Hamilton Beach Brands Holding Company Annual Report 2022

FY2022 Annual Report · Hamilton Beach Brands Holding Company

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Hamilton Beach Brands Holding Company

2022 ANNUAL REPORT

OVERVIEW

About the Company

Hamilton Beach Brands Holding
Company operates through its wholly-
owned subsidiary 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 owned consumer

brands include Hamilton Beach®,
Proctor Silex®, Hamilton Beach
Professional®, Weston®, TrueAir®,
and Hamilton Beach Health®. The
Company’s owned commercial brands
include Hamilton Beach Commercial®
and Proctor Silex Commercial®.

Hamilton Beach Brands licenses
the brands for Wolf Gourmet®
countertop appliances, CHI® premium
garment care products, Clorox® air
purifiers, and Brita® countertop water
appliances.

Through exclusive multiyear

agreements, Hamilton Beach Brands
designs, sells, markets, and distributes
the Bartesian® premium cocktail
delivery system and the Smart Sharps
Bin™ from Hamilton Beach Health®
powered by HealthBeacon®. In early
2024, the Company plans to introduce
new specialty appliances in the retail
and commercial markets as part of a
new collaboration with Numilk®, which
provides raw ingredients that combine

with water to create nondairy milk
products on demand.

Our leading portfolio of iconic

consumer brands ranges from value
to luxury products, across a wide
range of price points. We participate
in more than 50 product categories.

Our brands have a strong presence in
all the retail channels where consumers
buy small kitchen appliances, including
the fast-growing ecommerce channel.

The principal market for our

consumer products is North America,
including the United States, Canada,
Mexico, and Latin America. Our
commercial products are sold globally,
serving food service and hospitality
customers around the world.

Our Portfolio of Leading Brands

CORE BRANDS

PREMIUM BRANDS

HOME HEALTH AND WELLNESS BRANDS

COMMERCIAL BRANDS

Registered Trademarks: Wolf Gourmet® - Sub-Zero Group, Inc.; CHI® - Farouk Systems, Inc.; Bartesian® - the Bartesian company;
Clorox™ - The Clorox Company; Brita® - Brita LP; Numilk® - Plant Tap, Inc.

HAMILTON BEACH BRANDS HOLDING COMPANY

2022 RESULTS

Financial Highlights
Hamilton Beach Brands Holding Company

Income Statement Data

Revenue .......................................................................................................................................

Operating profit .........................................................................................................................

Net income .................................................................................................................................

Basic earnings per share......................................................................................................

Diluted earnings per share ..................................................................................................

Shares outstanding at December 31 ..............................................................................

Balance Sheet Data at December 31

Total assets .................................................................................................................................

Debt ................................................................................................................................................

Stockholders’ equity ...............................................................................................................

Cash Flow Data

(Used for) provided by operating activities ..................................................................

(Used for) investing activities .............................................................................................

Before financing activities ....................................................................................................

(Used for) provided by financing activities ...................................................................

Cash dividends paid ...............................................................................................................

Year Ended December 31

2022

2021

(In thousands, except per share amounts)

640,949

38,794

25,267

1.81

13,881

388,950

110,895

124,534

(3,418)

(2,279)

(5,697)

5,575

5,782

658,394

31,539

21,306

1.54

1.53

13,902

382,504

96,837

102,279

17,857

(11,844)

6,013

(7,266)

5,468

OUR VISION

OUR MISSION

Achieve leadership positions
in retail and commercial
appliances with our consumer-
preferred portfolio of brands
and products.

Deliver profitable
growth from innovative
solutions that improve
everyday living.

ANNUAL REPORT 2022

FROM OUR CEO

To Our Stockholders

During the course of 2022, we
delivered a number of noteworthy
accomplishments as we continued
to advance our mission to deliver
profitable growth from innovative
solutions that improve everyday living.
Our team put in tremendous effort

to realize many successes in the
face of a dynamic and challenging
industry-wide environment. Their
teamwork and commitment to our
Good Thinking® culture enabled us
to mitigate the impact of headwinds,
deliver innovative solutions to our
customers, and continue to be a
leader in our industry.

