HAMILTON BEACH BRANDS HOLDING CO, 10-Q filed on 11/1/2023
Quarterly Report
v3.23.3
Cover Page - shares
 9 Months Ended
Sep. 30, 2023
Oct. 27, 2023
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2023  
Document Transition Report false  
Entity File Number 001-38214  
Entity Registrant Name HAMILTON BEACH BRANDS HOLDING COMPANY  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 31-1236686  
Entity Address, Address Line One 4421 WATERFRONT DR.  
Entity Address, City or Town GLEN ALLEN  
Entity Address, State or Province VA  
Entity Address, Postal Zip Code 23060  
City Area Code (804)  
Local Phone Number 273-9777  
Title of 12(b) Security Class A Common Stock, Par Value $0.01 Per Share  
Trading Symbol HBB  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Central Index Key 0001709164  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Class A Common stock    
Entity Information [Line Items]    
Entity Common Stock, Shares Outstanding   10,368,143
Class B Common stock    
Entity Information [Line Items]    
Entity Common Stock, Shares Outstanding   3,625,028
v3.23.3
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Current assets      
Cash and cash equivalents $ 1,624 $ 928 $ 1,504
Trade receivables, net 102,178 115,135 97,802
Inventory 160,237 156,038 244,464
Prepaid expenses and other current assets 14,417 12,643 13,295
Total current assets 278,456 284,744 357,065
Property, plant and equipment, net 27,493 27,830 28,363
Right-of-use lease assets 40,590 44,000 44,933
Goodwill 6,253 6,253 6,253
Other intangible assets, net 1,342 1,492 1,542
Deferred income taxes 2,577 3,117 1,800
Deferred costs 14,419 14,348 14,465
Other non-current assets 7,790 7,166 7,432
Total assets 378,920 388,950 461,853
Current liabilities      
Accounts payable 116,124 61,759 111,485
Accrued compensation 11,025 11,310 10,543
Accrued product returns 5,801 6,474 4,651
Lease liabilities 6,136 5,875 5,678
Other current liabilities 12,776 16,150 12,553
Total current liabilities 151,862 101,568 144,910
Revolving credit agreements 51,276 110,895 146,051
Lease liabilities, non-current 43,303 46,801 47,989
Other long-term liabilities 4,659 5,152 4,954
Total liabilities 251,100 264,416 343,904
Stockholders’ equity      
Capital in excess of par value 68,180 65,008 64,117
Treasury stock (10,409) (8,939) (8,939)
Retained earnings 81,362 80,238 74,597
Accumulated other comprehensive loss (11,461) (11,918) (11,971)
Total stockholders’ equity 127,820 124,534 117,949
Total liabilities and stockholders’ equity 378,920 388,950 461,853
Class A Common stock      
Stockholders’ equity      
Common stock 112 107 106
Class B Common stock      
Stockholders’ equity      
Common stock $ 36 $ 38 $ 39
v3.23.3
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Revenue $ 153,614 $ 150,823 $ 418,975 $ 444,701
Cost of sales 113,548 115,979 330,583 349,649
Gross profit 40,066 34,844 88,392 95,052
Selling, general and administrative expenses 25,591 25,425 78,150 67,361
Amortization of intangible assets 50 50 150 150
Operating profit (loss) 14,425 9,369 10,092 27,541
Interest expense, net 592 1,289 2,634 2,889
Other expense (income), net 645 432 390 1,646
Income (loss) before income taxes 13,188 7,648 7,068 23,006
Income tax expense (benefit) 2,848 1,741 1,395 4,837
Net income (loss) $ 10,340 $ 5,907 $ 5,673 $ 18,169
Basic earnings (loss) per share (in dollars per share) $ 0.74 $ 0.43 $ 0.40 $ 1.30
Diluted earnings (loss) per share (in dollars per share) $ 0.74 $ 0.43 $ 0.40 $ 1.30
Basic weighted average shares outstanding (in shares) 14,025 13,869 14,060 13,999
Diluted weighted average shares outstanding (in shares) 14,050 13,892 14,085 14,026
v3.23.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Statement of Comprehensive Income [Abstract]        
Net income (loss) $ 10,340 $ 5,907 $ 5,673 $ 18,169
Other comprehensive income (loss), net of tax:        
Foreign currency translation adjustment (661) (1,144) (182) (3,260)
(Loss) gain on long-term intra-entity foreign currency transactions 0 (14) 653 1,584
Cash flow hedging activity 249 1,963 (1,213) 5,384
Reclassification of foreign currency adjustments into earnings 0 0 0 2,085
Reclassification of hedging activities into earnings 473 210 1,002 78
Pension plan adjustment 0 (4,013) 0 (4,013)
Reclassification of pension adjustments into earnings 73 305 197 414
Total other comprehensive income (loss), net of tax 134 (2,693) 457 2,272
Comprehensive income (loss) $ 10,474 $ 3,214 $ 6,130 $ 20,441
v3.23.3
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Operating activities    
Net income (loss) $ 5,673 $ 18,169
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:    
Depreciation and amortization 3,078 3,552
Deferred income taxes 0 912
Stock compensation expense 3,175 2,533
Brazil foreign currency loss 0 2,085
Other (172) 898
Net changes in operating assets and liabilities:    
Trade receivables 13,678 21,370
Inventory (3,379) (63,328)
Other assets 2,333 5,937
Accounts payable 54,013 (20,150)
Other liabilities (9,716) (12,151)
Net cash provided by (used for) operating activities 68,683 (40,173)
Investing activities    
Expenditures for property, plant and equipment (2,286) (1,560)
