86,268			79,102		
Inventory	161,043			121,472			120,707		
Prepaid expenses and other current assets	14,086			16,412			17,379		
Current assets of discontinued operations	22,830			21,255			24,692		
Total current assets	302,609			246,436			243,516		
Property, plant and equipment, net	22,193			21,649			20,984		
Goodwill	6,253			6,253			6,253		
Other intangible assets, net	3,483			3,828			4,174		
Deferred income taxes	5,640			3,754			3,166		
Deferred costs	8,804			8,564			8,316		
Other non-current assets	1,553			1,984			2,403		
Non-current assets of discontinued operations	1,744			4,420			4,446		
Total assets	$	352,279			$	296,888			$	293,258		
Liabilities and stockholders' equity						
Current liabilities						
Accounts payable	$	140,011			$	86,199			$	73,720		
Accounts payable to NACCO Industries, Inc.	220			220			2,425		
Revolving credit agreements	50,152			51,505			54,812		
Accrued compensation	14,650			11,725			8,398		
Accrued product returns	8,266			8,224			9,314		
Other current liabilities	25,880			21,382			17,705		
Current liabilities of discontinued operations	24,713			20,048			21,473		
Total current liabilities	263,892			199,303			187,847		
Revolving credit agreements	30,000			30,000			30,000		
Other long-term liabilities	14,258			14,699			18,619		
Non-current liabilities of discontinued operations	1,585			3,697			3,834		
Total liabilities	309,735			247,699			240,300		
Stockholders’ equity						
Class A Common stock	95			95			95		
Class B Common stock	44			44			44		
Capital in excess of par value	54,143			53,342			52,520		
Treasury stock	(5,960	)		(2,334	)		—		
Retained earnings	12,231			15,646			17,506		
Accumulated other comprehensive loss	(18,009	)		(17,604	)		(17,207	)	
Total stockholders’ equity	42,544			49,189			52,958		
Total liabilities and stockholders' equity	$	352,279			$	296,888			$	293,258		

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

												
`	As Restated and Recast	
 	September 30, 2018	 	June 30, 2018	 	March 31, 2018	
 	(In thousands)	
Assets	 	 	 	 	 	
Current assets	 	 	 	 	 	
Cash and cash equivalents	$	1,567			$	1,393			$	1,784		
Trade receivables, net	112,309			76,132			79,358		
Inventory	155,744			138,721			132,749		
Prepaid expenses and other current assets	12,595			14,569			14,615		
Current assets of discontinued operations	32,185			30,704			29,086		
Total current assets	314,400			261,519			257,592		
Property, plant and equipment, net	20,988			19,088			17,643		
Goodwill	6,253			6,253			6,253		
Other intangible assets, net	4,864			5,209			5,555		
Deferred income taxes	7,704			8,877			10,419		
Deferred costs	10,153			9,825			10,187		
Other non-current assets	3,282			3,178			3,068		
Non-current assets of discontinued operations	5,313			5,688			5,661		
Total assets	$	372,957			$	319,637			$	316,378		
Liabilities and stockholders' equity						
Current liabilities						
Accounts payable	$	131,620			$	92,488			$	96,924		
Accounts payable to NACCO Industries, Inc.	2,480			2,769			7,814		
Revolving credit agreements	60,083			66,326			63,308		
Accrued compensation	15,421			11,984			9,238		
Accrued product returns	9,601			9,648			10,815		
Other current liabilities	22,488			15,769			21,227		
Current liabilities of discontinued operations	29,693			26,830			21,509		
Total current liabilities	271,386			225,814			230,835		
Revolving credit agreements	30,000			30,000			20,000		
Other long-term liabilities	22,343			21,654			21,831		
Non-current liabilities of discontinued operations	2,293			2,416			2,565		
Total liabilities	326,022			279,884			275,231		
Stockholders’ equity						
Class A Common stock	92			92			92		
Class B Common stock	45			45			45		
Capital in excess of par value	51,366			50,721			49,051		
Treasury stock	—			—			—		
Retained earnings	9,373			3,397			5,683		
Accumulated other comprehensive loss	(13,941	)		(14,502	)		(13,724	)	
Total stockholders’ equity	46,935			39,753			41,147		
Total liabilities and stockholders' equity	$	372,957			$	319,637			$	316,378		

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

The restatement corrections impact certain components within operating cash flows of the Consolidated Statements of Cash Flows. Total operating cash flows was unchanged, except for the impact of exchange rate changes resulting from the adjustments. Total investing activities, financing activities, and cash and cash equivalents are unchanged as a result of the restatements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

																						
	For the Year Ended December 31, 2019	
 	Class A common stock	Class B common stock	Capital in excess of par value (1)	Treasury stock	Retained earnings (1)	Accumulated other comprehensive income (loss) (1)	Total stockholders' equity (1)	
 	(In thousands, except per share data)	
Balance as Restated, January 1, 2019	$	93		$	44		$	51,714		$	—		$	22,068		$	(17,101	)	$	56,818		
Net loss	—		—		—		—		(3,385	)	—		(3,385	)	
Issuance of common stock, net of conversions	2		—		(1	)	—		—		—		1		
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		807		—		—		—		807		
Cash dividends, $0.085 per share	—		—		—		—		(1,177	)	—		(1,177	)	
Other comprehensive loss	—		—		—		—		—		(192	)	(192	)	
Reclassification adjustment to net loss	—		—		—		—		—		86		86		
Balance as Restated, March 31, 2019	$	95		$	44		$	52,520		$	—		$	17,506		$	(17,207	)	$	52,958		
Net loss	—		—		—		—		(618	)	—		(618	)	
Issuance of common stock, net of conversions	—		—		—		—		—		—		—		
Purchase of treasury stock	—		—		—		(2,334	)	—		—		(2,334	)	
Share-based compensation expense	—		—		822		—		—		—		822		
Cash dividends, $0.09 per share	—		—		—		—		(1,242	)	—		(1,242	)	
Other comprehensive loss	—		—		—		—		—		(643	)	(643	)	
Reclassification adjustment to net loss	—		—		—		—		—		246		246		
Balance as Restated, June 30, 2019	$	95		$	44		$	53,342		$	(2,334	)	$	15,646		$	(17,604	)	$	49,189		
Net loss	—		—		—		—		(2,200	)	—		(2,200	)	
Issuance of common stock, net of conversions	—		—		—		—		—		—		—		
Purchase of treasury stock	—		—		—		(3,626	)	—		—		(3,626	)	
Share-based compensation expense	—		—		801		—		—		—		801		
Cash dividends, $0.09 per share	—		—		—		—		(1,215	)	—		(1,215	)	
Other comprehensive loss	—		—		—		—		—		(654	)	(654	)	
Reclassification adjustment to net loss	—		—		—		—		—		249		249		
Balance as Restated, September 30, 2019	$	95		$	44		$	54,143		$	(5,960	)	$	12,231		$	(18,009	)	$	42,544		
Net loss	—		—		—		—		(7,304	)	—		(7,304	)	
Issuance of common stock, net of conversions	3		(3	)	(1	)	—		—		—		(1	)	
Purchase of treasury stock	—		—		—		—		—		—		—		
Share-based compensation expense	—		—		367		—		—		—		367		
Cash dividends, $0.09 per share	—		—		—		—		(1,217	)	—		(1,217	)	
Other comprehensive loss	—		—		—		—		—		1,761		1,761		
Reclassification adjustment to net loss	—		—		—		—		—		116		116		
Balance as Restated, December 31, 2019	$	98		$	41		$	54,509		$	(5,960	)	$	3,710		$	(16,132	)	$	36,266		

(1) As Restated. The restatement impacts on net income are described in the reconciliation of the consolidated statement of operations. The restatement impacts on other comprehensive loss are described in the reconciliation of the consolidated statement of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

comprehensive income (loss) for the corresponding periods of the year ended December 31, 2019. The quarter ended March 31, 2019 included a change to the reclassification adjustment to net loss of $0.1 million.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

																			
 	For the Year Ended December 31, 2018	
 	Class A common stock	Class B common stock	Capital in excess of par value	Retained earnings (1)	Accumulated other comprehensive income (loss) (1)	Total stockholders' equity (1)	
 	(In thousands, except per share data)	
Balance as Restated, January 1, 2018	$	88		$	48		$	47,773		$	7,860		$	(13,743	)	$	42,026		
Net loss	—		—		—		(2,183	)	—		(2,183	)	
Issuance of common stock, net of conversions	4		(3	)	323		—		—		324		
Share-based compensation expense	—		—		955		—		—		955		
Cash dividends, $0.085 per share	—		—		—		(1,162	)	—		(1,162	)	
Reclassification due to adoption of ASU 2018-02	—		—		—		1,168		(1,168	)	—		
Other comprehensive loss	—		—		—		—		863		863		
Reclassification adjustment to net loss	—		—		—		—		324		324		
Balance as Restated, March 31, 2018	$	92		$	45		$	49,051		$	5,683		$	(13,724	)	$	41,147		
Net loss	—		—		—		(1,121	)	—		(1,121	)	
Issuance of common stock, net of conversions	—		—		198		—		—		198		
Share-based compensation expense	—		—		1,472		—		—		1,472		
Cash dividends, $0.085 per share	—		—		—		(1,165	)	—		(1,165	)	
Other comprehensive loss	—		—		—		—		(961	)	(961	)	
Reclassification adjustment to net loss	—		—		—		—		183		183		
Balance as Restated, June 30, 2018	$	92		$	45		$	50,721		$	3,397		$	(14,502	)	$	39,753		
Net loss	—		—		—		7,141		—		7,141		
Issuance of common stock, net of conversions	—		—		246		—		—		246		
Share-based compensation expense	—		—		399				—		399		
Cash dividends, $0.085 per share	—		—		—		(1,165	)	—		(1,165	)	
Other comprehensive loss	—		—		—		—		548		548		
Reclassification adjustment to net loss	—		—		—		—		13		13		
Balance as Restated, September 30, 2018	$	92		$	45		$	51,366		$	9,373		$	(13,941	)	$	46,935		
Net loss	—		—		—		13,861		—		13,861		
Issuance of common stock, net of conversions	1		(1	)	(444	)	—		—		(444	)	
Share-based compensation expense	—		—		792		—		—		792		
Cash dividends, $0.085 per share	—		—		—		(1,166	)	—		(1,166	)	
Other comprehensive loss	—		—		—		—		(3,349	)	(3,349	)	
Reclassification adjustment to net loss	—		—		—		—		189		189		
Balance as Restated, December 31, 2018	$	93		$	44		$	51,714		$	22,068		$	(17,101	)	$	56,818		

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(1) As Restated. The restatement impacts on net income are described in the reconciliation of the consolidated statement of operations. The restatement impacts on other comprehensive loss are described in the reconciliation of the consolidated statement of comprehensive income (loss) for the corresponding periods of the year ended December 31, 2018.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

														
 	For the Three Months Ended December 31, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	
 	(In thousands)	
Revenue	$	207,085			$	(2,515	)		a,b,c,d		$	204,570		
Cost of sales	162,173			—					162,173		
Gross profit	44,912			(2,515	)				42,397		
Selling, general and administrative expenses	19,054			3,942			a,c,f		22,996		
Amortization of intangible assets	341			—					341		
Operating profit (loss)	25,517			(6,457	)				19,060		
Interest expense, net	767			—					767		
Other expense (income), net	(710	)		—					(710	)	
Income (loss) from continuing operations before income taxes	25,460			(6,457	)				19,003		
Income tax expense (benefit)	6,066			(367	)		e		5,699		
Net income (loss) from continuing operations	19,394			(6,090	)				13,304		
Loss from discontinued operations, net of tax	(20,608	)		—					(20,608	)	
Net income (loss)	$	(1,214	)		$	(6,090	)				$	(7,304	)	
 								
Basic and diluted earnings (loss) per share:											
Continuing operations	$	1.43			$	(0.45	)				$	0.98		
Discontinued operations	(1.52	)		—					(1.52	)	
Basic and diluted earnings (loss) per share	$	(0.09	)		$	(0.45	)				$	(0.54	)	
 											
Basic weighted average shares outstanding	13,518			—					13,518		
Diluted weighted average shares outstanding	13,625			—					13,625		

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to revenue of $0.4 million, and an increase to selling, general and administrative ("SG&A") expense of $3.7 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to revenue of $0.6 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in a decrease to revenue and a decrease to SG&A expense of $0.2 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in a decrease to revenue of $1.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to income tax expense of $0.4 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to SG&A expense of $0.5 million