We believe our performance also
underscores the strength of our
business model and the value of our
portfolio of trusted and well-known
brands and products.

As we entered 2022, industry
demand was expected to be higher
than pre-pandemic levels but
slightly softer than 2021. As the

year unfolded, demand softened
more than expected as retailers
and consumers adjusted spending
patterns to inflationary pressures
and economic concerns.

Rapidly rising product and
transportation costs created the
need to work closely with our retail
customers to implement necessary
price increases, something we never
take lightly and is never easy.

Pandemic-driven congestion

throughout the supply chain persisted.
Early in the year, inventory levels
were elevated due to delayed
deliveries resulting from extended
lead times and transit times. As the
year unfolded, our products sold
well at retail, but retailers’ overstock
levels in other areas had an impact
on our reorders overall and inventory
continued to build, along with our
debt, to higher than desired levels.

Thanks to our extraordinary

team, we managed inventory levels

STRATEGIC INITIATIVES FOR LONG-TERM GROWTH

effectively during the year. By the
end of the year, we had significantly
reduced inventory and debt levels
and entered 2023 with a clean
inventory position at retail. We have
more progress to make, but we are
positioned to return to a more normal
inventory and debt position in 2023
as years of Covid-related supply chain
disruptions have mostly subsided.

During the course of
2022, we delivered a
number of noteworthy
accomplishments.

For the full year, our total revenue
was $641 million, the second highest
in our history, and only a modest
decrease from record revenue
in 2021, which benefited from
government stimulus spending in
the U.S. Revenue was below our
expectation of modest growth due
to lower unit volume in our U.S.,
Canadian and Latin American
markets. Price increases and favorable
product mix partially offset these
volume decreases.

Our global commercial market
revenue increased 50% due to
robust post-Covid demand recovery
in the food service and hospitality
industries as well as to our growth
initiatives. The sale of premium
products also increased as did our
sales in the ecommerce channel.
Operating profit was well

ahead of 2021, increasing 23% to
$38.8 million, including a one-time
insurance recovery. We managed
gross profit margin well and held

HAMILTON BEACH BRANDS HOLDING COMPANYCORE GROWTH

HAMILTON BEACH® NEW PRODUCTS

Wave-Action®
Quiet Blender

10-Cup Stack & Snap™ Bowl
Scraper Food Processor

Breakfast Sandwich
Maker, Silver

One Press® 12-ounce
Dispensing Coffee Maker

close to the prior year as our price
increases partially offset higher
costs. We also managed our
expenses well and ended the
year below prior-year levels.

We are benefiting from significant
recent investments in infrastructure.
We will continue to realize the
many advantages of our new ERP
system for years to come. Our new
distribution centers in the U.S.
and Canada have attained high
efficiency levels.

We are committed to conducting

our business in a manner that is
environmentally responsible. Our
employee-led sustainability team
focuses on innovative solutions that
minimize environmental impact. We
have reduced our use of corrugated
packing materials and single-use
polybags. We continue to search for
ways to use more environmentally

friendly packaging materials,
including recycled materials, as
well as ways to increase product
lifetime and reduce waste at the
end of product life.

In 2022, our Board increased our
regular quarterly dividend, as they
have every year since we became
a public company in 2017, continuing
our history of returning cash
to shareholders. We paid a total
of $5.8 million in dividends and
repurchased 261,049 shares
of our Class A common stock.

Strategic Initiatives

We continue to make significant

progress with our six strategic
initiatives, which are designed to
increase revenue, expand operating
margin, and deliver strong cash flow
over time. The following is a summary
of key accomplishments in 2022.