Other (150) 0
Net cash provided by (used for) investing activities (2,436) (1,560)
Financing activities    
Net additions (reductions) to revolving credit agreements (59,650) 49,604
Purchase of treasury stock (1,470) (2,979)
Cash dividends paid (4,549) (4,325)
Financing fees paid 0 (47)
Net cash provided by (used for) financing activities (65,669) 42,253
Effect of exchange rate changes on cash, cash equivalents and restricted cash 81 (204)
Cash, cash equivalents and restricted cash    
Increase (decrease) for the period 659 316
Balance at the beginning of the period 1,905 2,150
Balance at the end of the period 2,564 2,466
Reconciliation of cash, cash equivalents and restricted cash    
Cash and cash equivalents 1,624 1,504
Restricted cash included in prepaid expenses and other current assets 24 58
Restricted cash included in other non-current assets 916 904
Total cash, cash equivalents and restricted cash $ 2,564 $ 2,466
v3.23.3
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock
Class A Common stock
Common Stock
Class B Common stock
Capital in Excess of Par Value
Treasury Stock
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning balance at Dec. 31, 2021 $ 102,279 $ 103 $ 40 $ 61,586 $ (5,960) $ 60,753 $ (14,243)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 7,173         7,173  
Issuance of common stock, net of conversions 0 2 (1) (1)      
Share-based compensation expense 764     764      
Cash dividends (1,392)         (1,392)  
Other comprehensive income (loss), net of tax 2,321           2,321
Reclassification adjustment to net income (loss) 2,013           2,013
Ending balance at Mar. 31, 2022 113,158 105 39 62,349 (5,960) 66,534 (9,909)
Beginning balance at Dec. 31, 2021 102,279 103 40 61,586 (5,960) 60,753 (14,243)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 18,169            
Ending balance at Sep. 30, 2022 117,949 106 39 64,117 (8,939) 74,597 (11,971)
Beginning balance at Mar. 31, 2022 113,158 105 39 62,349 (5,960) 66,534 (9,909)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 5,089         5,089  
Issuance of common stock, net of conversions 0 1   (1)      
Share-based compensation expense 1,042     1,042      
Cash dividends (1,478)         (1,478)  
Other comprehensive income (loss), net of tax 582           582
Reclassification adjustment to net income (loss) 49           49
Purchase of treasury stock (1,640)       (1,640)    
Ending balance at Jun. 30, 2022 116,802 106 39 63,390 (7,600) 70,145 (9,278)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 5,907         5,907  
Share-based compensation expense 727     727      
Cash dividends (1,455)         (1,455)  
Other comprehensive income (loss), net of tax (3,208)           (3,208)
Reclassification adjustment to net income (loss) 515           515
Purchase of treasury stock (1,339)       (1,339)    
Ending balance at Sep. 30, 2022 117,949 106 39 64,117 (8,939) 74,597 (11,971)
Beginning balance at Dec. 31, 2022 124,534 107 38 65,008 (8,939) 80,238 (11,918)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) (4,777)         (4,777)  
Issuance of common stock, net of conversions 0 4 (2) (2)      
Share-based compensation expense 797     797      
Cash dividends (1,460)         (1,460)  
Other comprehensive income (loss), net of tax (916)           (916)
Reclassification adjustment to net income (loss) 251           251
Ending balance at Mar. 31, 2023 118,429 111 36 65,803 (8,939) 74,001 (12,583)
Beginning balance at Dec. 31, 2022 124,534 107 38 65,008 (8,939) 80,238 (11,918)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 5,673            
Ending balance at Sep. 30, 2023 127,820 112 36 68,180 (10,409) 81,362 (11,461)
Beginning balance at Mar. 31, 2023 118,429 111 36 65,803 (8,939) 74,001 (12,583)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 110         110  
Share-based compensation expense 962     962      
Cash dividends (1,548)         (1,548)  
Other comprehensive income (loss), net of tax 586           586
Reclassification adjustment to net income (loss) 402           402
Purchase of treasury stock (575)       (575)    
Ending balance at Jun. 30, 2023 118,366 111 36 66,765 (9,514) 72,563 (11,595)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) 10,340         10,340  
Issuance of common stock, net of conversions 0 1   (1)      
Share-based compensation expense 1,416     1,416      
Cash dividends (1,541)         (1,541)  
Other comprehensive income (loss), net of tax (412)           (412)
Reclassification adjustment to net income (loss) 546           546
Purchase of treasury stock (895)       (895)    
Ending balance at Sep. 30, 2023 $ 127,820 $ 112 $ 36 $ 68,180 $ (10,409) $ 81,362 $ (11,461)
v3.23.3
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Statement of Stockholders' Equity [Abstract]            
Cash dividends (in dollars per share) $ 0.11 $ 0.11 $ 0.105 $ 0.105 $ 0.105 $ 0.10
v3.23.3
Basis of Presentation and Recently Issued Accounting Standards
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Recently Issued Accounting Standards Basis of Presentation and Recently Issued Accounting Standards
Basis of Presentation

