HAMILTON BEACH BRANDS REPORTS MIXED Q3 RESULTS, WITH REVENUE GROWTH AND IMPROVED GROSS PROFIT MARGIN OFFSET BY INCREASED OPERATING EXPENSES AND ONE-TIME PENSION TERMINATION EXPENSE

Hamilton Beach Brands Holding Company reported its financial results for the third quarter and nine months ended September 30, 2024, showing notable changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the three months ended September 30, 2024, total revenue reached $156.7 million, a 2.0% increase from $153.6 million in the same period of 2023. The growth was attributed to a favorable product mix and increased unit volume, particularly in the U.S. and Mexican consumer markets, along with an additional $1.2 million from the acquisition of HealthBeacon. Gross profit for the quarter was $43.9 million, reflecting a gross profit margin improvement to 28.0% from 26.1% year-over-year.

However, operating profit decreased to $10.6 million, down 26.4% from $14.4 million in Q3 2023. This decline was primarily due to a significant increase in selling, general, and administrative (SG&A) expenses, which rose by 29.9% to $33.3 million, driven by higher employee-related costs and expenses associated with HealthBeacon. Net income for the quarter fell sharply to $1.9 million, an 81.3% decrease from $10.3 million in the prior year, influenced by a one-time non-cash pension termination expense of $7.6 million.

For the nine months ended September 30, 2024, revenue increased by 5.3% to $441.2 million, compared to $419.0 million in the same period of 2023. Gross profit for this period was $114.5 million, a 29.5% increase from $88.4 million in 2023, with the gross profit margin rising to 25.9% from 21.1%. Operating profit surged 94.5% to $19.6 million, and net income increased by 19.2% to $6.8 million.

The company completed the acquisition of HealthBeacon PLC on February 2, 2024, for approximately $7.5 million, which contributed $2.6 million in revenue for the nine-month period but also incurred operating losses of $3.7 million. The integration of HealthBeacon is ongoing, with transaction costs of approximately $1.3 million recorded in SG&A expenses.

As of September 30, 2024, total current assets rose to $305.4 million from $286.8 million at the end of 2023, while total liabilities increased to $258.7 million from $237.4 million. The company reported retained earnings of $101.4 million, up from $99.4 million at year-end 2023. The effective tax rate for the third quarter was 27.4%, up from 21.6% in the prior year, attributed to a valuation allowance on foreign losses.

Overall, Hamilton Beach Brands is navigating a complex financial landscape with strategic acquisitions and increased operational costs impacting profitability, while still achieving revenue growth in key markets.