DRIVE GROWTH OF
OUR FLAGSHIP BRANDS
IN OUR CORE NORTH
AMERICAN MARKET

A key to our continued success is
our ability to leverage our trusted, well
recognized flagship brands, Hamilton
Beach® and Proctor Silex® in the North
American marketplace where they have
competed successfully for over 100
years. Our two core brands provide
sustainable competitive advantage.
Consumers know and trust them.

While sales of our Hamilton Beach®
and Proctor Silex® brands decreased
slightly in 2022, we outperformed the
small kitchen appliances industry and
many of our peers and gained market
share in North America.

Our product development teams
delivered 40 new consumer product
platforms in high-demand categories,
32 for Hamilton Beach® and eight for

ANNUAL REPORT 2022CORE GROWTH CONTINUED

PROCTOR SILEX® NEW PRODUCTS

Sound Shield
Coffee Grinder

Steam Iron with
Retractable Cord

6-Quart Double Dish
Slow Cooker

Proctor Silex®. For Hamilton Beach®,
we continued to bring this brand’s
“Cook with Confidence” positioning
to life with our target consumer.
Hamilton Beach® continued to hold
the number one brand position for
small kitchen appliances in the U.S.
based on units sold.

We also continued to reposition

our Proctor Silex® brand as
“Simply Better.”

GAIN SHARE IN THE
PREMIUM MARKET

Our premium brand revenue

increased 16% in 2022 and
accounted for 15% of total revenue.

Sales of Bartesian® premium
cocktail machines continued to
increase significantly. We launched
a Duet machine for consumers and
a Bartesian® Professional model for
commercial customers. It has been
exciting to partner with Bartesian
on the creation and fast growth of
this new category. The popularity
of this product line is supported by
Bartesian’s continued development
of 50+ cocktail flavor capsules.

The CHI® brand continues to

grow in sales and share of the
garment care category and has
established itself as a leading
premium brand. Our newest CHI®
products include a mini-iron and
full-sized handheld steamer.

Our strategic initiatives
are designed to increase
revenue, expand operating
margin and deliver strong
cash flow over time.

Our Hamilton Beach Professional®

line leverages our commercial
products expertise for the benefit
of home cooks. The portfolio now
includes 14 high-demand categories.
We are focused on building the
brand in the ecommerce channel.
We continue to drive increased

sales of our Weston® products
that are targeted to hunters and

gardeners, by maximizing online
growth, increasing distribution in
the sporting goods channel, and
launching new products in the
preservation, processing, and prep
categories. In 2022, we introduced
a Weston® 2-in-1 Indoor Smoker and
Slow Cooker that has sold well.

The Wolf Gourmet® luxury brand
now covers 10 high-demand categories
and continues to generate steady sales.
Hamilton Beach and the Magnolia

Bakery teamed up to create a
premium hand mixer that offers a
unique design and a powerful DC-
motor for superior performance.
This charming mixer pairs well with
the famous bakery’s cookbooks.
In early 2023, we announced
an agreement with Numilk, a provider
of raw ingredients to combine
with water and create non-dairy
milk products known for their
excellent taste. We are designing
the next-generation specialty
appliances for use with Numilk® in
consumer and commercial markets.
We expect to launch the new
appliances in early 2024.

HAMILTON BEACH BRANDS HOLDING COMPANYLEAD IN THE GLOBAL
COMMERCIAL MARKET

Our revenue in the global commercial
market increased 50% and accounted
for 10% of total revenue.

Sales of our food service products
and hotel amenities grew significantly.
This growth is due to strong post-
pandemic demand recovery and
to our success in expanding our
category coverage over the past
several years.

We believe our
performance also
underscores the strength
of our business model
and the value of our
portfolio of trusted and
well-known brands.

We continue to develop products
that create a competitive advantage
in our core blending and mixing
categories while expanding into back-
of-house categories that are new to
us. As part of our growth strategy, we
have increased our focus on regional
and global chains.

We are also investing in longer
term strategies such as ecommerce,
digital marketing, and the expansion
of international markets.