Hamilton Beach Brands Holding Company (“HBBHC”) is a holding company and operates through its indirect, wholly-owned subsidiary, Hamilton Beach Brands, Inc., a Delaware corporation (“HBB”) (collectively the “Company”). HBB is 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. HBB operates in the consumer, commercial and specialty small appliance markets.

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the remainder of the year due to the highly seasonal nature of the Company’s primary markets. A majority of revenue and operating profit typically occurs in the second half of the calendar year when sales of products to retailers and consumers historically increase significantly for the fall holiday-selling season.

Accounting Standards Adopted

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. The Company previously qualified as an emerging growth company and elected to use the extended transition period for complying with new and revised financial accounting standards. The amendments were effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. On January 1, 2022, the Company adopted Topic 842. The impacts of the adoption were reflected in the Annual Report on Form 10-K for the year ended December 31, 2022. The Company lost the emerging growth company status as of December 31, 2022, the last day of the fiscal year following the fifth anniversary of its spin-off from NACCO Industries, Inc. The Consolidated Balance Sheet as of September 30, 2022 and the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 have been revised to reflect the Company’s adoption of Topic 842 on January 1, 2022.

U.S. Pension Plan Termination

In the second quarter of 2022, the Company began the process of terminating its U.S. defined benefit pension plan (the “Plan”), which could take up to an estimated 24 months to complete. Benefit obligations under the Plan will be settled through a combination of lump sum payments to eligible plan participants and the purchase of a group annuity contract, under which future benefit obligations will be transferred to a third-party insurance company. The Plan continues to be overfunded and the Company expects that there will be no further required minimum contributions to the Plan. We currently expect that all surplus assets remaining after the Plan termination will be transferred to a qualified replacement plan. The deferred loss within Accumulated Other Comprehensive Income will be recognized fully when the plan is terminated or as settlements occur, which would trigger accelerated recognition.
Accounts payable - Supplier Finance ProgramThe Company has an agreement with a third-party administrator to provide an accounts payable tracking system which facilitates a participating supplier’s ability to monitor and voluntarily elect to sell payment obligations from the Company to the designated third-party financial institution. Participating suppliers can sell one or more of the Company’s payment obligations at their sole discretion, and the Company’s rights and obligations to its suppliers are not impacted. The Company has no economic interest in a supplier’s decision to sell one or more of its payment obligations. The Company’s rights and obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by suppliers’ decisions to sell amounts under these arrangements. The payment of these obligations by the Company is included in cash used in operating activities in the Consolidated Statement of Cash Flows. As of September 30, 2023, December 31, 2022 and September 30, 2022, $72.8 million, $23.3 million and $51.2 million, respectively, of the Company’s outstanding payment obligations had been placed in the accounts payable tracking system.
v3.23.3
Transfer of Financial Assets
 9 Months Ended
Sep. 30, 2023
Transfers and Servicing [Abstract]  
Transfer of Financial Assets 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. 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, which are accounted for as sold receivables, 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 $30.7 million and $90.0 million of trade receivables during the three and nine months ending September 30, 2023, respectively, $28.7 million and $81.0 million of trade receivables during the three and nine months ending September 30, 2022, respectively, and $118.5 million during the year ending December 31, 2022. The loss incurred on sold receivables in the consolidated results of operations for the three and nine months ended September 30, 2023 and 2022 was not material. The Company does not carry any servicing assets or liabilities. Cash proceeds from this arrangement are reflected as operating activities in the Consolidated Statements of Cash Flows.
v3.23.3
Fair Value Disclosure
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Disclosure Fair Value Disclosure
The following table presents the Company’s assets and liabilities accounted for at fair value on a recurring basis:
DescriptionBalance Sheet LocationSEPTEMBER 30
2023		 DECEMBER 31
2022		SEPTEMBER 30
2022
Assets:
Interest rate swap agreements
CurrentPrepaid expenses and other current assets$929 $837 $894 
Long-termOther non-current assets4,977 4,539 4,958 
Foreign currency exchange contracts
CurrentPrepaid expenses and other current assets87 174 522 
$5,993 $5,550 $6,374 
Liabilities:
Foreign currency exchange contracts
CurrentOther current liabilities331 101 50 
$331 $101 $50 