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																				
 	For the Three Months Ended September 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	169,778			$	18			b,c		$	169,796		$	(20,288	)	$	149,508		
Cost of sales	129,194			—			 		129,194		(10,632	)	118,562		
Gross profit	40,584			18			 		40,602		(9,656	)	30,946		
Selling, general and administrative expenses	36,182			2,573			a,c,f		38,755		(12,590	)	26,165		
Amortization of intangible assets	345			—			 		345		—		345		
Operating profit (loss)	4,057			(2,552	)		 		1,505		2,934		4,439		
Interest expense, net	864			—			 		864		(108	)	756		
Other expense (income), net	688			—			 		688		(7	)	681		
Income (loss) from continuing operations before income taxes	2,505			(2,552	)		 		(47	)	3,049		3,002		
Income tax expense (benefit)	2,108			45			e		2,153		296		2,449		
Net income (loss) from continuing operations	397			(2,597	)		 		(2,200	)	2,753		553		
Loss from discontinued operations, net of tax	—			—			 		—		(2,753	)	(2,753	)	
Net income (loss)	$	397			$	(2,597	)		 		$	(2,200	)	$	—		$	(2,200	)	
 					 					
Basic and diluted earnings (loss) per share:							 								
Continuing operations	$	0.03			$	(0.19	)		 		$	(0.16	)	$	0.20		$	0.04		
Discontinued operations	—			—			 		—		(0.20	)	(0.20	)	
Basic and diluted earnings (loss) per share	$	0.03			$	(0.19	)		 		$	(0.16	)	$	—		$	(0.16	)	
 							 								
Basic weighted average shares outstanding	13,579			—			 		13,579		—		13,579		
Diluted weighted average shares outstanding	13,595			—			 		13,595		—		13,595		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $2.2 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to revenue of $0.5 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.5 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to SG&A expense of $0.1 million

F-70

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

	
																				
 	For the Nine Months Ended September 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	463,582			$	1,458			b,c,f		$	465,040		$	(57,824	)	$	407,216		
Cost of sales	352,618			(65	)		f		352,553		(31,493	)	321,060		
Gross profit	110,964			1,522			 		112,486		(26,331	)	86,155		
Selling, general and administrative expenses	108,306			5,137			a,c,f		113,443		(36,058	)	77,385		
Amortization of intangible assets	1,036			—			 		1,036		—		1,036		
Operating profit (loss)	1,622			(3,615	)		 		(1,993	)	9,727		7,734		
Interest expense, net	2,514			—			 		2,514		(306	)	2,208		
Other expense (income), net	230			144			f		374		(22	)	352		
Income (loss) from continuing operations before income taxes	(1,122	)		(3,759	)		 		(4,881	)	10,055		5,174		
Income tax expense (benefit)	1,186			136			e		1,322		2,063		3,385		
Net income (loss) from continuing operations	(2,308	)		(3,895	)		 		(6,203	)	7,992		1,789		
Loss from discontinued operations, net of tax	—			—			 		—		(7,992	)	(7,992	)	
Net income (loss)	$	(2,308	)		$	(3,895	)		 		$	(6,203	)	$	—		$	(6,203	)	
 					 					
Basic and diluted earnings (loss) per share:							 								
Continuing operations	$	(0.17	)		$	(0.28	)		 		$	(0.45	)	$	0.58		$	0.13		
Discontinued operations	—			—			 		—		(0.58	)	(0.58	)	
Basic and diluted earnings (loss) per share	$	(0.17	)		$	(0.28	)		 		$	(0.45	)	$	—		$	(0.45	)	
 							 								
Basic weighted average shares outstanding	13,726			—			 		13,726		—		13,726		
Diluted weighted average shares outstanding	13,726			—			 		13,726		5		13,731		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $3.3 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to revenue of $0.5 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $1.8 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.2 million, a decrease to cost of sales of $0.1 million, and an increase to other expense of $0.1 million.

F-71

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																				
 	For the Three Months Ended June 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	148,427			$	921			c		$	149,348		$	(18,283	)	$	131,065		
Cost of sales	112,770			—			 		112,770		(10,212	)	102,558		
Gross profit	35,657			921			 		36,578		(8,071	)	28,507		
Selling, general and administrative expenses	35,617			594			a,c		36,211		(11,235	)	24,976		
Amortization of intangible assets	346			—			 		346		—		346		
Operating profit (loss)	(306	)		327			 		21		3,164		3,185		
Interest expense, net	904			—			 		904		(115	)	789		
Other expense (income), net	(126	)		—			 		(126	)	(6	)	(132	)	
Income (loss) from continuing operations before income taxes	(1,084	)		327			 		(757	)	3,285		2,528		
Income tax expense	(140	)		1					(139	)	769		630		
Net income (loss) from continuing operations	(944	)		326			 		(618	)	2,516		1,898		
Loss from discontinued operations, net of tax	—			—			 		—		(2,516	)	(2,516	)	
Net income (loss)	$	(944	)		$	326			 		$	(618	)	$	—		$	(618	)	
 					 					
Basic and diluted earnings (loss) per share:							 								
Continuing operations	$	(0.07	)		$	0.03			 		$	(0.04	)	$	0.18		$	0.14		
Discontinued operations	—			—			 		—		(0.18	)	(0.18	)	
Basic and diluted earnings (loss) per share	$	(0.07	)		$	0.02			 		$	(0.05	)	$	—		$	(0.04	)	
 							 								
Basic weighted average shares outstanding	13,813			—			 		13,813		—		13,813		
Diluted weighted average shares outstanding	13,813			—			 		13,813		13		13,826		

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to selling, general and administrative ("SG&A") expense of $0.3 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.9 million

F-72

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

	
																				
 	For the Six Months Ended June 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	293,804			$	1,439			c,f		$	295,243		$	(37,536	)	$	257,707		
Cost of sales	223,424			(65	)		f		223,359		(20,861	)	202,498		
Gross profit	70,380			1,504			 		71,884		(16,675	)	55,209		
Selling, general and administrative expenses	72,124			2,566			a,c,f		74,690		(23,468	)	51,222		
Amortization of intangible assets	691			—			 		691		—		691		
Operating profit (loss)	(2,435	)		(1,062	)		 		(3,497	)	6,793		3,296		
Interest expense, net	1,650			—			 		1,650		(198	)	1,452		
Other expense (income), net	(458	)		144			f		(314	)	(15	)	(329	)	
Income (loss) from continuing operations before income taxes	(3,627	)		(1,206	)		 		(4,833	)	7,006		2,173		
Income tax expense (benefit)	(922	)		92			e		(830	)	1,767		937		
Net income (loss) from continuing operations	(2,705	)		(1,298	)		 		(4,003	)	5,239		1,236		
Loss from discontinued operations, net of tax	—			—			 		—		(5,239	)	(5,239	)	
Net loss	$	(2,705	)		$	(1,298	)		 		$	(4,003	)	$	—		$	(4,003	)	
 					 					
Basic and diluted earnings (loss) per share:							 								
Continuing operations	$	(0.20	)		$	(0.09	)		 		$	(0.29	)	$	0.38		$	0.09		
Discontinued operations	—			—			 		—		(0.38	)	(0.38	)	
Basic and diluted earnings (loss) per share	$	(0.20	)		$	(0.09	)		 		$	(0.29	)	$	—		$	(0.29	)	
 							 								
Basic weighted average shares outstanding	13,800			—			 		13,800		—		13,800		
Diluted weighted average shares outstanding	13,800			—			 		13,800		13		13,813		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $1.1 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $1.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.1 million, a decrease to cost of sales of $0.1 million, an increase to SG&A of $0.2 million, and an increase to other expense of $0.1 million

F-73

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																				
 	For the Three Months Ended March 31, 2019	
	As Previously Reported		Restatement Impacts		Restatement References		As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	145,377			$	518			c,f		$	145,895		$	(19,253	)	$	126,642		
Cost of sales	110,654			(65	)		f		110,589		(10,649	)	99,940		
Gross profit	34,723			583					35,306		(8,604	)	26,702		
Selling, general and administrative expenses	36,507			1,972			a,c,f		38,479		(12,233	)	26,246		
Amortization of intangible assets	345			—					345		—		345		
Operating profit (loss)	(2,129	)		(1,389	)				(3,518	)	3,629		111		
Interest expense, net	746			—					746		(83	)	663		
Other expense (income), net	(332	)		144			f		(188	)	(9	)	(197	)	
Income (loss) from continuing operations before income taxes	(2,543	)		(1,533	)				(4,076	)	3,721		(355	)	
Income tax expense (benefit)	(782	)		91			e		(691	)	998		307		
Net income (loss) from continuing operations	(1,761	)		(1,624	)				(3,385	)	2,723		(662	)	
Loss from discontinued operations, net of tax	—			—					—		(2,723	)	(2,723	)	
Net loss	$	(1,761	)		$	(1,624	)				$	(3,385	)	$	—		$	(3,385	)	
										
Basic and diluted earnings (loss) per share:															
Continuing operations	$	(0.13	)		$	(0.12	)				$	(0.25	)	$	0.20		$	(0.05	)	
Discontinued operations	—			—					—		(0.20	)	(0.20	)	
Basic and diluted earnings (loss) per share	$	(0.13	)		$	(0.12	)				$	(0.25	)	$	—		$	(0.25	)	
															
Basic weighted average shares outstanding	13,786			—					13,786		—		13,786		
Diluted weighted average shares outstanding	13,786			—					13,786		—		13,786		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $1.4 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.4 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.1 million, a decrease to cost of sales of $0.1 million, an increase to SG&A expense of $0.2 million, and an increase in other expense of $0.1 million

F-74

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

														
 	For the Three Months Ended December 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	
 	(In thousands, except per share data)	
Revenue	$	198,981			$	(815	)		c,f		$	198,166		
Cost of sales	157,419			(1,246	)		f		156,173		
Gross profit	41,562			431					41,993		
Selling, general and administrative expenses	23,677			1,922			a,c,f		25,599		
Amortization of intangible assets	345			—					345		
Operating profit	17,540			(1,490	)				16,050		
Interest expense, net	711			—					711		
Other expense (income), net	573			(144	)		f		429		
Income from continuing operations before income taxes	16,256			(1,346	)				14,910		
Income tax expense	3,595			(175	)		e		3,420		
Net income from continuing operations	12,661			(1,171	)				11,490		
Loss from discontinued operations, net of tax	2,371			—					2,371		
Net income (loss)	$	15,032			$	(1,171	)				$	13,861		
 								
Basic and diluted earnings (loss) per share:											
Continuing operations	$	0.93			$	(0.09	)				$	0.84		
Discontinued operations	0.17			—					0.17		
Basic and diluted earnings (loss) per share	$	1.10			$	(0.09	)				$	1.01		
 											
Basic weighted average shares outstanding	13,714			—					13,714		
Diluted weighted average shares outstanding	13,844			—					13,844		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $1.4 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.6 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to income tax expense of $0.2 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to revenue of $1.4 million, a decrease to cost of sales of $1.2 million, and a decrease in other income of $0.1 million

F-75

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																				
 	For the Three Months Ended September 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	196,901			$	284			c		$	197,185		$	(25,884	)	$	171,301		
Cost of sales	146,550			—					146,550		(13,653	)	132,897		
Gross profit	50,351			284					50,635		(12,231	)	38,404		
Selling, general and administrative expenses	39,211			1,496			a,c		40,707		(14,411	)	26,296		
Amortization of intangible assets	345			—					345		—		345		
Operating profit	10,795			(1,212	)				9,583		2,180		11,763		
Interest expense, net	1,001			—					1,001		(115	)	886		
Other expense (income), net	(426	)		—					(426	)	(7	)	(433	)	
Income from continuing operations before income taxes	10,220			(1,212	)				9,008		2,302		11,310		
Income tax expense	2,176			(309	)		e		1,867		413		2,280		
Net income from continuing operations	8,044			(903	)				7,141		1,889		9,030		
Loss from discontinued operations, net of tax	—			—					—		(1,889	)	(1,889	)	
Net income (loss)	$	8,044			$	(903	)				$	7,141		$	—		$	7,141		
 										
Basic and diluted earnings (loss) per share:															
Continuing operations	$	0.59			$	(0.07	)				$	0.52		$	0.14		$	0.66		
Discontinued operations	—			—					—		(0.14	)	(0.14	)	
Basic and diluted earnings (loss) per share	$	0.59			$	(0.07	)				$	0.52		$	—		$	0.52		
 															
Basic weighted average shares outstanding	13,704			—					13,704		—		13,704		
Diluted weighted average shares outstanding	13,713			—					13,713		—		13,713		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $1.2 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to income tax expense of $0.3 million