EXPAND IN THE HOME HEALTH
AND WELLNESS MARKET

We have taken many steps to
expand our participation in the large
and fast-growing home health and
wellness market. These include
introducing new products in the air
purification, water filtration, and home
medical markets.

We have expanded our participation

in the air purifier category through
an exclusive multiyear trademark
licensing agreement with The Clorox
Company. In 2022, we launched a
new line of six Clorox™ True HEPA
air purifiers. These include tabletop,
medium-room and large-room sizes
and models that work with Alexa®. In
2023, we are adding an extra-large
room size model.

We are also creating a new
category with a Clorox™ Steam
Sanitizer that consumers can use
in their kitchen to quickly sanitize
a number of items that still have a
useful life.

We signed a trademark licensing

agreement in 2022 with Brita LP,
the leader in at-home water filtration
solutions. We have designed a new
electric countertop water filtration
system, creating a new category of
easy-to-use appliances for consumers
to access clean, great tasting water
from their tap while reducing plastic
bottle waste. In early 2023, we
introduced the innovative Brita Hub™
electric countertop water appliance.

In the home medical market,
we introduced the Smart Sharps
Bin™ from Hamilton Beach Health®
powered by HealthBeacon® for at-
home injection care management
in the U.S. in 2022. We laid the
groundwork for new distribution,
including securing agreements with
specialty pharmacies, which should
drive adoption in 2023. The system
is now FSA, HSA, Medicare, and
Medicaid eligible.

There are two revenue streams,

one from the appliance sale and
the second from subscriptions
that use a companion app to help
patients manage adherence to their
personal medication regimen. Our
partner HealthBeacon is a global

PREMIUM BRANDS

PREMIUM NEW PRODUCTS

Weston® 2-in-1 Smoker
and Slow Cooker

Hamilton Beach Professional®
Cast Iron Electric Griddle

CHI® Full-Sized
Handheld Steamer

Bartesian® Professional Premium
Cocktails on Demand

ANNUAL REPORT 2022HOME HEALTH AND WELLNESS BRANDS

leader in digital technology. We are
exploring additional opportunities
to collaborate with HealthBeacon in
the at-home medical adherence and
monitoring market.

ACCELERATE OUR DIGITAL
TRANSFORMATION

The ecommerce channel

accounted for 38% of total revenue
and increased 3% after very strong
growth of 22% in 2021. This growth
reflects our strong presence across
ecommerce platforms. All of our
brands earned star ratings of 4.3
or higher, and five of our ten brands
were 4.5 or higher.

We continue to invest in gaining

share in the ecommerce channel
for both consumer and commercial
products. We collaborate closely
with our omnichannel and online-only
retail customers to leverage the fast-
paced changes in ecommerce

to increase awareness and sell-
through of our products.

For all of our brands, we have
increased our digital marketing
support. This includes enhancing
online content and video to engage
shoppers, expanding search
optimization, and increasing social

I am confident that we
are stronger than ever
and well positioned to
build on the successes
we have achieved.

media advertising and influencer
campaigns, all of which strengthens
our brands and drives sales.

Our new U.S. distribution center
includes a state-of-the art capability

to ship small packages directly
to consumers in partnership with
retail customers.

LEVERAGE PARTNERSHIPS
AND ACQUISITIONS

Over the past several years,
we have entered into a number of
exclusive agreements with outstanding
business partners combining our
strengths with advantages provided
by other companies. As a result, we
have entered new large and fast-
growing markets and, in some cases,
created new categories. Many of our
collaborations enable us to serve both
retail and commercial customers.
The opportunity for additional
partnerships is strong, given
the appeal of our sourcing,
engineering, distribution, and
marketing strengths. We will
pursue acquisitions when valuations
and strategic fit are compelling.