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 Secured Overnight Financing Rate (SOFR) 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. The Company also incorporates the effect of HBB 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 value of HBB’s $150.0 million senior secured floating-rate revolving credit facility (the “HBB Facility”), including book overdrafts, which approximate book value, was determined using current rates offered for similar obligations taking into account HBB’s 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 three and nine months ended September 30, 2023.
v3.23.3
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Stockholders’ Equity Stockholders’ Equity
Capital Stock 

The following table sets forth the Company’s authorized capital stock information:
SEPTEMBER 30
2023		DECEMBER 31
2022		SEPTEMBER 30
2022
Preferred stock, par value $0.01 per share
Preferred stock authorized5,000 5,000 5,000 
Preferred stock outstanding— — — 
Class A Common stock, par value $0.01 per share
Class A Common authorized70,000 70,000 70,000 
Class A Common issued(1)(2)
11,126 10,663 10,623 
Treasury Stock766 626 626 
Class B Common stock, par value $0.01 per share, convertible into Class A Common stock on a one-for-one basis
Class B Common authorized30,000 30,000 30,000 
Class B Common issued(1)
3,625 3,844 3,860 

(1) Class B Common converted to Class A Common were 4 and 219 shares during the three and nine months ending September 30, 2023, respectively, and 5 and 140 during the three and nine months ending September 30, 2022.

(2) The Company issued Class A Common of 28 and 244 shares during the three and nine months ending September 30, 2023, respectively, and 26 and 216 shares during the three and nine months ending September 30, 2022.

Stock Repurchase Program: In February 2022, the Company’s Board approved a stock repurchase program for the purchase of up to $25 million of the Company’s Class A Common outstanding starting February 22, 2022 and ending December 31, 2023. During the three and nine months ended September 30, 2023, the Company repurchased 82,676 and 139,649 shares, respectively, at prevailing market prices for an aggregate purchase price of $0.9 million and $1.5 million, respectively. During the three and nine months ended September 30, 2022, the Company repurchased 109,828 and 261,049 shares, respectively, at prevailing market prices for an aggregate purchase price of $1.4 million and $3.0 million, respectively. During the year ended December 31, 2022, the Company repurchased 261,049 shares for an aggregate purchase price of $3.0 million. As of September 30, 2023, the Company had $20.5 million remaining authorized for repurchase.
Accumulated Other Comprehensive Loss: The following table summarizes changes in accumulated other comprehensive loss by component and related tax effects for periods shown:
 Foreign CurrencyDeferred Gain (Loss) on Cash Flow Hedging Pension Plan AdjustmentTotal
Balance, January 1, 2023$(8,924)$4,158 $(7,152)$(11,918)
Other comprehensive income (loss)715 (1,881)— (1,166)
Reclassification adjustment to net income (loss)— 252 87 339 
Tax effects(194)379 (23)162 
Balance, March 31, 2023(8,403)2,908 (7,088)(12,583)
Other comprehensive income (loss)425 (59)— 366 
Reclassification adjustment to net income (loss)— 465 83 548 
Tax effects186 (89)(23)74 
Balance, June 30, 2023(7,792)3,225 (7,028)(11,595)
Other comprehensive income (loss)(661)329 — (332)
Reclassification adjustment to net income (loss)— 648 95 743 
Tax effects— (255)(22)(277)
Balance, September 30, 2023$(8,453)$3,947 $(6,955)$(11,461)
Balance, January 1, 2022$(9,877)$(638)$(3,728)$(14,243)
Other comprehensive income (loss)359 2,691 — 3,050 
Reclassification adjustment to net income (loss)1,267 (126)50 1,191 
Tax effects727 (609)(25)93 
Balance, March 31, 2022(7,524)1,318 (3,703)(9,909)
Other comprehensive income (loss)(726)1,789 — 1,063 
Reclassification adjustment to net income (loss)— (49)109 60 
Tax effects(60)(407)(25)(492)
Balance, June 30, 2022(8,310)2,651 (3,619)(9,278)
Other comprehensive income (loss)(1,164)2,584 (5,294)(3,874)
Reclassification adjustment to net income (loss)— 290 397 687 
Tax effects6 (701)1,189 494 
Balance, September 30, 2022$(9,468)$4,824 $(7,327)$(11,971)
v3.23.3
Revenue
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
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, which includes an estimate for variable consideration.