F-76

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

	
																				
 	For the Nine Months Ended September 30, 2018	 	 	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	501,475			$	1,187			c.f		$	502,662		$	(70,746	)	$	431,916		
Cost of sales	372,478			81			f		372,559		(37,702	)	334,857		
Gross profit	128,997			1,106					130,103		(33,044	)	97,059		
Selling, general and administrative expenses	117,328			4,235			a,c,f		121,563		(43,041	)	78,522		
Amortization of intangible assets	1,036			—					1,036		—		1,036		
Operating profit	10,633			(3,129	)				7,504		9,997		17,501		
Interest expense, net	2,422			—					2,422		(217	)	2,205		
Other expense (income), net	(253	)		—					(253	)	(27	)	(280	)	
Income from continuing operations before income taxes	8,464			(3,129	)				5,335		10,241		15,576		
Income tax expense	1,712			(214	)		e		1,498		2,509		4,007		
Net income from continuing operations	6,752			(2,915	)				3,837		7,732		11,569		
Loss from discontinued operations, net of tax	—			—					—		(7,732	)	(7,732	)	
Net income (loss)	$	6,752			$	(2,915	)				$	3,837		$	—		$	3,837		
 										
Basic and diluted earnings (loss) per share:															
Continuing operations	$	0.49			$	(0.21	)				$	0.28		$	0.56		$	0.84		
Discontinued operations	—			—					—		(0.56	)	(0.56	)	
Basic and diluted earnings (loss) per share	$	0.49			$	(0.21	)				$	0.28		$	—		$	0.28		
 															
Basic weighted average shares outstanding	13,694			—					13,694		—		13,694		
Diluted weighted average shares outstanding	13,697			—					13,697		—		13,697		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $3.5 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.9 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to income tax expense of $0.2 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.3 million, an increase to cost of sales of $0.1 million, and a decrease to SG&A of $0.2 million

F-77

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																				
 	For the Three Months Ended June 30, 2018	 	 	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	157,941			$	404			c		$	158,345		$	(22,762	)	$	135,583		
Cost of sales	117,088			—					117,088		(12,232	)	104,856		
Gross profit	40,853			404					41,257		(10,530	)	30,727		
Selling, general and administrative expenses	40,123			525			a,c,f		40,648		(14,211	)	26,437		
Amortization of intangible assets	346			—					346		—		346		
Operating profit	384			(121	)				263		3,681		3,944		
Interest expense, net	889			—					889		(80	)	809		
Other expense (income), net	687			—					687		(8	)	679		
Income from continuing operations before income taxes	(1,192	)		(121	)				(1,313	)	3,769		2,456		
Income tax expense	(318	)		126			e		(192	)	1,003		811		
Net income from continuing operations	(874	)		(247	)				(1,121	)	2,766		1,645		
Loss from discontinued operations, net of tax	—			—					—		(2,766	)	(2,766	)	
Net income (loss)	$	(874	)		$	(247	)				$	(1,121	)	$	—		$	(1,121	)	
 										
Basic and diluted earnings (loss) per share:															
Continuing operations	$	(0.06	)		$	(0.02	)				$	(0.08	)	$	0.20		$	0.12		
Discontinued operations	—			—					—		(0.20	)	(0.20	)	
Basic and diluted earnings (loss) per share	$	(0.06	)		$	(0.02	)				$	(0.08	)	$	—		$	(0.08	)	
 															
Basic weighted average shares outstanding	13,695			—					13,695		—		13,695		
Diluted weighted average shares outstanding	13,695			—					13,695		9		13,704		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $0.5 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.4 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to SG&A of $0.4 million

F-78

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

	
																				
 	For the Six Months Ended June 30, 2018	 	 	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	304,574			$	903			c,f		$	305,477		$	(44,862	)	$	260,615		
Cost of sales	225,928			81			f		226,009		(24,049	)	201,960		
Gross profit	78,646			822					79,468		(20,813	)	58,655		
Selling, general and administrative expenses	78,117			2,738			a,c,f		80,855		(28,630	)	52,225		
Amortization of intangible assets	691			—					691		—		691		
Operating profit	(162	)		(1,917	)				(2,079	)	7,817		5,738		
Interest expense, net	1,421			—					1,421		(102	)	1,319		
Other expense (income), net	173			—					173		(20	)	153		
Income from continuing operations before income taxes	(1,756	)		(1,917	)				(3,673	)	7,939		4,266		
Income tax expense	(464	)		95			e		(369	)	2,096		1,727		
Net income from continuing operations	(1,292	)		(2,012	)				(3,304	)	5,843		2,539		
Loss from discontinued operations, net of tax	—			—					—		(5,843	)	(5,843	)	
Net income (loss)	$	(1,292	)		$	(2,012	)				$	(3,304	)	$	—		$	(3,304	)	
 												
Basic and diluted earnings (loss) per share:																
Continuing operations	$	(0.09	)		$	(0.15	)				$	(0.24	)	$	0.43		$	0.19		
Discontinued operations	—			—					—		(0.43	)	(0.43	)	
Basic and diluted earnings (loss) per share	$	(0.09	)		$	(0.15	)				$	(0.24	)	$	—		$	(0.24	)	
 																
Basic weighted average shares outstanding	13,689			—					13,689		—		13,689		
Diluted weighted average shares outstanding	13,689			—					13,689		4		13,693		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $2.3 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.6 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to income tax expense of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.3 million, an increase to cost of sales of $0.1 million, and a decrease to SG&A of $0.2 million

F-79

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

																				
 	For the Three Months Ended March 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement References	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Revenue	$	146,633			$	499			c,f		$	147,132		$	(22,100	)	$	125,032		
Cost of sales	108,840			81			f		108,921		(11,817	)	97,104		
Gross profit	37,793			418					38,211		(10,283	)	27,928		
Selling, general and administrative expenses	37,994			2,214			a,c,f		40,208		(14,419	)	25,789		
Amortization of intangible assets	345			—					345		—		345		
Operating profit	(546	)		(1,796	)				(2,342	)	4,136		1,794		
Interest expense, net	532			—					532		(22	)	510		
Other expense (income), net	(514	)		—					(514	)	(12	)	(526	)	
Income from continuing operations before income taxes	(564	)		(1,796	)				(2,360	)	4,170		1,810		
Income tax expense	(146	)		(31	)				(177	)	1,093		916		
Net income from continuing operations	(418	)		(1,765	)				(2,183	)	3,077		894		
Loss from discontinued operations, net of tax	—			—					—		(3,077	)	(3,077	)	
Net income (loss)	$	(418	)		$	(1,765	)				$	(2,183	)	$	—		$	(2,183	)	
 										
Basic and diluted earnings (loss) per share:															
Continuing operations	$	(0.03	)		$	(0.12	)				$	(0.15	)	$	0.22		$	0.07		
Discontinued operations	—			—					—		(0.22	)	(0.22	)	
Basic and diluted earnings (loss) per share	$	(0.03	)		$	(0.12	)				$	(0.15	)	$	—		$	(0.15	)	
 															
Basic weighted average shares outstanding	13,683			—					13,683		—		13,683		
Diluted weighted average shares outstanding	13,683			—					13,683		9		13,692		

(a) Write-off of Assets: The correction of these misstatements resulted in an increase to selling, general and administrative ("SG&A") expense of $1.7 million
(c) Correction of misclassification of Selling and Marketing Expenses: The correction of these misstatements resulted in an increase to revenue and an increase to SG&A expense of $0.2 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to revenue of $0.3 million, and increase to cost of sales of $0.1 million, an increase to SG&A of $0.3 million

F-80

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended December 31, 2019	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(1,214	)		$	(6,090	)		$	(7,304	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	857			(656	)		201		
(Loss) gain on long-term intra-entity foreign currency transactions	294			—			294		
Cash flow hedging activity	(143	)		—			(143	)	
Reclassification of hedging activities into earnings	81			—			81		
Pension plan adjustment	1,410			—			1,410		
Reclassification of pension adjustments into earnings	35			—			35		
Total other comprehensive loss, net of tax	2,534			(656	)		1,878		
Comprehensive income (loss)	$	1,320			$	(6,746	)		$	(5,426	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended December 31, 2019 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

F-81

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended September 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	397			$	(2,597	)		$	(2,200	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	(312	)		294			(18	)	
(Loss) gain on long-term intra-entity foreign currency transactions	(509	)		—			(509	)	
Cash flow hedging activity	(127	)		—			(127	)	
Reclassification of hedging activities into earnings	122			—			122		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	127			—			127		
Total other comprehensive loss, net of tax	(699	)		294			(405	)	
Comprehensive income (loss)	$	(302	)		$	(2,303	)		$	(2,605	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended September 30, 2019 section above.
The increase to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

	
												
 	For the Nine Months Ended September 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(2,308	)		$	(3,895	)		$	(6,203	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	244			65			309		
(Loss) gain on long-term intra-entity foreign currency transactions	(373	)		—			(373	)	
Cash flow hedging activity	(1,570	)		144			(1,426	)	
Reclassification of hedging activities into earnings	268			—			268		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	219			94			313		
Total other comprehensive loss, net of tax	(1,212	)		303			(909	)	
Comprehensive income (loss)	$	(3,520	)		$	(3,592	)		$	(7,112	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the nine months ended September 30, 2019 section above.
The increase to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.
The increases to cash flow hedging and the reclassification of pension adjustments are from the correction of other immaterial errors.

F-82

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended June 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(944	)		$	326			$	(618	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	226			(113	)		113		
(Loss) gain on long-term intra-entity foreign currency transactions	121			—			121		
Cash flow hedging activity	(877	)		—			(877	)	
Reclassification of hedging activities into earnings	144			—			144		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	102			—			102		
Total other comprehensive loss, net of tax	(284	)		(113	)		(397	)	
Comprehensive income (loss)	$	(1,228	)		$	213			$	(1,015	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended June 30, 2019 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.
The increases to the reclassification of pension adjustments are from the correction of other immaterial errors.

	
												
 	For the Six Months Ended June 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(2,705	)		$	(1,298	)		$	(4,003	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	556			(229	)		327		
(Loss) gain on long-term intra-entity foreign currency transactions	136			—			136		
Cash flow hedging activity	(1,443	)		144			(1,299	)	
Reclassification of hedging activities into earnings	146			—			146		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	92			94			186		
Total other comprehensive loss, net of tax	(513	)		9			(504	)	
Comprehensive income (loss)	$	(3,218	)		$	(1,289	)		$	(4,507	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the six months ended June 30, 2019 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets and timing of recognition of customer pricing concessions categories.
The increase to cash flow hedging and the reclassification of pension adjustments is from the correction of other immaterial errors.

F-83

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended March 31, 2019	
	As Previously Reported		Restatement Impacts		As Restated	
 	(In thousands)	
Net income (loss)	$	(1,761	)		$	(1,624	)		$	(3,385	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	330			(116	)		214		
(Loss) gain on long-term intra-entity foreign currency transactions	15			—			15		
Cash flow hedging activity	(566	)		144			(422	)	
Reclassification of hedging activities into earnings	2			—			2		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	(10	)		94			84		
Total other comprehensive loss, net of tax	(229	)		122			(107	)	
Comprehensive income (loss)	$	(1,990	)		$	(1,502	)		$	(3,492	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended March 31, 2019 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.
The increase to cash flow hedging is from the correction of other immaterial errors.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended December 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	15,032			$	(1,171	)		$	13,861		
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	(1,441	)		306			(1,135	)	
(Loss) gain on long-term intra-entity foreign currency transactions	60			—			60		
Cash flow hedging activity	(208	)		(144	)		(352	)	
Reclassification of hedging activities into earnings	48			—			48		
Pension plan adjustment	(1,920	)		—			(1,920	)	
Reclassification of pension adjustments into earnings	235			(94	)		141		
Total other comprehensive loss, net of tax	(3,226	)		68			(3,158	)	
Comprehensive income (loss)	$	11,806			$	(1,103	)		$	10,703		

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended December 31, 2018 section above.
The increase to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.
The decrease to cash flow hedging and the reclassification of pension adjustments are from the correction of other immaterial errors.