HOME HEALTH AND WELLNESS NEW PRODUCTS

Brita Hub™ Electric Countertop
Water Filtration Appliance

Clorox™ Extra Large Room
True HEPA Air Purifier

Smart Sharps Bin™ from Hamilton Beach
Health® powered by HealthBeacon®

HAMILTON BEACH BRANDS HOLDING COMPANYCOMMERCIAL BRANDS

COMMERCIAL NEW PRODUCTS

Summit® Edge High-Performance Blender

MixStation™ Heavy-Duty Drink Mixer

drawn from a broad diversity of
experience and knowledge. Their
engagement and support are
invaluable to our success.

We thank our shareholders for their

investment. We believe we are on
track to create long-term value for all
of our stakeholders.

Gregory H. Trepp
President and
Chief Executive Officer
March 9, 2023

communities in which we live.
Our culture is built on and centered
around Good Thinking®, which
incorporates teamwork, service
and inspired thinking in all areas
of our business. We believe that
our values-based culture is a core
strength that provides the foundation
for our working environment and our
employees. Good Thinking® is more
than developing new products, it
inspires everything we do.

On behalf of our Board of Directors
and our executive team, I want to
thank our employees for their many
contributions to our success and for
continuing to be trusted partners
for our customers. I also thank our
customers, suppliers and business
partners for their outstanding
collaboration and support of our
brands and products.

I am deeply grateful to our
committed Board of Directors, who
share their wisdom and guidance

Looking Ahead

As 2023 unfolds, the retail
marketplace is uncertain in the
face of rising interest rates and
their potential impact on consumer
spending. Demand for small
kitchen appliances is expected to
be moderately softer than in 2022,
especially in the first half of the
year. Our commercial business is
expected to remain strong.

Product costs and transportation

expenses have been moderating
as inflationary pressures decrease.
We are working with our retail
partners on appropriate rollbacks
of previous price increases in ways
that will keep us competitive while
protecting margins.

I am confident that we are stronger
than ever and well positioned to build
on the successes we have achieved.
Our investments in infrastructure,
combined with our asset light model,
as well as net working capital
returning to historical ranges, and
continued progress with our strategic

We believe we are on
track to increase long-
term value for all of
our stakeholders.

initiatives should enable us to
resume generating strong cash flow
and higher returns on total capital
employed in the coming years.
Our business is focused on

people—our employees, our
customers and the consumers
who enjoy our appliances, and the

This Annual Report to Stockholders contains forward-looking statements. For a discussion of the Risk Factors that may cause the Company’s actual
results to differ from these forward-looking statements, please refer to page 5 in the enclosed Form 10-K for the year ended December 31, 2022.

ANNUAL REPORT 2022HAMILTON BEACH BRANDS HOLDING COMPANY

8 Directors and Officers

DIRECTORS

Mark R. Belgya
Retired Vice Chair and Chief Financial Officer,
The J. M. Smucker Company

J.C. Butler, Jr.
President and Chief Executive Officer,
NACCO Industries, Inc.

President and Chief Executive Officer,
North American Coal Corporation

Paul D. Furlow
Co-Founder/Co-President,
Dixon Midland Company

John P. Jumper
Former Chairman and CEO,
Leidos Holdings, Inc.

Retired Chief of Staff,
United States Air Force

Dennis W. LaBarre
Retired Partner,
Jones Day

Michael S. Miller
Retired Managing Director,
The Vanguard Group

OFFICERS

Gregory H. Trepp
President and Chief Executive Officer

Sally M. Cunningham
Senior Vice President,
Chief Financial Officer and Treasurer
(effective March 17, 2023)

Alfred M. Rankin, Jr.
Non-Executive Chairman,
Hamilton Beach Brands Holding Company

Chairman and Chief Executive Officer,
Hyster-Yale Materials Handling, Inc.

Non-Executive Chairman,
NACCO Industries, Inc.

Thomas T. Rankin
Retired Owner and President,
Cross Country Marketing

James A. Ratner
Partner,
RMS Investment Group, LLC

Gregory H. Trepp
President and Chief Executive Officer,
Hamilton Beach Brands Holding Company

President and Chief Executive Officer,
Hamilton Beach Brands, Inc.

Clara Williams
President and Founder,
The Clara Williams Company

R. Scott Tidey
Senior Vice President,
Global Sales
Hamilton Beach Brands, Inc.

Lawrence K. Workman, Jr.
Senior Vice President,
General Counsel and Secretary

HAMILTON BEACH BRANDS HOLDING COMPANYUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K

(Mark One)

☑

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

For the fiscal year ended December 31, 2022

or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .

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
Class A Common Stock, Par Value $0.01 Per Share

Trading Symbol
HBB

Name of each exchange on which registered
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 þ No ¨

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

¨ Smaller reporting

Non-accelerated filer
(Do not check if a smaller reporting company)

company

☑ 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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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, 2022 (the last business day of the
registrant's most recently completed second fiscal quarter): $84,623,678

Number of shares of Class A Common Stock outstanding at March 3, 2023: 10,274,263
Number of shares of Class B Common Stock outstanding at March 3, 2023: 3,629,264

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for its 2023 annual meeting of stockholders are incorporated herein by reference in Part III of this Form 10-K.

HAMILTON BEACH BRANDS HOLDING COMPANY
TABLE OF CONTENTS

PART I.

PART II.

Item 1.

BUSINESS

Item 1A. RISK FACTORS

Item 1B. UNRESOLVED STAFF COMMENTS

Item 2.

PROPERTIES

Item 3.

LEGAL PROCEEDINGS

Item 4. MINE SAFETY DISCLOSURES

PAGE

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER

PURCHASES OF EQUITY SECURITIES

Item 6.

RESERVED

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

Item 9A. CONTROLS AND PROCEDURES

Item 9B. OTHER INFORMATION

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Item 11. EXECUTIVE COMPENSATION

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED

STOCKHOLDER MATTERS

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART III.

PART IV.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

SIGNATURES

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

F-1

Table of Contents

Item 1. BUSINESS

General

PART I

Hamilton Beach Brands Holding Company (“Hamilton Beach Holding” or the “Company”) is a holding company and operates
through its wholly-owned subsidiary Hamilton Beach Brands, Inc. (“HBB”). HBB is the Company's single reportable segment.

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

The Company also previously operated through its former wholly-owned subsidiary, The Kitchen Collection, LLC ("KC"),
which is reported as discontinued operations in all periods presented herein. KC completed its dissolution on April 3, 2020 with
a pro-rata distribution of its remaining assets to creditors, at which time the KC legal entity ceased to exist.

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.

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.

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 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 air fryers, blenders, coffee makers, food processors, indoor electric grills, irons, juicers, mixers, slow cookers, toasters
and toaster ovens. HBB also designs, markets and distributes commercial products for restaurants, fast food chains, bars and
hotels. HBB generally markets its “good” and “better” consumer products under the Hamilton Beach® and Proctor
Silex® brands. HBB participates in the premium market with its owned brands Hamilton Beach® Professional and Weston®
farm-to-table and field-to-table food processing equipment. Additionally, the Company participates in the premium market
through multiyear licensing agreements to market and distribute a line of countertop appliances under the Wolf
Gourmet® brand, a line of premium garment care products under the CHI® brand and the Bartesian® premium cocktail
delivery system. The Company continues to expand in the home, health and wellness market, selling air purifiers under the
Clorox® and TrueAir® brands, Hamilton Beach® Health smart Injection Care Management Systems, and Brita® water
filtration systems. 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 in categories such as microwave ovens, among others. Sales promotion activities are supported through print
and digital marketing vehicles. HBB promotes certain of its innovative products primarily through the use of digital and print
advertising.

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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. Walmart Inc. and its global subsidiaries accounted for approximately 26%, 28%
and 35% of HBB’s revenue in 2022, 2021 and 2020, respectively. Amazon.com, Inc. and its subsidiaries accounted for
approximately 23%, 22% and 16% of HBB's revenue in 2022, 2021 and 2020, respectively. HBB’s five largest customers
accounted for approximately 61%, 61%, and 64% of HBB’s revenue for the years ended December 31, 2022, 2021 and 2020,
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 borrowings under our revolving
credit facility 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.

Product Design and Development

HBB incurred $11.8 million, $8.6 million and $10.0 million in 2022, 2021 and 2020, respectively, on product design and
development activities.

Key Suppliers and Raw Material

HBB’s products are produced to its specifications by third-party suppliers. HBB does not maintain long-term purchase contracts
with suppliers and operates mainly on a purchase order basis. HBB negotiates the purchases from its foreign suppliers in U.S.
dollars.

During 2022, HBB purchased substantially all of its finished products from suppliers in China. HBB purchases its inventory
from approximately 65 suppliers, one of which represented more than 10% of purchases during the year ended December 31,
2022. 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

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. HBB competes with many manufacturers
and distributors of housewares products. 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 for brand reputation through compelling content, strong ratings and reviews from consumers.

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To meet these competitive challenges, the Company has focused on continued innovation in its leading brands as well as
expanding into new categories using existing core competencies. HBB’s presence in a significant number of product categories
across various price points allows the Company to meet the needs of a wide range of retailers and consumers. Based on
publicly available information about the industry, HBB is one of the largest full-line distributors and marketers of small electric
household and specialty housewares appliances in North America, including the U.S., Canada, Mexico and Latin America,
based on key product categories. Hamilton Beach® is the #1 small kitchen appliance brand in the US, in brick-and-mortar and
ecommerce channels, based on units sold.

To a lesser degree, HBB retail product lines compete outside of North America. HBB's commercial products compete globally
and have generated a strong position in these markets.

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 design its products 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
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 each of the years ended December 31, 2022, 2021, and 2020.

Human Capital Resources

Our business is dependent upon, and focused on, people—our employees, our customers and the consumers who enjoy our
appliances, and the communities in which we live. Our culture is built on and centered around Good Thinking ®, which
incorporates teamwork, service and inspired thinking into all areas of our business. We believe that this values-based culture is
a core strength that provides the foundation for our working environment and our employees. Good Thinking ® is more than
developing new products; it inspires everything we do.

Within this culture, our people are our most valuable resource, and we expect them to remain the key to our success for decades
to come. We strive to create an environment that attracts, engages and develops the talent necessary to enable our performance
and growth, including by offering competitive compensation and benefits, providing attractive professional growth
opportunities, and insisting that everyone be treated with dignity and respect and be afforded equal opportunity. We also
recognize the basic human need to feel a sense of inclusion, belonging, and meaning. So, we strive to foster an environment in
which our people are passionate about our business and our Good Thinking ® culture, have a seat at the table, and genuinely
believe that they are doing meaningful work. We believe that employees with diverse backgrounds, experiences and
viewpoints bring value to our Company, especially when coupled with a strong culture of trust in which competing ideas are
not only allowed but encouraged to emerge. We strongly believe that this type of environment drives discretionary effort,

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morale, creativity, initiative and retention—and, in turn, long-term competitive advantage and value creation. Within the
framework of our Good Thinking ® culture, we operate as One Team and strive to enrich the lives of our customers and
consumers by delivering innovative solutions that improve everyday living, all while having a positive, lasting impact on our
people and the communities in which we operate.

We are committed to achieving the highest standards of legal and ethical conduct, including by protecting the human rights and
fair treatment of our employees. Our policies and programs—including our Code of Corporate Conduct and other compliance
policies, our employment-related policies, and our Human Rights Policy—are designed to support this effort.

As of December 31, 2022, the Company employed approximately 700 employees in four countries—Canada, China, Mexico,
and the United States, of which approximately 95% were full time and the remaining were part time. Approximately 3% of our
workforce is covered by collective bargaining agreements, all of whom are based in Canada or Mexico. There are
approximately 500 employees in the United States with about half of those based at the Company’s headquarters in Richmond,
Virginia, which is home to the Company’s product design, development and marketing teams as well as its state-of-the-art test
kitchen and UL-certified test laboratory. Most of the remaining employees in the United States support the operation of our
Byhalia, Mississippi distribution centers. We consider employee relations to be good.

Occupational Health and Safety

One of our top priorities is protecting the health and safety of our workforce. We are committed to maintaining a safe work
environment and operating in a safe, secure and responsible manner. We require all Company personnel to perform their work
in a manner that complies with legal requirements protecting the safety and health of all persons from unreasonable risks. In
addition to maintaining property and equipment in safe operating conditions, our occupational health and safety framework
includes certain safety training programs and safety-related processes and procedures as we strive to ensure the health and
safety of our workforce. Employees are encouraged to initiate safety improvements, participate in safety committees, and
always reinforce safe behaviors.

Talent Acquisition, Development and Retention

The long-term success and growth of our business depend in large part on our ability to execute an effective talent strategy that
attracts, engages and grows a highly talented and committed workforce capable of enabling and leading our performance. To
meet our talent objectives, we utilize key strategies and processes related to recruitment while we remain focused on continuing
to strengthen our onboarding and ongoing learning development. We monitor market compensation and benefits to be able to
attract, retain and promote employees and reduce turnover and its associated costs. Through our total rewards programs, we
strive to offer competitive compensation, benefits and services to our full-time employees including, incentive plans,
recognition plans, defined contribution plans, healthcare benefits, tax-advantaged spending accounts, employee assistance
programs and other programs such as sick leave and paid vacation and holidays.

We are a learning organization committed to the goal of continuous improvement and the development of our workforce. To
empower our employees to reach their full potential, we offer certain training, learning experiences and resources, such as
“Hamilton Beach University”—an ongoing, cross-functional learning program designed not only to help employees learn about
our Company, our products and our industry but also to stay abreast of emerging trends and to develop job-specific skills.

Diversity and Inclusion

As an equal opportunity employer, we make decisions without regard to race, color, religion, creed, gender, sexual orientation,
gender identity, marital status, national origin, age, veteran status, disability, or any other protected class. We strive to cultivate
diversity of perspective in our workforce and believe teammates with diverse backgrounds, experiences and viewpoints bring
value to our organization and improve our Good Thinking ® and, in turn, our decision-making. We strive to create a workplace
in which employee differences are embraced and competing perspectives are encouraged to emerge, allowing robust
collaboration and teamwork to drive better decision making and more favorable results for all stakeholders. All employees
participate in training intended to enhance our awareness of the benefits of a diverse and inclusive workforce, to encourage
more meaningful collaboration, and to strengthen team effectiveness.

COVID-19

Throughout the pandemic we have monitored the changing landscape of local requirements and guidelines for all locations and
have made changes to our workplace protocols as necessary. We continue to monitor diligently the developments related to
COVID-19 and to adjust as needed to perform our business requirements while providing a safe environment for our workforce.

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We have been impressed by the resiliency and adaptability demonstrated by our employees throughout the pandemic. We
believe that their ability to remain flexible and to work productively and collaboratively and, in many cases, remotely during
such stressful and unpredictable times is a testament to the strength of our Good Thinking® culture. We also believe that the
pandemic-related challenges have strengthened us and that we now are better positioned to adjust work locations and patterns if
other disruptive events were to occur.

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 March 9, 2023, 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

R. Scott Tidey

Senior Vice President, Global Sales of HBB (from
January 2023)

President and Chief Executive Officer of Hamilton
Beach Holding (from September 2017); President and
Chief Executive Officer of HBB (from prior to 2017)

Chief Executive Officer of KC (from prior to 2017 to
April 2020)

Senior Vice President, Consumer Sales & