UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 _______________________________________________________________________________________________________________________________________________________________________________________________________
FORM 8-K

CURRENT REPORT	
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934	

Date of Report (Date of earliest event reported):	August 4, 2021	
				
HAMILTON BEACH BRANDS HOLDING COMPANY	
(Exact name of registrant as specified in its charter)	
				
Delaware		001-38214	31-1236686	
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS Employer Identification No.)	
				
4421 WATERFRONT DR	GLEN ALLEN	VA	23060	
(Address of principal executive offices)	(Zip code)	
				
	(804)	273-9777		
(Registrant's telephone number, including area code)	
				
N/A	
(Former name or former address, if changed since last report)	
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered	
Class A Common Stock, Par Value $0.01 Per Share		HBB		New York Stock Exchange	
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

Emerging growth company	☒				
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  			
	☐		

															

Item 2.02 Results of Operations and Financial Condition.
    
On August 4, 2021, Hamilton Beach Brands Holding Company (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2021. A copy of the press release is attached as Exhibit 99 to this Current Report on Form 8-K.

The information set forth in Item 2.02 of this Current Report on Form 8-K and the information attached hereto are being furnished by the Company pursuant to Item 2.02 of Form 8-K, insofar as they disclose historical information regarding the Company's results of operations.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

As described in Item 2.02 of this Current Report on Form 8-K, the following Exhibit is furnished as part of this Current Report on Form 8-K.

									
(d) Exhibits			
			
99		Hamilton Beach Brands Holding Company second quarter ended June 30, 2021 earnings release, dated August 4, 2021.	
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)	

SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

												
				
Date:	August 4, 2021		HAMILTON BEACH BRANDS HOLDING COMPANY	
				
		By:	/s/ Michelle O. Mosier	
		Name:	Michelle O. Mosier	
		Title:	Senior Vice President, Chief Financial Officer, and Treasurer	

						

CONTACT:
Lou Anne J. Nabhan
Louanne.nabhan@hamiltonbeach.com
804-418-7745

For Immediate Release
Wednesday, August 4, 2021

HAMILTON BEACH BRANDS HOLDING COMPANY
ANNOUNCES SECOND QUARTER 2021 RESULTS

Glen Allen, Virginia - Hamilton Beach Brands Holding Company (NYSE: HBB) today announced results for the second quarter of 2021.
Highlights
•Revenue increased 11.8% to $154.7 million, driven by strong demand in all markets
•Operating profit decreased to $0.9 million, primarily due to significantly higher transportation costs as a result of disruption and congestion in several areas of the supply chain, and to increased materials and labor costs and higher SG&A expenses
•The company has taken a number of steps to mitigate higher product costs, including price increases that will mostly go into effect in the second half of 2021
•Demand for retail and commercial small appliances is expected to remain strong in 2021 and into 2022
•Ongoing industry-wide pressures in the global supply chain that are affecting importers could have an impact on the Company’s ability to satisfy the anticipated strong demand in the second half of 2021

Second Quarter 2021 Compared to Second Quarter 2020
Total revenue increased 11.8% to $154.7 million compared to $138.3 million. In the US and Canadian markets, consumer demand remained strong and revenue was in line with last year's robust pandemic-driven growth. In the Latin American market, revenue continued to grow, increasing significantly and exceeding expectations. The Mexican and global commercial markets continued to rebound strongly from pandemic-driven demand softness. Revenue in both markets increased significantly and exceeded expectations.
The Company's strategic initiatives continued to play a strong role in revenue performance. Sales through the ecommerce channel accounted for 32% of total revenue even as consumers shopped more in stores compared to the prior year. Sales of the Company's premium products increased 35% and reflected strong growth for the Bartesian® premium cocktail delivery system and the Hamilton Beach® Professional and Wolf Gourmet® countertop appliances brands.
Despite the strong top-line growth, the Company experienced a number of supply chain disruptions and inflationary pressures in the second quarter that affected profitability. Gross profit margin decreased to 18.4%. This compared to the year-ago amount of 25.5%, which was significantly higher than the Company's historical range and the result of strong revenue growth in the US and Canadian markets, tariff relief and other decreased expenses.