F-84

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended September 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	8,044			$	(903	)		$	7,141		
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	1,257			(355	)		902		
(Loss) gain on long-term intra-entity foreign currency transactions	(53	)		—			(53	)	
Cash flow hedging activity	(301	)		—			(301	)	
Reclassification of hedging activities into earnings	(102	)		—			(102	)	
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	115			—			115		
Total other comprehensive loss, net of tax	916			(355	)		561		
Comprehensive income (loss)	$	8,960			$	(1,258	)		$	7,702		

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended September 30, 2018 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

	
												
 	For the Nine Months Ended September 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	6,752			$	(2,915	)		$	3,837		
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	1,282			(219	)		1,063		
(Loss) gain on long-term intra-entity foreign currency transactions	(1,066	)		—			(1,066	)	
Cash flow hedging activity	452			—			452		
Reclassification of hedging activities into earnings	105			—			105		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	415			—			415		
Total other comprehensive loss, net of tax	1,188			(219	)		969		
Comprehensive income (loss)	$	7,940			$	(3,135	)		$	4,805		

See description of the net income (loss) impacts in the consolidated statement of operations for the nine months ended September 30, 2018 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

F-85

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended June 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(874	)		$	(247	)		$	(1,121	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	(892	)		480			(412	)	
(Loss) gain on long-term intra-entity foreign currency transactions	(1,013	)		—			(1,013	)	
Cash flow hedging activity	464			—			464		
Reclassification of hedging activities into earnings	41			—			41		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	142			—			142		
Total other comprehensive loss, net of tax	(1,258	)		480			(778	)	
Comprehensive income (loss)	$	(2,132	)		$	233			$	(1,899	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended June 30, 2018 section above.
The increase to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

	
												
 	For the Six Months Ended June 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(1,292	)		$	(2,012	)		$	(3,304	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	25			136			161		
(Loss) gain on long-term intra-entity foreign currency transactions	(1,013	)		—			(1,013	)	
Cash flow hedging activity	753			—			753		
Reclassification of hedging activities into earnings	207			—			207		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	300			—			300		
Total other comprehensive loss, net of tax	272			136			408		
Comprehensive income (loss)	$	(1,020	)		$	(1,876	)		$	(2,896	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the six months ended June 30, 2018 section above.
The increase to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

F-86

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

												
 	For the Three Months Ended March 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	As Restated	
 	(In thousands)	
Net income (loss)	$	(418	)		$	(1,765	)		$	(2,183	)	
Other comprehensive income (loss), net of tax:									
Foreign currency translation adjustment	917			(344	)		573		
(Loss) gain on long-term intra-entity foreign currency transactions	—			—			—		
Cash flow hedging activity	289			—			289		
Reclassification of hedging activities into earnings	166			—			166		
Pension plan adjustment	—			—			—		
Reclassification of pension adjustments into earnings	158			—			158		
Total other comprehensive loss, net of tax	1,530			(344	)		1,186		
Comprehensive income (loss)	$	1,112			$	(2,109	)		$	(997	)	

See description of the net income (loss) impacts in the consolidated statement of operations for the three months ended March 31, 2018 section above.
The decrease to foreign currency translation adjustments is the result of the translation impacts of restatements in the write-off of assets, reversal of revenue and timing of recognition of customer pricing concessions categories.

F-87

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

																				
`	September 30, 2019	
 	As Previously Reported	 	Restatement Impacts	 	Restatement Reference	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Assets	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	1,866			$	—					$	1,866		$	(307	)	$	1,559		
Trade receivables, net	106,135			(2,179	)		a,b		103,956		(865	)	103,091		
Inventory	181,847			—					181,847		(20,804	)	161,043		
Prepaid expenses and other current assets	22,445			(7,505	)		a,b		14,940		(854	)	14,086		
Current assets of discontinued operations	—			—					—		22,830		22,830		
Total current assets	312,293			(9,684	)				302,609		—		302,609		
Property, plant and equipment, net	22,653			—					22,653		(460	)	22,193		
Goodwill	6,253			—					6,253		—		6,253		
Other intangible assets, net	3,483			—					3,483		—		3,483		
Deferred income taxes	6,161			634			e		6,795		(1,155	)	5,640		
Deferred costs	8,925			—					8,925		(121	)	8,804		
Other non-current assets	1,561			—					1,561		(8	)	1,553		
Non-current assets of discontinued operations	—			—					—		1,744		1,744		
Total assets	$	361,329			$	(9,050	)				$	352,279		$	—		$	352,279		
Liabilities and stockholders' equity										
Current liabilities										
Accounts payable	$	147,206			$	16					$	147,222		$	(7,211	)	$	140,011		
Accounts payable to NACCO Industries, Inc.	220			—					220		—		220		
Revolving credit agreements	59,702			—					59,702		(9,550	)	50,152		
Accrued compensation	15,568			389			f		15,957		(1,307	)	14,650		
Accrued product returns	8,266			—					8,266		—		8,266		
Other current liabilities	30,651			1,874			a,d,e		32,525		(6,645	)	25,880		
Current liabilities of discontinued operations	—			—					—		24,713		24,713		
Total current liabilities	261,613			2,279					263,892		—		263,892		
Revolving credit agreements	30,000			—					30,000		—		30,000		
Other long-term liabilities	14,961			882			e		15,843		(1,585	)	14,258		
Non-current liabilities of discontinued operations	—			—					—		1,585		1,585		
Total liabilities	306,574			3,161					309,735		—		309,735		
Stockholders’ equity										
Class A Common stock	95			—					95		—		95		
Class B Common stock	44			—					44		—		44		
Capital in excess of par value	54,143			—					54,143		—		54,143		
Treasury stock	(5,960	)		—					(5,960	)	—		(5,960	)	
Retained earnings	24,955			(12,724	)		a,b,c,d,e,f		12,231		—		12,231		
Accumulated other comprehensive loss	(18,522	)		513			a,b,d		(18,009	)	—		(18,009	)	
Total stockholders’ equity	54,755			(12,211	)				42,544		—		42,544		
Total liabilities and stockholders' equity	$	361,329			$	(9,050	)				$	352,279		$	—		$	352,279		

F-88

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $1.6 million, a reduction to prepaid expenses and other current assets of $7.6 million, and an increase to other current liabilities of $2.1 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to trade receivables of $0.6 million and an increase to prepaid expenses and other current assets of $0.1 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.2 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $0.6 million, a decrease to other current liabilities of $0.4 million, and an increase to other long-term liabilities of $0.9 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to accrued compensation of $0.4 million

F-89

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

																				
`	June 30, 2019	 	 	
 	As Previously Reported	 	Restatement Impacts	 	Restatement Reference	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Assets	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	1,131			$	—					$	1,131		$	(102	)	$	1,029		
Trade receivables, net	89,579			(2,446	)		a,f		87,133		(865	)	86,268		
Inventory	140,817			—					140,817		(19,345	)	121,472		
Prepaid expenses and other current assets	24,078			(6,723	)		a		17,355		(943	)	16,412		
Current assets of discontinued operations	—			—					—		21,255		21,255		
Total current assets	255,605			(9,169	)				246,436		—		246,436		
Property, plant and equipment, net	23,204			—					23,204		(1,555	)	21,649		
Goodwill	6,253			—					6,253		—		6,253		
Other intangible assets, net	3,828			—					3,828		—		3,828		
Deferred income taxes	6,169			318			e		6,487		(2,733	)	3,754		
Deferred costs	8,683			—					8,683		(119	)	8,564		
Other non-current assets	1,997			—					1,997		(13	)	1,984		
Non-current assets of discontinued operations	—			—					—		4,420		4,420		
Total assets	$	305,739			$	(8,851	)				$	296,888		$	—		$	296,888		
Liabilities and stockholders' equity										
Current liabilities										
Accounts payable	$	91,737			$	—					$	91,737		$	(5,538	)	$	86,199		
Accounts payable to NACCO Industries, Inc.	220			—					220		—		220		
Revolving credit agreements	58,955			—					58,955		(7,450	)	51,505		
Accrued compensation	12,091			387			f		12,478		(753	)	11,725		
Accrued product returns	8,224			—					8,224		—		8,224		
Other current liabilities	27,930			(241	)		a,d,e,f		27,689		(6,307	)	21,382		
Current liabilities of discontinued operations	—			—					—		20,048		20,048		
Total current liabilities	199,157			146					199,303		—		199,303		
Revolving credit agreements	32,000			—					32,000		(2,000	)	30,000		
Other long-term liabilities	15,485			911			e		16,396		(1,697	)	14,699		
Non-current liabilities of discontinued operations	—			—					—		3,697		3,697		
Total liabilities	246,642			1,057					247,699		—		247,699		
Stockholders’ equity										
Class A Common stock	95			—					95		—		95		
Class B Common stock	44			—					44		—		44		
Capital in excess of par value	53,342			—					53,342		—		53,342		
Treasury stock	(2,334	)		—					(2,334	)	—		(2,334	)	
Retained earnings	25,773			(10,127	)		a,d,e,f		15,646		—		15,646		
Accumulated other comprehensive loss	(17,823	)		219			a,d		(17,604	)	—		(17,604	)	
Total stockholders’ equity	59,097			(9,908	)				49,189		—		49,189		
Total liabilities and stockholders' equity	$	305,739			$	(8,851	)				$	296,888		$	—		$	296,888		

F-90

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $1.3 million, a reduction to prepaid expenses and other current assets of $6.7 million, and an increase in other current liabilities of $1.4 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.2 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $0.3 million, a decrease to other current liabilities of $0.4 million, and an increase to other long-term liabilities of $0.9 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to trade receivables of $1.1 million, an increase to accrued compensation of $0.4 million, and a decrease to other current liabilities of $1.4 million

F-91

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

																				
`	March 31, 2019			
 	As Previously Reported		Restatement Impacts		Restatement Reference		As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Assets	 		 							
Current assets	 		 							
Cash and cash equivalents	$	1,721			$	—					$	1,721		$	(85	)	$	1,636		
Trade receivables, net	92,534			(2,768	)		a,f		89,766		(10,664	)	79,102		
Inventory	142,261			—					142,261		(21,554	)	120,707		
Prepaid expenses and other current assets	16,373			(6,605	)		a		9,768		7,611		17,379		
Current assets of discontinued operations	—			—					—		24,692		24,692		
Total current assets	252,889			(9,373	)				243,516		—		243,516		
Property, plant and equipment, net	22,566			—					22,566		(1,582	)	20,984		
Goodwill	6,253			—					6,253		—		6,253		
Other intangible assets, net	4,174			—					4,174		—		4,174		
Deferred income taxes	5,493			385			e		5,878		(2,712	)	3,166		
Deferred costs	8,447			—					8,447		(131	)	8,316		
Other non-current assets	2,424			—					2,424		(21	)	2,403		
Non-current assets of discontinued operations	—			—					—		4,446		4,446		
Total assets	$	302,246			$	(8,988	)				$	293,258		$	—		$	293,258		
Liabilities and stockholders' equity										
Current liabilities										
Accounts payable	$	80,649			$	—					$	80,649		$	(6,929	)	$	73,720		
Accounts payable to NACCO Industries, Inc.	2,425			—					2,425		—		2,425		
Revolving credit agreements	62,212			—					62,212		(7,400	)	54,812		
Accrued compensation	8,903			370			f		9,273		(875	)	8,398		
Accrued product returns	9,314			—					9,314		—		9,314		
Other current liabilities	24,109			(135	)		a,d,e,f		23,974		(6,269	)	17,705		
Current liabilities of discontinued operations	—			—					—		21,473		21,473		
Total current liabilities	187,612			235					187,847		—		187,847		
Revolving credit agreements	32,000			—					32,000		(2,000	)	30,000		
Other long-term liabilities	19,555			898			e		20,453		(1,834	)	18,619		
Non-current liabilities of discontinued operations	—			—					—		3,834		3,834		
Total liabilities	239,167			1,133					240,300		—		240,300		
Stockholders’ equity										
Class A Common stock	95			—					95		—		95		
Class B Common stock	44			—					44		—		44		
Capital in excess of par value	52,520			—					52,520		—		52,520		
Retained earnings	27,959			(10,453	)		a,d,e,f		17,506		—		17,506		
Accumulated other comprehensive loss	(17,539	)		332			a,d		(17,207	)	—		(17,207	)	
Total stockholders’ equity	63,079			(10,121	)				52,958		—		52,958		
Total liabilities and stockholders' equity	$	302,246			$	(8,988	)				$	293,258		$	—		$	293,258		

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $1.6 million, a reduction to prepaid expenses and other current assets of $6.6 million, and an increase to other current liabilities of $1.4 million

F-92

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.2 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in a decrease to other current assets of $0.1 million, an increase to deferred income taxes of $0.4 million, a decrease to other current liabilities of $0.3 million, and an increase to other long-term liabilities of $0.9 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in a decrease to trade receivables of $1.1 million, an increase to accrued compensation of $0.4 million and a decrease to other current liabilities of $1.4 million