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, in its discretion, 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. Subject to certain terms and conditions, however, HBB will agree to accept a portion of products sold that, based on historical experience, are estimated to be returned for reasons such as product failure and excess inventory stocked by the customer. 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.
A description of revenue sources and performance obligations for HBB are as follows:

Consumer and Commercial product revenue
Transactions with both consumer and commercial customers generally originate upon the receipt of a purchase order from a 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 a product is shipped from the Company’s facility, or delivered to customers, depending on the shipping terms. The amount of revenue recognized varies primarily with price concessions and changes in returns. The Company offers price concessions to its customers for incentive offerings, special pricing agreements, price competition, promotions or other volume-based arrangements. The Company evaluated such agreements with its customers and determined returns and price concessions should be accounted for as variable consideration.

Consumer product revenue consists 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. A majority of this revenue is in North America.

Commercial product revenue consists of sales of products for restaurants, fast-food chains, bars and hotels. Approximately one-half of the Company’s commercial sales is in the U.S. and the other half is in markets across the globe.

License revenue
From time to time, the Company 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, trade names, patents, trade dress, logos and/or products (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 when the performance obligation is satisfied (over time).

The following table sets forth Company’s revenue on a disaggregated basis for the three and nine months ended September 30:
THREE MONTHS ENDED
SEPTEMBER 30		NINE MONTHS ENDED
SEPTEMBER 30
 2023 202220232022
Type of good or service:
  Consumer products$138,849 $134,813 $374,842 $395,270 
  Commercial products13,159 14,819 40,234 44,992 
  Licensing1,606 1,191 3,899 4,439 
     Total revenues$153,614 $150,823 $418,975 $444,701 
v3.23.3
Contingencies
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies The Company is involved in various legal and regulatory proceedings and claims that have arisen in the ordinary course of business, including product liability, patent infringement, asbestos related claims, environmental and other claims. Although it is difficult to predict the ultimate outcome of these proceedings and claims, the Company believes the ultimate disposition of these matters will not have a material adverse effect on the financial condition, results of operation or cash flows of the Company. Any costs that the Company estimates will be paid as a result of these claims are accrued when the liability is considered probable and the amount of such costs 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.
Proceedings and claims asserted against the Company 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 and on the results of operations and cash flows for the period in which the ruling occurs, or in future periods.

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 current estimates may differ materially from original estimates.        

As of September 30, 2023, December 31, 2022 and September 30, 2022, HBB had accrued undiscounted obligations of $3.4 million, $3.2 million and $3.3 million, respectively, for environmental investigation and remediation activities. HBB estimates that it is reasonably possible that it may incur additional expenses in the range of zero to $1.4 million related to the environmental investigation and remediation at these sites. As of September 30, 2023, HBB has $0.9 million, classified as restricted cash, associated with reimbursement of environmental investigation and remediation costs from a responsible party in exchange for release from all future obligations for one site. Additionally, HBB has a $1.3 million asset associated with the reimbursement of costs associated with two sites.
v3.23.3
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company’s provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.

The effective tax rate was 21.6% and 22.8% on income for the three months ended September 30, 2023 and 2022, respectively. The effective tax rate was lower in the three months ended September 30, 2023 due to a discrete benefit on foreign income in the current year.
The effective tax rate was 19.7% and 21.0% on income for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate was lower for the nine months ended September 30, 2023 due to increased tax benefits from foreign income and credits in the current year. The prior year rate was driven by the reversal of interest and penalties on unrecognized tax benefits partially offset by a valuation allowance on certain foreign deferred tax assets related to the Company’s decision to wind down the Brazilian subsidiary which qualified for substantial liquidation in 2022, which did not recur.
v3.23.3
Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events
NOTE 8—Subsequent Events

On October 27, 2023, HealthBeacon Private Limited Company (“HealthBeacon”), a Dublin-based medical technology firm and strategic partner of HBB, entered Examinership, an Irish statutory framework for restructuring companies in financial difficulty. Upon the appointment of the interim Examiner, HBB entered into a Facility Agreement with HealthBeacon, pursuant to which HBB will make secured loans to HealthBeacon in increments of at least 0.25 million euros, up to a total amount of 1.85 million euros (approximately $2.0 million), to fund its operations during the Examinership. As of November 1, 2023, 0.3 million euros (approximately $0.3 million) was outstanding under the Facility Agreement. No amount was outstanding as of September 30, 2023. The Facility Agreement requires HealthBeacon to repay the loans no later than 120 days after the commencement of the Examinership, unless extended at the sole discretion of HBB.
v3.23.3
Basis of Presentation and Recently Issued Accounting Standards (Policies)
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

Hamilton Beach Brands Holding Company (“HBBHC”) is a holding company and operates through its indirect, wholly-owned subsidiary, Hamilton Beach Brands, Inc., a Delaware corporation (“HBB”) (collectively the “Company”). HBB is 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. HBB operates in the consumer, commercial and specialty small appliance markets.