In the current quarter, inbound and outbound transportation costs increased significantly. The Company also experienced increased material costs and higher labor expenses, especially for warehouse personnel. The Company has taken steps to mitigate the cost pressures, including price increases effective in June, July and August, that vary by market, and should benefit second-half results more than they did second-quarter results. The Company continues to navigate an increasingly challenging industry-wide supply chain environment, particularly as it relates to transportation and especially ocean freight from China, where its products are manufactured.
Selling, general and administrative expenses increased to $27.5 million compared to $24.0 million. The increase included $1.2 million for costs related to the relocation of the Company's US distribution center. As previously reported, the US distribution center is being relocated from Olive Branch, Miss. to a new facility in Byhalia, Miss. during the second and third quarters. Other contributing factors were higher outside services and personnel-related expenses.
Operating profit was $0.9 million compared to $10.9 million. Net income from continuing operations was $0.1 million, or $0.01 per diluted share, compared to net income from continuing operations of $8.1 million, or $0.59 per diluted share.
During the second quarter, the Company expanded its presence in the large and fast-growing Home Health and Wellness market with the announcement of two strategic partnerships. Hamilton Beach Brands is partnering with The Clorox Company to launch a new line of air purifiers under the Clorox® brand name in the second half of 2021. Through a partnership with HealthBeacon, Limited, the Company is the exclusive marketer and distributor of a smart Injection Care Management System in the US and Canada under the new brand name Hamilton Beach® Health. The Company expects to begin online distribution in the fourth quarter of 2021, starting with a new direct-to-consumer website www.smartsharpsbin.com.

Cash Flow and Debt
Cash flow before financing activities for the six months ended June 30, 2021, which is comprised of cash provided by operating activities and investing activities from continuing operations, was $0.8 million compared to $19.7 million. Capital expenditures were $7.6 million, primarily for investment in the new US distribution center, partially offset by $4.0 million of lease incentives and tenant improvement allowances classified as cash provided by operating activities. Capital expenditures were $1.6 million in the same period last year.
Net working capital increased by $71.8 million and reflected an increase in inventory and trade receivables partially offset by higher accounts payable. Increased inventory is due to the Company's planning for anticipated continued strong consumer demand for its products as well as to ongoing disruptions in the transportation supply chain. Higher trade receivables are mainly attributable to the increased sales in the second quarter of 2021. Net debt, or debt minus cash and cash equivalents, at June 30, 2021 was $98.1 million compared to $40.2 million at June 30, 2020, and $96.0 million at December 31, 2020, and reflects the changes in net working capital. Prior-year net debt was significantly below the Company's historical range as pandemic-driven retail customer and consumer demand depleted inventory.

Outlook
Hamilton Beach Brands was pleased that the top-line momentum of the past two quarters continued in the second quarter of 2021 and expects demand for its retail and commercial products to remain strong across all markets in the second half of the year and into 2022. The Company's brands are healthy and continue to see robust growth. Retail placements and promotions that have been secured for the holiday selling season are strong and underscore the ongoing strong interest in the Company's products from retailers and consumers. The Company expects to continue to benefit from its expansion into the premium and commercial markets and from its strength in the ecommerce channel.
The Company believes the current supply chain challenges are exacerbated by the annual industry inventory building period ahead of the peak holiday selling season and that when the holiday stocking is completed later in the second half of the year the disruptions should begin to moderate. The Company is focused on importing all the inventory possible to meet the strong demand. The main challenge to satisfying demand is the Company's ability to secure supply from China in a timely and efficient manner. The Company may not be able to source all of the product it needs to meet the strong underlying demand at an acceptable transportation cost.

The Company expects to gain a deeper understanding of inflationary pressures and supply chain disruptions as the industry navigates the peak holiday season. The Company plans to provide its outlook for revenue and operating profit for the year when third quarter 2021 results are announced.
Meanwhile, the Company continues to take many steps to manage the near-term supply chain disruptions and mitigate cost pressures, including additional pricing actions that may be needed to cover rising costs while also remaining competitive, working with suppliers to minimize constraints, negotiating with carriers for container space and rates, and collaborating with retail customers. Price increases should provide a significant offset to rising costs, but may not fully offset the increases in the short term depending on the levels of continued cost escalation.
For the longer term, the current challenges are not indicative of the fundamental health of Hamilton Beach Brands' business or its long-term prospects. The Company is a leader in an industry with strong, durable demand. Hamilton Beach Brands expects consumers will continue to cook more at home, due to new habits formed during the pandemic. Household formation by millennials and boomers transitioning to new homes or remodeling are ongoing demographic trends that are expected to continue to drive demand for small kitchen appliances.
Hamilton Beach Brands remains confident in its strategic direction and continues to make progress with its strategic initiatives to drive growth in revenue, expand operating profit margin and generate strong cash flow over time.
The Company plans to further increase its focus on ecommerce and position itself for growth in dollars and share. The Company is supporting growth in the ecommerce channel with a number of digital marketing programs, expansion of its direct-to-consumer distribution operation, and increasing its participation with pure-play and omnichannel customers. For the premium and commercial markets, the Company plans to continue investments in new product development, further strengthen relationships with regional and global chains, and pursue additional partnerships and licensing agreements.
The Company’s leading portfolio of consumer preferred brands and products, which ranges from value to luxury and covers more than 50 categories, is a key competitive advantage. Hamilton Beach Brands expects to introduce approximately 130 new products over the years 2021 and 2022, which should enable the Company to benefit from the expected broad small appliance demand across the cooking and beverage categories.

Conference Call
The Company will conduct an earnings conference call and webcast on Thursday, August 5, 2021, at 9:30 a.m. Eastern time. The call may be accessed by dialing (833) 227-5844 (Toll Free) or (647) 689-4071 (International), Conference ID: 1147735. The conference call will also be webcast live on the Company’s Investor Relations website at www.hamiltonbeachbrands.com. An archive of the webcast will be available on the website.

About Hamilton Beach Brands Holding Company
Hamilton Beach Brands Holding Company is a holding company for Hamilton Beach Brands, Inc., a leading designer, marketer, and distributor of a wide range of branded small electric household and specialty housewares appliances, as well as commercial products for restaurants, fast food chains, bars, and hotels. The Company’s consumer brands include Hamilton Beach®, Proctor Silex®, Hamilton Beach® Professional, Weston®, TrueAir® and Brightline® personal care products. Hamilton Beach licenses the brands for Wolf Gourmet® countertop appliances, CHI® premium garment care products, and Clorox® air purifiers. Hamilton Beach markets the Bartesian® premium cocktail delivery system through an exclusive multiyear agreement. Through a partnership with HealthBeacon, Hamilton Beach is the exclusive marketer and distributor of a smart Injection Care Management System in the US and Canada under the brand name Hamilton Beach® Health. Commercial brands include Hamilton Beach Commercial® and Proctor Silex Commercial®. For more information about Hamilton Beach Brands Holding Company, visit the Company’s website at www.hamiltonbeachbrands.com.

Forward-Looking Statements
The statements contained in this news release 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 include, without limitation: (1) the Company’s ability to ship products to meet the anticipated increase in demand, (2) the Company’s ability to successfully manage the anticipated transportation constraints, (3) the unpredictable nature of the COVID-19 pandemic and its potential impact on the Company's business; (4) changes in the sales prices, product mix or levels of consumer purchases of small electric and specialty housewares appliances, (5) changes in consumer retail and credit markets, including the increasing volume of transactions made through third-party internet sellers, (6) bankruptcy of or loss of major retail customers or suppliers, (7) changes in costs, including transportation costs, of sourced products, (8) delays in delivery of sourced products, (9) changes in or unavailability of quality or cost effective suppliers, (10) exchange rate fluctuations, changes in the import tariffs and monetary policies and other changes in the regulatory climate in the countries in which HBB buys, operates and/or sells products, (11) the impact of tariffs on customer purchasing patterns, (12) product liability, regulatory actions or other litigation, warranty claims or returns of products, (13) customer acceptance of, changes in costs of, or delays in the development of new products, (14) increased competition, including consolidation within the industry, (15) 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, (16) changes mandated by federal, state and other regulation, including tax, health, safety or environmental legislation, (17) difficulties arising as a result of the Company's implementation, integration or operation of an enterprise resource planning system in the US, (18) the Company's ability to successfully remediate the material weaknesses in its internal control over financial reporting disclosed in Item 9A of the Annual Report on Form 10-K within the time periods and in the manner currently anticipated, additional material weaknesses or other deficiencies that may arise in the future or its ability to maintain an effective system of internal controls, (19) the Company's ability to effectively plan and manage the relocation to its new distribution center, and (20) other risk factors, including those described in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K for the year ended December 31, 2020. Furthermore, the situation surrounding COVID-19, including the mutation of variants, remains fluid and the potential for a material impact on the Company’s results of operations, financial condition, liquidity, and stock price increases the longer the virus impacts activity levels in the US and globally. For this reason, the Company cannot reasonably estimate with any degree of certainty the future impact COVID-19 may have on its results of operations, financial position, liquidity and stock price. The extent of any impact will depend on the extent of new outbreaks, the extent to which new shutdowns may be needed, the nature of government public health guidelines and the public’s adherence to those guidelines, the impact of government economic relief on the US economy, unemployment levels, the success of businesses reopening fully, the availability of vaccines for COVID-19, the rate of individuals becoming fully vaccinated, the potential need for fully vaccinated individuals to receive booster shots, consumer confidence and demand for the Company's products.
*****

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
																								
 	THREE MONTHS ENDED
JUNE 30		SIX MONTHS ENDED
JUNE 30	
 	2021	 	2020		2021		2020	
 	(In thousands, except per share data)		(In thousands, except per share data)	
Revenue	$	154,655 			$	138,297 			$	303,904 			$	259,143 		
Cost of sales	126,272 			103,043 			243,828 			198,849 		
Gross profit	28,383 			35,254 			60,076 			60,294 		
Selling, general and administrative expenses	27,447 			24,035 			53,826 			48,248 		
Amortization of intangible assets	50 			324 			100 			648 		
Operating profit	886 			10,895 			6,150 			11,398 		
Interest expense, net	698 			366 			1,418 			969 		
Other expense (income), net	(224)			(193)			(53)			1,509 		
Income (loss) from continuing operations before income taxes	412 			10,722 			4,785 			8,920 		
Income tax expense (benefit)	326 			2,657 			1,823 			2,209 		
Net income (loss) from continuing operations	86 			8,065 			2,962 			6,711 		
Income (loss) from discontinued operations, net of tax	— 			(305)			— 			22,561 		
Net income (loss)	$	86 			$	7,760 			$	2,962 			$	29,272 		
 	 		 					
Basic and diluted earnings (loss) per share:								
Continuing operations	$	0.01 			$	0.59 			$	0.21 			$	0.49 		
Discontinued operations	— 			(0.02)			— 			1.65 		
Basic and diluted earnings (loss) per share	$	0.01 			$	0.57 			$	0.21 			$	2.14 		

	

	
Basic weighted average shares outstanding	13,875 			13,644 			13,865 			13,635 		
Diluted weighted average shares outstanding	13,887 			13,670 			13,881 			13,657 		

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
																		
	JUNE 30
2021		DECEMBER 31
2020		JUNE 30
2020	
 	(In thousands)	
Assets	 		 			
Current assets						
Cash and cash equivalents	$	1,108 			$	2,415 			$	1,616 		
Trade receivables, net	102,898 			144,797 			85,209 		
Inventory	151,728 			173,962 			90,572 		
	
Prepaid expenses and other current assets	18,220 			15,118 			13,358 		
	
Total current assets	273,954 			336,292 			190,755 		
Property, plant and equipment, net	30,319 			23,490 			23,064 		
Goodwill	6,253 			6,253 			6,253 		
Other intangible assets, net	1,792 			1,892 			2,494 		
Deferred income taxes	3,425 			6,965 			5,830 		
Deferred costs	14,192 			13,449 			11,532 		
	
Other non-current assets	3,070 			2,827 			2,673 		
	
Total assets	$	333,005 			$	391,168 			$	242,601 		
Liabilities and stockholders' equity	 		 			
Current liabilities						
Accounts payable	$	99,353 			$	152,054 			$	92,282 		
Accounts payable to NACCO Industries, Inc.	34 			505 			496 		
Revolving credit agreements	— 			— 			41,785 		
Accrued compensation	7,666 			15,981 			11,362 		
Accrued product returns	6,276 			6,853 			7,383 		
Other current liabilities	17,957 			23,677 			15,242 		
	
Total current liabilities	131,286 			199,070 			168,550 		
Revolving credit agreements	99,170 			98,360 			— 		
Other long-term liabilities	19,461 			13,633 			12,499 		
	
Total liabilities	249,917 			311,063 			181,049 		
Stockholders' equity	 					
	
Class A Common stock	102 			100 			99 		
Class B Common stock	41 			41 			41 		
Capital in excess of par value	60,881 			58,485 			56,325 		
Treasury stock	(5,960)			(5,960)			(5,960)		
Retained earnings	45,188 			44,915 			30,528 		
Accumulated other comprehensive loss	(17,164)			(17,476)			(19,481)		
Total stockholders' equity	83,088 			80,105 			61,552 		
Total liabilities and stockholders' equity	$	333,005 			$	391,168 			$	242,601 		

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 	SIX MONTHS ENDED
JUNE 30	
 	2021		2020	
 	(In thousands)	
Operating activities	 	 	 	
Net income (loss) from continuing operations	$	2,962 			$	6,711 		
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by (used for) operating activities:				
Depreciation and amortization	1,847 			1,486 		
Deferred income taxes	3,925 			1,037 		
Stock compensation expense	2,532 			1,817 		
Other	(55)			116 		
Net changes in operating assets and liabilities:				
Affiliate payable	(471)			— 		
Trade receivables	45,150 			19,079 		
Inventory	23,159 			17,222 		
Other assets	(6,824)			(1,462)		
Accounts payable	(53,674)			(18,871)		
Other liabilities	(10,126)			(5,383)		
Net cash provided by (used for) operating activities from continuing operations	8,425 			21,752 		
Investing activities				
Expenditures for property, plant and equipment	(7,616)			(1,592)		

Other	— 			(500)		
Net cash provided by (used for) investing activities from continuing operations	(7,616)			(2,092)		
Financing activities				
Net additions (reductions) to revolving credit agreements	686 			(16,692)		
Cash dividends paid	(2,689)			(2,454)		
Other financing	(163)			— 		
	
Net cash provided by (used for) financing activities from continuing operations	(2,166)			(19,146)		
Cash flows from discontinued operations				
Net cash provided by (used for) operating activities from discontinued operations	— 			(6,193)		
Net cash provided by (used for) investing activities from discontinued operations	— 			6 		
Net cash provided by (used for) financing activities from discontinued operations	— 			— 		
Cash provided by (used for) discontinued operations	— 			(6,187)		
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	78 			1,079 		
Cash, cash equivalents and restricted cash				
Increase (decrease) for the period from continuing operations	(1,279)			1,593 		
Decrease for the period from discontinued operations	— 			(6,187)		
Balance at the beginning of the period	3,436 			7,164 		
Balance at the end of the period	$	2,157 			$	2,570 		
				
Reconciliation of cash, cash equivalents and restricted cash				
Continuing operations:				
Cash and cash equivalents	$	1,108 			$	1,616 		
Restricted cash included in prepaid expenses and other current assets	213 			194 		
Restricted cash included in other non-current assets	836 			760 		
Cash and cash equivalents of discontinued operations	— 			— 		
Total cash, cash equivalents, and restricted cash	$	2,157 			$	2,570