F-93

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

																				
`	September 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement Reference	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Assets	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	2,139			$	—					$	2,139		$	(572	)	$	1,567		
Trade receivables, net	113,683			(351	)		a		113,332		(1,023	)	112,309		
Inventory	183,831			—					183,831		(28,087	)	155,744		
Prepaid expenses and other current assets	20,766			(5,668	)		a		15,098		(2,503	)	12,595		
Current assets of discontinued operations	—			—					—		32,185		32,185		
Total current assets	320,419			(6,019	)				314,400		—		314,400		
Property, plant and equipment, net	23,309			—					23,309		(2,321	)	20,988		
Goodwill	6,253			—					6,253		—		6,253		
Other intangible assets, net	4,864			—					4,864		—		4,864		
Deferred income taxes	10,450			53			e		10,503		(2,799	)	7,704		
Deferred costs	10,306			—					10,306		(153	)	10,153		
Other non-current assets	3,322			—					3,322		(40	)	3,282		
Non-current assets of discontinued operations	—			—					—		5,313		5,313		
Total assets	$	378,923			$	(5,966	)				$	372,957		$	—		$	372,957		
Liabilities and stockholders' equity										
Current liabilities										
Accounts payable	$	143,955			$	—					$	143,955		$	(12,335	)	$	131,620		
Accounts payable to NACCO Industries, Inc.	2,480			—					2,480		—		2,480		
Revolving credit agreements	69,883			—					69,883		(9,800	)	60,083		
Accrued compensation	16,575			356			f		16,931		(1,510	)	15,421		
Accrued product returns	9,601			—					9,601		—		9,601		
Other current liabilities	27,139			1,397			a,d,e		28,536		(6,048	)	22,488		
Current liabilities of discontinued operations	—			—					—		29,693		29,693		
Total current liabilities	269,633			1,753					271,386		—		271,386		
Revolving credit agreements	30,000			—					30,000		—		30,000		
Other long-term liabilities	24,840			(204	)		e		24,636		(2,293	)	22,343		
Non-current liabilities of discontinued operations	—			—					—		2,293		2,293		
Total liabilities	324,473			1,549					326,022		—		326,022		
Stockholders’ equity										
Class A Common stock	92			—					92		—		92		
Class B Common stock	45			—					45		—		45		
Capital in excess of par value	51,366			—					51,366		—		51,366		
Treasury stock	—			—					—		—		—		
Retained earnings	17,031			(7,658	)		a,d,e,f		9,373		—		9,373		
Accumulated other comprehensive loss	(14,084	)		143			a,b,d		(13,941	)	—		(13,941	)	
Total stockholders’ equity	54,450			(7,515	)				46,935		—		46,935		
Total liabilities and stockholders' equity	$	378,923			$	(5,966	)				$	372,957		$	—		$	372,957		

F-94

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $0.4 million, a reduction to prepaid expenses and other current assets of $5.7 million, and an increase to other current liabilities of $1.0 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $0.1 million, a decrease to other long-term liabilities of $0.2 million and an increase to other current liabilities of $0.1 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to accrued compensation of $0.4 million

F-95

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

																				
`	June 30, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement Reference	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Assets	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	1,962			$	—					$	1,962		$	(569	)	$	1,393		
Trade receivables, net	77,623			(411	)		a		77,212		(1,080	)	76,132		
Inventory	165,237			—					165,237		(26,516	)	138,721		
Prepaid expenses and other current assets	20,996			(3,888	)		a		17,108		(2,539	)	14,569		
Current assets of discontinued operations	—			—					—		30,704		30,704		
Total current assets	265,818			(4,299	)				261,519		—		261,519		
Property, plant and equipment, net	21,839			—					21,839		(2,751	)	19,088		
Goodwill	6,253			—					6,253		—		6,253		
Other intangible assets, net	5,209			—					5,209		—		5,209		
Deferred income taxes	10,894			668			e		11,562		(2,685	)	8,877		
Deferred costs	9,973			—					9,973		(148	)	9,825		
Other non-current assets	3,282			—					3,282		(104	)	3,178		
Non-current assets of discontinued operations	—			—					—		5,688		5,688		
Total assets	$	323,268			$	(3,631	)				$	319,637		$	—		$	319,637		
Liabilities and stockholders' equity										
Current liabilities										
Accounts payable	$	103,461			$	—					$	103,461		$	(10,973	)	$	92,488		
Accounts payable to NACCO Industries, Inc.	2,769			—					2,769		—		2,769		
Revolving credit agreements	75,476			—					75,476		(9,150	)	66,326		
Accrued compensation	12,531			325			f		12,856		(872	)	11,984		
Accrued product returns	9,648			—					9,648		—		9,648		
Other current liabilities	19,099			2,505			a,d,e,f		21,604		(5,835	)	15,769		
Current liabilities of discontinued operations	—			—					—		26,830		26,830		
Total current liabilities	222,984			2,830					225,814		—		225,814		
Revolving credit agreements	30,000			—					30,000		—		30,000		
Other long-term liabilities	24,274			(204	)		e		24,070		(2,416	)	21,654		
Non-current liabilities of discontinued operations	—			—					—		2,416		2,416		
Total liabilities	277,258			2,626					279,884		—		279,884		
Stockholders’ equity										
Class A Common stock	92			—					92		—		92		
Class B Common stock	45			—					45		—		45		
Capital in excess of par value	50,721			—					50,721		—		50,721		
Treasury stock	—			—					—		—		—		
Retained earnings	10,152			(6,755	)		a,d,e,f		3,397		—		3,397		
Accumulated other comprehensive loss	(15,000	)		498			a,e,f		(14,502	)	—		(14,502	)	
Total stockholders’ equity	46,010			(6,257	)				39,753		—		39,753		
Total liabilities and stockholders' equity	$	323,268			$	(3,631	)				$	319,637		$	—		$	319,637		

F-96

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $0.4 million, a reduction to prepaids and other assets of $3.9 million, and an increase to other current liabilities of $1.3 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.2 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $0.7 million, an increase to other current liabilities of $0.2 million, and a decrease to other long-term liabilities of $0.2 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to accrued compensation of $0.3 million, and an increase to other current liabilities of $0.8 million

F-97

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

CONDENSED CONSOLIDATED BALANCE SHEETS

																				
`	March 31, 2018	
 	As Previously Reported	 	Restatement Impacts	 	Restatement Reference	 	As Restated	Recasting Impacts	As Restated and Recast	
 	(In thousands)	
Assets	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	$	2,389			$	—					$	2,389		$	(605	)	$	1,784		
Trade receivables, net	88,579			(191	)		a		88,388		(9,030	)	79,358		
Inventory	157,622			—					157,622		(24,873	)	132,749		
Prepaid expenses and other current assets	11,848			(2,655	)		a		9,193		5,422		14,615		
Current assets of discontinued operations	—			—					—		29,086		29,086		
Total current assets	260,438			(2,846	)				257,592		—		257,592		
Property, plant and equipment, net	20,597			—					20,597		(2,954	)	17,643		
Goodwill	6,253			—					6,253		—		6,253		
Other intangible assets, net	5,555			—					5,555		—		5,555		
Deferred income taxes	12,200			610			e		12,810		(2,391	)	10,419		
Deferred costs	10,347			—					10,347		(160	)	10,187		
Other non-current assets	3,224			—					3,224		(156	)	3,068		
Non-current assets of discontinued operations	—			—					—		5,661		5,661		
Total assets	$	318,614			$	(2,236	)				$	316,378		$	—		$	316,378		
Liabilities and stockholders' equity										
Current liabilities										
Accounts payable	$	108,185			$	—					$	108,185		$	(11,261	)	$	96,924		
Accounts payable to NACCO Industries, Inc.	9,285			—					9,285		(1,471	)	7,814		
Revolving credit agreements	65,508			—					65,508		(2,200	)	63,308		
Accrued compensation	9,833			338			f		10,171		(933	)	9,238		
Accrued product returns	10,815			—					10,815		—		10,815		
Other current liabilities	22,751			4,120			a,d,e,f		26,871		(5,644	)	21,227		
Current liabilities of discontinued operations	—			—					—		21,509		21,509		
Total current liabilities	226,377			4,458					230,835		—		230,835		
Revolving credit agreements	20,000			—					20,000		—		20,000		
Other long-term liabilities	24,600			(204	)		e		24,396		(2,565	)	21,831		
Non-current liabilities of discontinued operations	—			—					—		2,565		2,565		
Total liabilities	270,977			4,254					275,231		—		275,231		
Stockholders’ equity										
Class A Common stock	92			—					92		—		92		
Class B Common stock	45			—					45		—		45		
Capital in excess of par value	49,051			—					49,051		—		49,051		
Treasury stock	—			—					—		—		—		
Retained earnings	12,191			(6,508	)		a,d,e,f		5,683		—		5,683		
Accumulated other comprehensive loss	(13,742	)		18			a,e,f		(13,724	)	—		(13,724	)	
Total stockholders’ equity	47,637			(6,490	)				41,147		—		41,147		
Total liabilities and stockholders' equity	$	318,614			$	(2,236	)				$	316,378		$	—		$	316,378		

F-98

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
HAMILTON BEACH BRANDS HOLDING COMPANY
(Tabular Amounts in Thousands, Except Per Share and Percentage Data)

(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $0.2 million, a reduction to prepaids and other assets of $2.6 million, and an increase to other current liabilities of $2.6 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in an increase to other current liabilities of $0.3 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $0.6 million, and a decrease to other long-term liabilities of $0.2 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to accrued compensation of $0.3 million, and an increase to other current liabilities of $1.2 million

F-99

Table of Contents

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
HAMILTON BEACH BRANDS HOLDING COMPANY
YEAR ENDED DECEMBER 31, 2019, 2018, AND 2017

																							
 	 	 	 	Additions	 	 	 	 	 	 	
Description	 	Balance at Beginning of Period	 	Charged to
Costs and
Expenses	 	Charged to
Other Accounts
— Describe	 	Deductions
— Describe	 	Balance at
End of
Period (C)	
(In thousands)	
2019	 	 	 	 	 	 	 	 	 	 	 	 	
Reserves deducted from asset accounts:	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for doubtful accounts	 	$	713		 	$	309		 	$	—		 	$	(1	)	 	(A) 	 	$	1,023		
Deferred tax valuation allowances (as Restated)	 	$	1,162		 	$	6,502		 	$	—		 	$	39		 	(D)	 	$	7,625		
2018	 	 	 	 	 	 	 	 	 	 	 	 	
Reserves deducted from asset accounts:	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for doubtful accounts	 	$	1,177		 	$	11		 	$	—		 	$	475		 	(A) 	 	$	713		
Deferred tax valuation allowances (as Restated)	 	$	1,968		 	$	—		 	$	—		 	$	806		 	(D)	 	$	1,162		
2017	 	 	 	 	 	 	 	 	 	 	 	 	
Reserves deducted from asset accounts:	 	 	 	 	 	 	 	 	 	 	 	 	
Allowance for doubtful accounts	 	$	862		 	$	405		 	$	—		 	$	90		 	(A) 	 	$	1,177		
Allowance for discounts, adjustments and returns	 	$	14,650		 	$	21,358		 	$	—		 	$	21,844		 	(B) 	 	$	14,164		
Deferred tax valuation allowances (as Restated)	 	$	1,686		 	$	295		 	$	—		 	$	13		 	 	 	$	1,968		

(A)	Write-offs, net of recoveries and foreign exchange rate adjustments.	
		
(B)	Payments and customer deductions for product returns, discounts and allowances.	
		
(C)	Balances which are not required to be presented and those which are immaterial have been omitted.	
		
(D)	Foreign exchange rate adjustments and utilization of foreign entity losses.	

F-100

Exhibit 4.3

Description of HAMILTON BEACH BRANDS HOLDING COMPANY’s Securities Registered Pursuant To Section 12 of the Securities Exchange Act Of 1934

The following description sets forth certain material terms and provisions of the securities of Hamilton Beach Brands Holding Company (“we,” “us” or “our”) that are registered under Section 12 of the Securities Exchange Act of 1934, as amended. This description also summarizes relevant provisions of Delaware law. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by, the provisions of our certificate of incorporation and bylaws, copies of which are filed as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.3 is a part, and by the applicable provisions of Delaware law.

As of the date of this filing, we are authorized to issue up to 100 million shares of common stock (comprised of 70 million shares of our Class A Common and 30 million shares of our Class B Common), par value $0.01 per share, and 5 million shares of preferred stock, par value $0.01 per share.

Common Stock

Voting Rights

Subject to the rights of the holders of any series of preferred stock, each share of our Class A Common entitles the holder of the share to one vote on all matters submitted to our stockholders, and each share of our Class B Common entitles the holder of the share to ten votes on all such matters.

Dividends and Other Distributions

Subject to the rights of the holders of any series of preferred stock, each share of our Class A Common and our Class B Common is equal in respect of rights to dividends and other distributions in our cash, stock or property, except that in the case of dividends or other distributions payable in our stock, including distributions pursuant to split-ups or divisions of our stock, only our Class A Common is distributed with respect to our Class A Common and only our Class B Common is distributed with respect to our Class B Common. In the event of a future spin-off of one of our subsidiaries, the Hamilton Beach Brands Holding Company amended and restated certificate of incorporation permits the Company to elect to distribute to each holder of our Class A Common shares of the Class A common stock of such subsidiary and to each holder of our Class B Common shares of the Class B common stock of such subsidiary. In the case of any consolidation, merger or sale of all, or substantially all, of our assets as a result of which our stockholders will be entitled to receive cash, stock other securities or other property with respect to or in exchange for their shares of our stock, each holder of our Class A Common and our Class B Common will be entitled to receive an equal amount of consideration for each share of our Class A Common or our Class B Common held by such holder.

Restrictions on Transfer of Class B Common; Convertibility of Class B Common into Class A Common.

Our Class B Common generally is not transferable by a stockholder except to or among such holder’s spouse, certain relatives of such holder, and spouses of such relatives, certain trusts established for their or another permitted transferee’s benefit, certain corporations, limited liability companies and partnerships owned by them and certain charitable organizations.

Our Class B Common is, however, convertible at all times, and without cost to the stockholder, into our Class A Common on a share-for-share basis. Therefore, stockholders desiring to sell the equity interest in us represented by their shares of our Class B Common may convert those shares into an equal number of shares of our Class A Common and sell the shares of our Class A Common. A stockholder who does not wish to complete the conversion process before a sale may effect a sale of our Class A Common into which such stockholder’s shares of our Class B Common is convertible.

Other than pursuant to conversions into our Class A Common as described above, a holder of shares of our Class B Common may transfer such shares (whether by sale, assignment, gift, bequest, appointment or otherwise) only to a permitted transferee, which is defined generally as follows:

1.	to the extent such person is a natural person, any of the lineal descendants of a great, great, great, great grandparent of such holder of our Class B Common, including children adopted before age 18 or any spouse (including a widow or widower) of such lineal descendant, any of the spouses of a lineal descendant of a great, great, great, great grandparent of such Class B stockholder’s spouse, any lineal descendant of any spouse of a lineal descendant of a great, great, great, great grandparent of such Class B stockholder (such persons, including such holder of our Class B Common, are hereinafter referred to as such “Class B stockholder’s family members”);	

2.	a trust for the benefit of such Class B stockholder’s family members and certain charitable organizations;	

3.	certain charitable organizations established by such Class B stockholder’s family members; and	

4.	a corporation whose stockholders, a partnership whose partners or a limited liability company whose members, are made up exclusively of such Class B stockholder’s family members, any trust described in (2) above or any other permitted transferees.	

In the case of a corporation or limited liability company, shares of our Class B Common also may be transferred to a successor by merger or consolidation, provided that each stockholder of each other corporation or member of each other limited liability company, as applicable, which is a party to such merger or consolidation is, at the time of such transaction, a stockholder of such corporation or a permitted transferee of at least one stockholder of such corporation or a member of such limited liability company or a permitted transferee of at least one member of such limited liability company. Class B Common shares being beneficially held pursuant to a trust may be transferred to (i) any person, as of the record date, to whom or for whose benefit principal may be distributed under the terms of the trust, (ii) the person or persons who established such trust, and (iii) permitted transferees of any such person described in subclause (i) or (ii). Shares beneficially held by certain charitable organizations may be transferred to the Class B stockholder who or that transferred such shares to the charitable organization and to such holder’s permitted transferees.

The restrictions on the transferability of our Class B Common are set forth in full in Section 3 of Article IV of our amended and restated certificate of incorporation. Each certificate representing shares of our Class B Common will bear a legend indicating that the shares of our Class B Common are subject to restrictions on the transfer and registration of transfer thereof.

Any purported transfer of shares of our Class B Common not permitted under our amended and restated certificate of incorporation will be void and of no effect and the purported transferee will have no rights as our stockholder and no other rights against or with respect to us. We may, as a condition to the transfer or registration of transfer of shares of our Class B Common to a permitted transferee, require the furnishing of such affidavits or other proof as we deem necessary to establish that such transferee is a permitted transferee.

Additional shares of our Class B Common will not be issued without an affirmative vote of the holders of a majority of our outstanding voting stock, except in connection with stock splits and stock dividends. All shares of our Class B Common received by us when stockholders convert them into our Class A Common or that are otherwise acquired by us will be retired and not reissued.

Other Provisions

Neither our Class A Common nor our Class B Common carry any preemptive rights enabling a holder to subscribe for or receive shares of our stock of any class or any other securities convertible into shares of our stock.

Listing

Our Class A Common is quoted on the NYSE under the symbol “HBB.” Our Class B Common is not listed on the NYSE or any other stock exchange.

Preferred Stock

Our Board is authorized to issue one or more series of up to 5 million shares of preferred stock. With respect to each series of the preferred stock, our Board has the authority, consistent with our amended and restated certificate of incorporation, to determine the following terms:

1.	the number of shares and the designation of any series;	

2.	the voting powers, if any, of the shares of such series and whether such voting powers are full or limited;	

3.	the redemption provisions, if any, applicable to such series, including the redemption price or prices to be paid;	

4.	whether dividends, if any, will be cumulative or noncumulative, the dividend rate or rates of such series and the dates and preferences of dividends of such series;	

5.	the rights of such series upon our voluntary or involuntary dissolution, or upon any distribution of our assets;	

6.	whether the shares are convertible into, or exchangeable for, any of our other stock, the price or rate of conversion or exchange and the applicable terms and conditions;	

7.	the right, if any, to subscribe for or to purchase any of our securities or of any other corporation or other entity;	

8.	the provisions, if any, of any sinking fund applicable to such series; and	

9.	any other relative, participating, optional or other powers, preferences or rights, and any qualifications, limitations or restrictions, of such series;	

The issuance of preferred stock may adversely affect the voting rights and other rights of the holders of common stock.

Provisions That May Have an Anti-Takeover Effect

Our amended and restated certificate of incorporation contains provisions that may make the acquisition of control of us by means of a tender offer, open market purchase, proxy fight or otherwise more difficult. Our amended and restated bylaws also contain provisions that could have an anti-takeover effect.

These provisions of our amended and restated certificate of incorporation and our amended and restated bylaws are designed to encourage persons seeking to acquire control of us to negotiate the terms with our Board. We believe that, as a general rule, the interests of our stockholders are best served if any change in control results from negotiations with our Board based upon careful consideration of the proposed terms, such as the price to be paid to stockholders, the form of consideration to be paid and the anticipated tax effects of the transaction. Stockholders are not generally permitted to call a special meeting of stockholders. However, in the future, preferred stock may be designated that permits the holders of such preferred stock to call a special meeting of the holders of such class of preferred stock. Subject to the rights of holders of our preferred stock, our directors must be nominated in accordance with Section 3 of Article II of our amended and restated bylaws, which provides that nominations for election as directors at an annual meeting of our stockholders may only be made (i) by or at the direction of our Board or a committee thereof or (ii) by any stockholder who is entitled to vote at such annual meeting and who complies with the additional requirements of such section.

The provisions could, however, have the effect of discouraging a prospective acquirer from making a tender offer or otherwise attempting to obtain control of us. To the extent that these provisions discourage takeover attempts, they could deprive stockholders of opportunities to realize takeover premiums for their shares. Moreover, these provisions could discourage accumulations of large blocks of shares of our Class A Common, thus depriving stockholders of any advantages that large accumulations of stock might provide. Set forth below is a summary of the relevant provisions of our amended and restated certificate of incorporation and our amended and restated bylaws and certain applicable sections of the Delaware General Corporation Law (“DGCL”). This summary may not contain all of the information that is important to you and is subject to, and is qualified by reference to, all of the provisions of our amended and restated certificate of incorporation and our amended and restated bylaws and the DGCL.

Restrictions on Certain Transactions with Interested Persons

We are subject to Section 203 of the DGCL, which prohibits certain business combinations and transactions between a corporation and an “interested stockholder” for at least three years after the interested stockholder becomes an interested stockholder, unless:

•	before the interested stockholder’s share acquisition date, the board approved either the business combination or the purchase of shares by the interested stockholder;	

•	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or	

•	the transaction is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock, after excluding shares controlled by the interested stockholder.	

An “interested stockholder” is any person that (i) is the owner of 15% or more of our outstanding voting stock, or (ii) is our affiliate or associate and was the owner of 15% or more of our outstanding voting stock at any time within the 3-year period immediately before the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person.

Special Vote Required for Certain Amendments to Organizational Documents

Certain provisions of our amended and restated certificate of incorporation, such as those set forth in Article V (election and removal of directors), Article VI (amendment of bylaws) and Article IX (rights to indemnification), may not be amended or repealed except by the affirmative vote of the holders of at least 80% of the voting power of our outstanding voting stock, voting together as a single class. Such 80% vote is also required to adopt any provisions inconsistent with any of the provisions of Article I, Sections 1 (time and place of meetings of stockholders), 3 (special meetings of stockholders) and 8 (order of business at meetings of stockholders), Article II, Sections 1 (number and term of office of directors), 2 (vacancies and new directorships), 3 (nominations and election of directors) and 4 (powers of directors) and Article VII (amendments to bylaws) of our amended and restated bylaws.

Other Provisions

Certain other provisions of our amended and restated certificate of incorporation and our amended and restated bylaws may also tend to discourage attempts to acquire control of us. These include advance notice requirements for director nominations and stockholder proposals and provisions that prohibit stockholder action being effected by written consent.

Exhibit 10.38

AMENDMENT TO STOCKHOLDERS’ AGREEMENT
This AMENDMENT TO STOCKHOLDERS’ AGREEMENT, dated as of February 24, 2020 (this “Amendment”), by and among the Depository, Hamilton Beach Brands Holding Company, a Delaware corporation (the “Corporation”), the new Participating Stockholder identified on the signature pages hereto (the “New Participating Stockholder”) and the Participating Stockholders under the Stockholders’ Agreement, dated as of September 29, 2017, as amended (the “Stockholders’ Agreement”), by and among the Depository, the Corporation and the Participating Stockholders. Capitalized terms defined in the Stockholders’ Agreement are used herein as so defined.
This Amendment sets forth the terms and conditions on which the New Participating Stockholder will join in and become a party to the Stockholders’ Agreement.
Pursuant to Section 8 of the Stockholders’ Agreement, prior to the acquisition of Class B Common Stock by a Permitted Transferee, the Stockholders’ Agreement may be amended to add a Permitted Transferee as a Participating Stockholder by a writing signed by the Signatories, the Corporation and such Permitted Transferee.
In consideration of the mutual promises hereinafter set forth and other good and valuable consideration had and received, the parties hereto agree as follows:
Representations and Warranties. The New Participating Stockholder represents and warrants to the other Participating Stockholders and the Corporation as follows:
The New Participating Stockholder is the beneficial owner of, or simultaneously with the execution hereof will acquire and be deemed to be the beneficial owner of, the shares of Class B Common Stock identified below such New Participating Stockholder’s name on the signature pages hereto (except as otherwise described thereon), and except as otherwise described thereon such New Participating Stockholder does not own of record or beneficially or have any interest in any other shares of Class B Common Stock or any options to purchase or rights to subscribe or otherwise acquire any other shares of Class B Common Stock other than pursuant to the Stockholders’ Agreement;
The New Participating Stockholder has the right, power and authority to execute and deliver this Amendment and to perform such New Participating Stockholder’s obligations hereunder and under the Stockholders’ Agreement; if this Amendment is being executed by a trustee on behalf of a trust, such trustee has full right, power and authority to enter into this Amendment on behalf of the trust and to bind the trust and its beneficiaries to the terms hereof; if this Amendment is being executed on behalf of a Participating Stockholder Organization, the person executing this Amendment is a duly authorized representative of such Participating Stockholder Organization with full right, power and authority to execute and deliver this Amendment on behalf of such Participating Stockholder Organization and to bind such Participating Stockholder Organization to the terms hereof; the execution, delivery and performance of this Amendment by such New Participating Stockholder will not constitute a violation of, conflict with or result in a default under (i) any contract, understanding or arrangement to which such New Participating Stockholder is a party or by which such New Participating Stockholder is bound or require the consent of any other person or any party pursuant thereto; (ii) any organizational, charter or other governance documents (including, without limitation, any partnership agreement, certificate of incorporation, or bylaws) of the New Participating Stockholder, (iii) any judgment, decree or order

applicable to such New Participating Stockholder; or (iv) any law, rule or regulation of any governmental body;
This Amendment and the Stockholders’ Agreement constitute legal, valid and binding agreements on the part of such New Participating Stockholder; the shares of Class B Common Stock owned beneficially by such New Participating Stockholder are fully paid and non-assessable; and
The shares of Class B Common Stock owned beneficially by the New Participating Stockholder are now held by the New Participating Stockholder, free and clear of all adverse claims, liens, encumbrances and security interests (except as created by the Stockholders’ Agreement and any Amendments thereto, including this Amendment, and the Restated Certificate).
Address for Notices. The address for all notices to each New Participating Stockholder provided pursuant to the Stockholders’ Agreement shall be the address set forth below such New Participating Stockholder’s name on the signature pages hereto, or to such other address as such New Participating Stockholder may specify to the Depository.
Agreement to be Bound by Stockholders’ Agreement. The New Participating Stockholder agrees to be bound by all of the terms and provisions of the Stockholders’ Agreement applicable to Participating Stockholders.
Beneficiaries. The New Participating Stockholder acknowledges that the Corporation and each Participating Stockholder is a beneficiary of this Amendment.
Amendment of Stockholders’ Agreement. The Stockholders’ Agreement is hereby amended to add the New Participating Stockholder as a Participating Stockholder.
Signature of Amendment by Trusts, Minors and Incompetents.
In order for a trust exclusively (as defined in Section 1.11 of the Stockholders’ Agreement) for the benefit of a Family Member or Members to be considered a Participating Stockholder:
the trustee and all adult beneficiaries of such trusts having a current trust interest (as well as all Charitable Organization beneficiaries having a current trust interest) shall have previously signed the Stockholders’ Agreement or shall sign this Amendment as a Participating Stockholder;
the trustee and a parent or legal guardian, for trusts with minor beneficiaries having a current trust interest, shall sign this Amendment on behalf of any such minor beneficiaries; or
the trustee and legal guardian, if any, for trusts with incompetent beneficiaries having a current trust interest, shall sign this Amendment on behalf of any such incompetent beneficiaries.
If, at any time, any trust shall have an adult beneficiary (and such beneficiary is not incompetent) having a current trust interest or an ascertainable Charitable Organization beneficiary having a current trust interest and if such beneficiary has not previously signed the Stockholders’ Agreement, then if such beneficiary shall fail or be unable to sign this Amendment for a period of 30 calendar days following notification to such beneficiary of the terms of this Amendment and the Stockholders’ Agreement by the Depository and following signature of this Amendment by the trustee, the trust shall thereupon cease to be a Participating Stockholder and Section 3.2 of the Stockholders’ Agreement shall then apply as if the shares of Class B Common Stock held by the trust were then to be converted. The

donor of a trust that is revocable by the donor alone, during the lifetime of such donor, shall be considered the only beneficiary thereof so long as such trust is so revocable.
In the case of Class B Common Stock held by a custodian under the Uniform Transfers to Minors Act (or the practical equivalent thereof) for the benefit of a minor Family Member, the custodian shall sign this Amendment on behalf of such minor if such minor is to be considered a Participating Stockholder.
In the case of Class B Common Stock held in the name of a minor Family Member, a parent or legal guardian of such minor shall sign this Amendment on behalf of such minor if such minor is to be considered a Participating Stockholder.
In the case of Class B Common Stock held in the name of an incompetent Family Member, the legal guardian of such incompetent shall sign this Amendment on behalf of such incompetent if such incompetent is to be considered a Participating Stockholder.
When a minor described in Section 6(c) or(d) reaches the age of majority, or an incompetent described in Section 6(e) is no longer impaired by such disability and has reached the age of majority, such Family Member shall execute and deliver an Amendment which has been executed and delivered by the Participating Stockholders (or their attorney-in-fact), the Corporation and the Depository. If such Family Member shall fail or be unable to sign such Amendment for a period of 30 calendar days following notification to such Family Member of the terms of the Stockholders’ Agreement by the Depository, such Family Member shall thereupon cease to be a Participating Stockholder and Section 3.2 of the Stockholders’ Agreement shall then apply as if the shares of Class B Common Stock were then to be converted.
Power of Attorney. The undersigned New Participating Stockholder hereby constitutes and appoints Alfred M. Rankin, Jr., Eric Orsic, Thomas J. Murphy, Dana B. Sykes, Andrew C. Thomas, Derek R. Redmond and each of them, as the true and lawful attorney or attorneys-in-fact, with full power of substitution and resubstitution, for the undersigned and in the name, place and stead of the undersigned, in any and all capacities to:
execute any and all statements under Section 13 or Section 16 of the Securities Exchange Act of 1934 of beneficial ownership of shares of Class B Common Stock subject to the Stockholders’ Agreement as amended by this Amendment, including all statements on Schedule 13D and all amendments thereto, all joint filing agreements pursuant to Rule 13d-l(k) under such Exchange Act in connection with such statements, all initial statements of beneficial ownership on Form 3 and any and all other documents to be filed with the Securities and Exchange Commission, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and
execute and deliver any and all Amendments whereby a Family Member, Charitable Organization or Participating Stockholder Organization becomes a Participating Stockholder or any other amendment to the Stockholders’ Agreement in accordance with Section 8 of the Stockholders’ Agreement, other than those amendments that (i) extend the term of the Stockholders’ Agreement or (ii) amend Section 2, 3, 4 or 8 of the Stockholders’ Agreement, thereby granting to said attorney or attorneys-in-fact, and each of them, full power and authority to do so and to perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney or attorneys-in-fact or any of them, or their substitutes or resubstitutes, may lawfully do or cause to be done by virtue of this

Section 7. The grant of this power of attorney shall not be affected by any disability of such undersigned New Participating Stockholder. If applicable law requires additional or substituted language or formalities (including witnesses or acknowledgments) in order to validate the power of attorney intended to be granted by this Section 7, each New Participating Stockholder agrees to execute and deliver such additional instruments and to take such further acts as may be necessary to validate such power of attorney.
Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument, without production of the others.
IN WITNESS WHEREOF, the New Participating Stockholder, the Participating Stockholders, the Corporation and the Depository have executed this Amendment or caused this Amendment to be executed in their respective names, all as of the date and year first above written.
Elisabeth Marshall Rankin Main Trust u/a/d
December 30, 2015, as amended

By: /s/ Roger F. Rankin        
Roger F. Rankin
(a new Participating Stockholder)

Address:    1449 Carpenter Road
Gates Mills, OH 44040

	
			
Number of Shares of
Class B Common Stock	 	Certificate No.	

IN WITNESS WHEREOF, the New Participating Stockholder, the Participating Stockholders, the Corporation and the Depository have executed this Amendment or caused this Amendment to be executed in their respective names, all as of the date and year first above written.
Paige J. Rankin

/s/ Claiborne R. Rankin, Jr.    
By: Claiborne R. Rankin, Jr., as Custodian
(a new Participating Stockholder)

Address:    103 Marion Avenue,
Lake Forest, IL 60045

			
Number of Shares of
Class B Common Stock	 	Certificate No.	

IN WITNESS WHEREOF, the New Participating Stockholder, the Participating Stockholders, the Corporation and the Depository have executed this Amendment or caused this Amendment to be executed in their respective names, all as of the date and year first above written.
Trust FBO Paige J. Rankin U/T/A Vested Trusts for Children of Claiborne R. Rankin, Jr. dated August 26, 2016

/s/ Claiborne R. Rankin, Jr.    
By: Claiborne R. Rankin, Jr., Trustee
(a new Participating Stockholder)

Address:    103 Marion Avenue,
Lake Forest, IL 60045

			
Number of Shares of
Class B Common Stock	 	Certificate No.	

HAMILTON BEACH BRANDS HOLDING COMPANY, as Depository

By: /s/ Dana B. Sykes    
Dana B. Sykes
Senior Vice President, General Counsel and Secretary

HAMILTON BEACH BRANDS HOLDING COMPANY

By: /s/ Dana B. Sykes    
Dana B. Sykes
Senior Vice President, General Counsel and Secretary

THE PARTICIPATING STOCKHOLDERS listed in Annex A attached hereto and incorporated herein by this reference

By: /s/ Derek R. Redmond    
Derek R. Redmond, attorney in fact for the
Participating Stockholders

Annex A
PARTICIPATING STOCKHOLDERS
1.    Clara L. T. Rankin
2.    Alfred M. Rankin, Jr.
3.    Victoire G. Rankin
4.    Helen Rankin Butler (f/k/a Helen P. Rankin)
5.    Clara T. Rankin Williams (f/k/a Clara T. Rankin)
6.    Thomas T. Rankin
7.    Matthew M. Rankin
8.    James T. Rankin
9.    Claiborne R. Rankin
10.    Chloe O. Rankin
11.    Chloe R. Seelbach (f/k/a Chloe E. Rankin)
12.    Claiborne R. Rankin, Jr.
13.    Roger F. Rankin
14.    Bruce T. Rankin
15.    Martha S. Kelly
16.    Susan Sichel
17.    Jennifer T. Jerome
18.    Caroline T. Ruschell
19.    David F. Taplin
20.    Beatrice B. Taplin
21.    Theodore D. Taplin
22.    Britton T. Taplin
23.    Frank F. Taplin
24.    Rankin Management, Inc.

25.    Rankin Associates I, L.P. (f/k/a CTR Family Associates, L.P.)

26.	The Trust created under the Agreement, dated December 28, 1976, between National City Bank, as trustee, and Clara L.T. Rankin, for the benefit of grandchildren	

27.	The Trust created under the Agreement, dated July 20, 2000, as supplemented, amended and restated, between Alfred M. Rankin, Jr., as trustee, and Clara T. Rankin, for the benefit of Clara T. Rankin	

28.	The Trust created under the Agreement, dated September 28, 2000, as supplemented, amended and restated, between Alfred M. Rankin, Jr., as trustee, and Alfred M. Rankin, Jr., for the benefit of Alfred M. Rankin, Jr.	

29.	The Trust created under the Agreement, dated September 28, 2000, as supplemented, amended and restated, between Victoire G. Rankin, as trustee, and Victoire G. Rankin, for the benefit of Victoire G. Rankin	

30.	The Trust created under the Agreement, dated December 29, 1967, as supplemented, amended and restated, between Thomas T. Rankin, as trustee, and Thomas T. Rankin, creating a trust for the benefit of Thomas T. Rankin	

31.	The Trust created under the Agreement, dated June 22, 1971, as supplemented, amended and restated, between Claiborne R. Rankin, as trustee, and Claiborne R. Rankin, creating a trust for the benefit of Claiborne R. Rankin	

32.	The Trust created under the Agreement, dated September 11, 1973, as supplemented, amended and restated, between Roger F. Rankin, as trustee, and Roger F. Rankin, creating a trust for the benefit of Roger F. Rankin	

33.	The Trust created under the Agreement, dated September 28, 2000, between Alfred M. Rankin, Jr., as trustee, and Bruce T. Rankin, for the benefit of Bruce T. Rankin	

34.	The Trust created under the Agreement, dated October 15, 1975, between National City Bank, as trustee, and Theodore D. Taplin, for the benefit of Theodore D. Taplin	

35.	The Trust created under the Agreement, dated December 30, 1977, as supplemented, amended and restated, between National City Bank, as trustee, and Britton T. Taplin for the benefit of Britton T. Taplin	

36.	The Trust created under the Agreement, dated December 29, 1989, as supplemented, amended and restated, between Alfred M. Rankin, Jr., as trustee, and Clara T. (Rankin) Williams for the benefit of Clara T. (Rankin) Williams	

37.	The Trust created under the Agreement, dated December 29, 1989, as supplemented, amended and restated, between Alfred M. Rankin, Jr., as trustee, and Helen P. (Rankin) Butler for the benefit of Helen P. (Rankin) Butler	

38.	Corbin Rankin	

39.	Alison A. Rankin	

		
40.	National City Bank as agent under the Agreement, dated July 16, 1969, with Margaret E. Taplin	

41.	Alison A. Rankin, as trustee fbo A. Farnham Rankin under Irrevocable Trust No. 1, dated December 18, 1997, with Roger Rankin, Grantor	

42.	Alison A. Rankin, as trustee fbo Elisabeth M. Rankin under Irrevocable Trust No. 1, dated December 18, 1997, with Roger Rankin, Grantor	

43.	Rankin Associates II, L.P.	

44.	John C. Butler, Jr.	

45.	Clara Rankin Butler	

46.	The Trust created under the Agreement, dated July 24, 1998, as amended, between Frank F. Taplin, as trustee, and Frank F. Taplin, for the benefit of Frank F. Taplin	

47.	David B. H. Williams	

48.	Griffin B. Butler (by John C. Butler, Jr. as Custodian)	

49.	The Claiborne R. Rankin, Jr. Revocable Trust dated August 25, 2000	

50.	Alison A. Rankin as Trustee under Irrevocable Trust No. 2, dated September 11, 2000, for the benefit of A. Farnham Rankin	

51.	Alison A. Rankin as Trustee under Irrevocable Trust No. 2, dated September 11, 2000, for the benefit of Elisabeth M. Rankin	

52.	Alison A. Rankin as Trustee of the Alison A. Rankin Revocable Trust, dated September 11, 2000	

53.	The Trust created under the Agreement, dated December 20, 1993 for the benefit of Matthew M. Rankin	

54.	Scott Seelbach	

55.	Margo Jamison Victoire Williams (by Clara Rankin Williams as Custodian)	

56.	Trust created under the Agreement, dated June 1, 1995, between Chloe O. Rankin, as Trustee, and Chloe O. Rankin, for the benefit of Chloe O. Rankin	

57.	Trust created by the Agreement, dated June 17, 1999, between John C. Butler, Jr., as trustee, and John C. Butler, Jr., creating a trust for the benefit of John C. Butler, Jr.	

58.	Clara Rankin Butler 2002 Trust, dated November 5, 2002	

59.	Griffin Bedwell Butler 2002 Trust, dated November 5, 2002	

60.	Elizabeth B. Rankin	

		
61.	Margo Jamison Victoire Williams 2004 Trust created by the Agreement, dated December 10, 2004, between David B.H. Williams, as trustee, and Clara Rankin Williams, creating a trust for the benefit of Margo Jamison Victoire Williams	

62.	Helen Charles Williams 2004 Trust created by the Agreement, dated December 10, 2004, between David B.H. Williams, as trustee, and Clara Rankin Williams, creating a trust for the benefit of Helen Charles Williams	

63.	Helen Charles Williams (by David B.H. Williams as Custodian)	

64.	Julia L. Rankin Kuipers	

65.	Trust created by the Agreement, dated December 21, 2004 for the benefit of Julia L. Rankin	

66.	Thomas Parker Rankin	

67.	Taplin Elizabeth Seelbach (by Scott Seelbach as Custodian)	

68.	Trust created by the Agreement, dated December 21, 2004, between Chloe R. Seelbach, as trustee, and Claiborne R. Rankin, creating a trust for the benefit of Taplin Elizabeth Seelbach	

69.	Rankin Associates IV, L.P.	

70.	Marital Trust created by the Agreement, dated January 21, 1966, as supplemented, amended and restated, between National City Bank and Beatrice Taplin, as Trustees, and Thomas E. Taplin, for the benefit of Beatrice B. Taplin	

71.	Trust created by the Agreement, dated May 10, 2007, between Mathew M. Rankin, as Grantor, and Mathew M. Rankin and James T. Rankin, as co-trustees, for the benefit of Mary Marshall Rankin	

72.	Trust created by Agreement, dated May 10, 2007, between Mathew M. Rankin, as trustee, and James T. Rankin, creating a trust for the benefit of William Alexander Rankin	

73.	Trust created by the Agreement dated December 21, 2004, between Chloe R. Seelbach, as trustee, and Claiborne R. Rankin, creating a trust for the benefit of Isabelle Scott Seelbach	

74.	Lynne Turman Rankin	

75.	Jacob A. Kuipers	

76.	2012 Chloe O. Rankin Trust	

77.	2012 Corbin K. Rankin Trust	

78.	2012 Alison A. Rankin Trust	

79.	2012 Helen R. Butler Trust	

80.	2012 Clara R. Williams Trust	

81.	The David B.H. Williams Trust, David B.H. Trustee u/a/d October 14, 2009	

		
82.	Mary Marshall Rankin (by Matthew M. Rankin, as Custodian)	

83.	William Alexander Rankin (by Matthew M. Rankin, as Custodian)	

84.	Margaret Pollard Rankin (by James T. Rankin, as Custodian)	

85.	Trust created by the Agreement, dated April 10, 2009, between Chloe R. Seelbach, as trustee, creating a trust for the benefit of Chloe R. Seelbach	

86.	Trust created by the Agreement, dated December 21, 2004, between Chloe R. Seelbach, as trustee, and Claiborne R. Rankin, creating a trust for the benefit of Thomas Wilson Seelbach	

87.	Isabelle Seelbach (by Chloe R. Seelbach, as Custodian)	

88.	Elisabeth M. Rankin	

89.	A. Farnham Rankin	

90.	Taplin Annuity Trust #1 of Beatrice B. Taplin dated June 18, 2011	

91.	The Beatrice B. Taplin Trust/Custody dtd December 12, 2001, Beatrice B. Taplin, as Trustee, for the benefit of Beatrice B. Taplin	

92.	Ngaio T. Lowry Trust, dated February 26, 1998, Caroline T. Ruschell, Trustee	

93.	Caroline T. Ruschell Trust Agreement dated December 8, 2005, Caroline T. Ruschell as Trustee	

94.	Thomas E. Taplin Exempt Family Trust u/a dated January 21, 1966 and as amended, Beatrice Taplin, Trustee	

95.	Thomas E. Taplin Exempt Family Trust u/a dated January 21, 1966 amended, per IRC 1015(A) Dual Basis Sub-Account, Beatrice Taplin, Trustee	

96.	Alfred M. Rankin Jr.-Roth IRA- Brokerage Account #*****	

97.	John C. Butler, Jr.-Roth IRA- Brokerage Account #*****	

98.	DiAhn Taplin	

99.	BTR 2012 GST for Helen R. Butler	

100.	BTR 2012 GST for Clara R. Williams	

101.	BTR 2012 GST for James T. Rankin	

102.	BTR 2012 GST for Matthew M. Rankin	

103.	BTR 2012 GST for Thomas P. Rankin	

104.	BTR 2012 GST for Chloe R. Seelbach	

105.	BTR 2012 GST for Claiborne R. Rankin, Jr.	

		
106.	BTR 2012 GST for Julia R. Kuipers	

107.	BTR 2012 GST for Anne F. Rankin	

108.	BTR 2012 GST for Elisabeth M. Rankin	

109.	The Anne F. Rankin Trust dated August 15, 2012	

110.	Trust created by the Agreement, dated August 20, 2009 between James T. Rankin, as Trustee, and James T. Rankin, creating a trust for the benefit of James T. Rankin	

111.	Thomas P.K. Rankin, Trustee of the trust created by agreement, dated February 2, 2011, as supplemented, amended and restated, between Thomas P.K. Rankin, as trustee, and Thomas P.K. Rankin, creating a trust for the benefit of Thomas P.K. Rankin	

112.	Claiborne R. Rankin Trust for children of Julia R. Kuipers dated December 27, 2013 under Custody Agreement dated December 27, 2013 fbo Evelyn R. Kuipers	

113.	2016 Anne F. Rankin Trust	

114.	2016 Elisabeth M. Rankin Trust	

115.	AMR Associates, LP	

116.	Claiborne R. Rankin Trust for Children of Claiborne R. Rankin, Jr. dtd 08/26/2016 FBO Claiborne Read Rankin III	

117.	Claiborne R. Rankin Trust for Children of Julia R. Kuipers dtd 12/27/2013 FBO Matilda Alan Kuipers	

118.	Claiborne Read Rankin III (by Claiborne R. Rankin, Jr., as Custodian)	

119.	Matilda Alan Kuipers (by Julia R. Kuipers, as Custodian)	

120.	Vested Trust for James T. Rankin, Jr. U/A/D December 4, 2015	

121.	Vested Trust for Margaret Pollard Rankin U/A/D December 4, 2015	
122.    Evelyn R. Kuipers (by Julia R. Kuipers, as Custodian)
123.    James T. Rankin, Jr. (by James T. Rankin, as Custodian)
124.    Thomas Wilson Seelbach (by Chloe R. Seelbach, as Custodian)

125.	The Trust created under the Agreement, dated January 11, 1965, as supplemented, amended, and restated, between PNC Bank, as Co-Trustee, and Alfred M. Rankin, Jr., as Co-Trustee, for the benefit of the grandchildren.	

126.	Rankin Associates V, L.P.	

127.	Rankin Associates VI, L.P.	

Exhibit 21

SUBSIDARIES OF HAMILTON BEACH BRANDS HOLDING COMPANY

The following is a list of active subsidiaries as of the date of the filing with the Securities and Exchange Commission of the Annual Report on Form 10‑K to which this is an Exhibit. Except as noted, all of these subsidiaries are wholly-owned, directly or indirectly.

	
			
Name	 	Incorporation	
Altoona Services, Inc.	 	Pennsylvania	
Grupo HB/PS S.A. de C.V.	 	Mexico (99.98%)	
Hamilton Beach Brands Canada, Inc.	 	Canada	
Hamilton Beach Brands de Mexico S.A. de C.V.	 	Mexico (99.98%)	
Hamilton Beach Brands Do Brasil Comercializacao de Produtos Electricos Ltda	 	Brazil (99.9%)	
Hamilton Beach Brands, (HK) Limited	 	Hong Kong (PRC)	
Hamilton Beach Brands, Inc.	 	Delaware	
Hamilton Beach Electrical Appliances (Shenzhen) Co. Ltd.	 	China	
Hamilton Beach, Inc.	 	Delaware	
The Kitchen Collection, LLC	 	Ohio	
Weston Brands, LLC	 	Ohio	

Exhibit 23.1
Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

		
(1)	Registration Statement (Form S-8 No. 333-221358) pertaining to the Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan,	
		
(2)	Registration Statement (Form S-8 No. 333-221359) pertaining to the Hamilton Beach Brands Holding Company Non-Employee Directors' Equity Compensation Plan, and	
		
(3)	Registration Statement (Form S-8 No. 333-221360) pertaining to the Hamilton Beach Brands Holding Company Supplemental Executive Long-Term Incentive Bonus Plan;	

of our report dated February 26, 2020 (except for the effect of the restatement disclosed in Note 2, as to which the date is July 23, 2020), with respect to the consolidated financial statements and schedule of Hamilton Beach Brands Holding Company and our report dated February 26, 2020 (except for the effect of the material weaknesses described in the second and third paragraphs, as to which the date is July 23, 2020), with respect to the effectiveness of internal control over financial reporting of Hamilton Beach Brands Holding Company, included in this Annual Report (Form 10-K/A) of Hamilton Beach Brands Holding Company for the year ended December 31, 2019.

/s/ Ernst & Young LLP

Cleveland, Ohio
July 23, 2020

Exhibit 31(i)(1)

Certifications

I, Gregory H. Trepp, certify that:

1.	I have reviewed this annual report on Form 10-K/A of Hamilton Beach Brands Holding Company;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and	

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

	
				
Date:	July 23, 2020	/s/ Gregory H. Trepp	 	
 	 	Gregory H. Trepp	 	
 	 	President and Chief Executive Officer (Principal Executive Officer)	 	

Exhibit 31(i)(2)

Certifications

I, Michelle O. Mosier, certify that:

1.	I have reviewed this annual report on Form 10-K/A of Hamilton Beach Brands Holding Company;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and	

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

	
				
Date:	July 23, 2020	/s/ Michelle O. Mosier	 	
 	 	Michelle O. Mosier	 	
 	 	Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)/(Principal Accounting Officer)	 	

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Hamilton Beach Holding Company (the “Company”) on Form 10-K/A for the year ended December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer's knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.	

	
				
Date:	 	July 23, 2020	/s/ Gregory H. Trepp	
 	 	 	Gregory H. Trepp	
 	 	 	President and Chief Executive Officer (Principal Executive Officer)	
 	 	 	 	
Date:	 	July 23, 2020	/s/ Michelle O. Mosier	
 	 	 	Michelle O. Mosier	
 	 	 	Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)/(Principal Accounting Officer)