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

Operating results for the nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the remainder of the year due to the highly seasonal nature of the Company’s primary markets. A majority of revenue and operating profit typically occurs in the second half of the calendar year when sales of products to retailers and consumers historically increase significantly for the fall holiday-selling season.
Accounting Standards Adopted Accounting Standards AdoptedIn 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. The Company previously qualified as an emerging growth company and elected to use the extended transition period for complying with new and revised financial accounting standards. The amendments were effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. On January 1, 2022, the Company adopted Topic 842. The impacts of the adoption were reflected in the Annual Report on Form 10-K for the year ended December 31, 2022. The Company lost the emerging growth company status as of December 31, 2022, the last day of the fiscal year following the fifth anniversary of its spin-off from NACCO Industries, Inc. The Consolidated Balance Sheet as of September 30, 2022 and the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 have been revised to reflect the Company’s adoption of Topic 842 on January 1, 2022.
v3.23.3
Fair Value Disclosure (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table presents the Company’s assets and liabilities accounted for at fair value on a recurring basis:
DescriptionBalance Sheet LocationSEPTEMBER 30
2023		 DECEMBER 31
2022		SEPTEMBER 30
2022
Assets:
Interest rate swap agreements
CurrentPrepaid expenses and other current assets$929 $837 $894 
Long-termOther non-current assets4,977 4,539 4,958 
Foreign currency exchange contracts
CurrentPrepaid expenses and other current assets87 174 522 
$5,993 $5,550 $6,374 
Liabilities:
Foreign currency exchange contracts
CurrentOther current liabilities331 101 50 
$331 $101 $50 
v3.23.3
Stockholders’ Equity (Tables)
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Schedule of Capital Stock
The following table sets forth the Company’s authorized capital stock information:
SEPTEMBER 30
2023		DECEMBER 31
2022		SEPTEMBER 30
2022
Preferred stock, par value $0.01 per share
Preferred stock authorized5,000 5,000 5,000 
Preferred stock outstanding— — — 
Class A Common stock, par value $0.01 per share
Class A Common authorized70,000 70,000 70,000 
Class A Common issued(1)(2)
11,126 10,663 10,623 
Treasury Stock766 626 626 
Class B Common stock, par value $0.01 per share, convertible into Class A Common stock on a one-for-one basis
Class B Common authorized30,000 30,000 30,000 
Class B Common issued(1)
3,625 3,844 3,860 

(1) Class B Common converted to Class A Common were 4 and 219 shares during the three and nine months ending September 30, 2023, respectively, and 5 and 140 during the three and nine months ending September 30, 2022.

(2) The Company issued Class A Common of 28 and 244 shares during the three and nine months ending September 30, 2023, respectively, and 26 and 216 shares during the three and nine months ending September 30, 2022.
Schedule of Accumulated Other Comprehensive Loss The following table summarizes changes in accumulated other comprehensive loss by component and related tax effects for periods shown:
 Foreign CurrencyDeferred Gain (Loss) on Cash Flow Hedging Pension Plan AdjustmentTotal
Balance, January 1, 2023$(8,924)$4,158 $(7,152)$(11,918)
Other comprehensive income (loss)715 (1,881)— (1,166)
Reclassification adjustment to net income (loss)— 252 87 339 
Tax effects(194)379 (23)162 
Balance, March 31, 2023(8,403)2,908 (7,088)(12,583)
Other comprehensive income (loss)425 (59)— 366 
Reclassification adjustment to net income (loss)— 465 83 548 
Tax effects186 (89)(23)74 
Balance, June 30, 2023(7,792)3,225 (7,028)(11,595)
Other comprehensive income (loss)(661)329 — (332)
Reclassification adjustment to net income (loss)— 648 95 743 
Tax effects— (255)(22)(277)
Balance, September 30, 2023$(8,453)$3,947 $(6,955)$(11,461)
Balance, January 1, 2022$(9,877)$(638)$(3,728)$(14,243)
Other comprehensive income (loss)359 2,691 — 3,050 
Reclassification adjustment to net income (loss)1,267 (126)50 1,191 
Tax effects727 (609)(25)93 
Balance, March 31, 2022(7,524)1,318 (3,703)(9,909)
Other comprehensive income (loss)(726)1,789 — 1,063 
Reclassification adjustment to net income (loss)— (49)109 60 
Tax effects(60)(407)(25)(492)
Balance, June 30, 2022(8,310)2,651 (3,619)(9,278)
Other comprehensive income (loss)(1,164)2,584 (5,294)(3,874)
Reclassification adjustment to net income (loss)— 290 397 687 
Tax effects6 (701)1,189 494 
Balance, September 30, 2022$(9,468)$4,824 $(7,327)$(11,971)
v3.23.3
Revenue (Tables)
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Disaggregation of Revenue
The following table sets forth Company’s revenue on a disaggregated basis for the three and nine months ended September 30:
THREE MONTHS ENDED
SEPTEMBER 30		NINE MONTHS ENDED
SEPTEMBER 30
 2023 202220232022
Type of good or service:
  Consumer products$138,849 $134,813 $374,842 $395,270 
  Commercial products13,159 14,819 40,234 44,992 
  Licensing1,606 1,191 3,899 4,439 
     Total revenues$153,614 $150,823 $418,975 $444,701 
v3.23.3
Basis of Presentation and Recently Issued Accounting Standards (Details) - USD ($)
$ in Millions
 3 Months Ended
Jun. 30, 2022
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Defined Benefit Plan Disclosure [Line Items]        
Outstanding payment obligations   $ 72.8 $ 23.3 $ 51.2
Pension Plan | United States        
Defined Benefit Plan Disclosure [Line Items]        
Maximum termination and settlement period 24 months      
v3.23.3
Transfer of Financial Assets (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Transfers and Servicing [Abstract]          
Accounts receivable derecognized $ 30.7 $ 28.7 $ 90.0 $ 81.0 $ 118.5
Loss on sale of accounts receivable $ 0.0 $ 0.0 $ 0.0 $ 0.0  
v3.23.3
Fair Value Disclosure (Details) - USD ($)
$ in Thousands
Sep. 30, 2023
Dec. 31, 2022
Sep. 30, 2022
Letter of Credit | HBB Facility      
Liabilities:      
Line of credit facility, maximum borrowing capacity $ 150,000    
Fair value measurements, recurring      
Assets:      
Assets at fair value 5,993 $ 5,550 $ 6,374
Liabilities:      
Liabilities at fair value 331 101 50
Fair value measurements, recurring | Prepaid expenses and other current assets      
Assets:      
Interest rate swap agreements 929 837 894
Foreign currency exchange contracts 87 174 522
Fair value measurements, recurring | Other non-current assets      
Assets:      
Interest rate swap agreements 4,977 4,539 4,958
Fair value measurements, recurring | Other current liabilities      
Liabilities:      
Foreign currency exchange contracts $ 331 $ 101 $ 50
v3.23.3
Stockholders’ Equity - Schedule of Capital Stock (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
$ / shares
shares
Sep. 30, 2022
$ / shares
shares
Sep. 30, 2023
$ / shares
shares
Sep. 30, 2022
$ / shares
shares
Dec. 31, 2022
$ / shares
shares
Class of Stock [Line Items]          
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01
Preferred stock authorized (in shares) 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Preferred stock outstanding (in shares) 0 0 0 0 0
Class A Common stock          
Class of Stock [Line Items]          
Common stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01
Common stock authorized (in shares) 70,000,000 70,000,000 70,000,000 70,000,000 70,000,000
Common stock issued (in shares) 11,126,000 10,623,000 11,126,000 10,623,000 10,663,000
Treasury Stock (in shares)     766,000 626,000 626,000
Class A Common shares issued (in shares) 28,000 26,000 244,000 216,000  
Class B Common stock          
Class of Stock [Line Items]          
Common stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01
Common stock, convertible conversion ratio 1 1 1 1 1
Common stock authorized (in shares) 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000
Common stock issued (in shares) 3,625,000 3,860,000 3,625,000 3,860,000 3,844,000
Class B Common converted to Class A Common (in shares) 4,000 5,000 219,000 140,000  
v3.23.3
Stockholders’ Equity - Stock Repurchase Program (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Feb. 28, 2022
Class of Stock [Line Items]            
Stock repurchased (in shares) 82,676 109,828 139,649 261,049 261,049  
Aggregate purchase price $ 0.9 $ 1.4 $ 1.5 $ 3.0 $ 3.0  
Remaining authorized repurchase amount $ 20.5   $ 20.5      
Shares Outstanding Class A            
Class of Stock [Line Items]            
Stock repurchase program, number of shares authorized to be repurchased           25,000,000
v3.23.3
Stockholders’ Equity - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Thousands
 3 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance $ 118,366 $ 118,429 $ 124,534 $ 116,802 $ 113,158 $ 102,279
Other comprehensive income (loss) (332) 366 (1,166) (3,874) 1,063 3,050
Reclassification adjustment to net income (loss) 743 548 339 687 60 1,191
Tax effects (277) 74 162 494 (492) 93
Ending balance 127,820 118,366 118,429 117,949 116,802 113,158
Accumulated Other Comprehensive Income (Loss)            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance (11,595) (12,583) (11,918) (9,278) (9,909) (14,243)
Ending balance (11,461) (11,595) (12,583) (11,971) (9,278) (9,909)
Foreign Currency            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance (7,792) (8,403) (8,924) (8,310) (7,524) (9,877)
Other comprehensive income (loss) (661) 425 715 (1,164) (726) 359
Reclassification adjustment to net income (loss) 0 0 0 0 0 1,267
Tax effects 0 186 (194) 6 (60) 727
Ending balance (8,453) (7,792) (8,403) (9,468) (8,310) (7,524)
Deferred Gain (Loss) on Cash Flow Hedging            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance 3,225 2,908 4,158 2,651 1,318 (638)
Other comprehensive income (loss) 329 (59) (1,881) 2,584 1,789 2,691
Reclassification adjustment to net income (loss) 648 465 252 290 (49) (126)
Tax effects (255) (89) 379 (701) (407) (609)
Ending balance 3,947 3,225 2,908 4,824 2,651 1,318
Pension Plan Adjustment            
AOCI Attributable to Parent, Net of Tax [Roll Forward]            
Beginning balance (7,028) (7,088) (7,152) (3,619) (3,703) (3,728)
Other comprehensive income (loss) 0 0 0 (5,294) 0 0
Reclassification adjustment to net income (loss) 95 83 87 397 109 50
Tax effects (22) (23) (23) 1,189 (25) (25)
Ending balance $ (6,955) $ (7,028) $ (7,088) $ (7,327) $ (3,619) $ (3,703)
v3.23.3
Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenue $ 153,614 $ 150,823 $ 418,975 $ 444,701
Consumer products        
Disaggregation of Revenue [Line Items]        
Revenue 138,849 134,813 374,842 395,270
Commercial products        
Disaggregation of Revenue [Line Items]        
Revenue 13,159 14,819 $ 40,234 44,992
Commercial products | Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | United States        
Disaggregation of Revenue [Line Items]        
Concentration risk, percentage     50.00%  
Commercial products | Geographic Concentration Risk | Revenue from Contract with Customer Benchmark | Non-US        
Disaggregation of Revenue [Line Items]        
Concentration risk, percentage     50.00%  
Licensing        
Disaggregation of Revenue [Line Items]        
Revenue $ 1,606 $ 1,191 $ 3,899 $ 4,439
Minimum | Other products        
Disaggregation of Revenue [Line Items]        
Warranty term     1 year  
Maximum | Electric appliances        
Disaggregation of Revenue [Line Items]        
Warranty term     10 years  
Maximum | Other products        
Disaggregation of Revenue [Line Items]        
Warranty term     3 years  
Maximum | Consumer products        
Disaggregation of Revenue [Line Items]        
Revenue contract duration     1 year  
Maximum | Commercial products        
Disaggregation of Revenue [Line Items]        
Revenue contract duration     1 year  
v3.23.3
Contingencies (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2023
USD ($)
numberOfSite
Dec. 31, 2022
USD ($)
Sep. 30, 2022
USD ($)
Loss Contingencies [Line Items]      
Accrual for environmental investigation and remediation activities $ 3.4 $ 3.2 $ 3.3
Portion of loss contingency proceeds representing restricted cash 0.9    
Asset associated with reimbursement of costs $ 1.3    
Loss contingency, number of sites associated with cost reimbursement | numberOfSite 2    
Minimum      
Loss Contingencies [Line Items]      
Estimate of additional expenses $ 0.0    
Maximum      
Loss Contingencies [Line Items]      
Estimate of additional expenses $ 1.4    
v3.23.3
Income Taxes (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Tax Disclosure [Abstract]        
Effective tax rate on income, percent 21.60% 22.80% 19.70% 21.00%
v3.23.3
Subsequent Events (Details) - Secured Debt - Facility Agreement - HealthBeacon
€ in Thousands, $ in Millions
Oct. 27, 2023
EUR (€)
Nov. 01, 2023
EUR (€)
Nov. 01, 2023
USD ($)
Oct. 27, 2023
USD ($)
Sep. 30, 2023
USD ($)
Subsequent Event [Line Items]          
Amount of debt outstanding | $         $ 0.0
Subsequent Event          
Subsequent Event [Line Items]          
Total amount of debt entered into € 1,850     $ 2.0  
Amount of debt outstanding   € 300 $ 0.3    
Debt repayment period 120 days        
Subsequent Event | Minimum          
Subsequent Event [Line Items]          
Total amount of debt entered into | € € 250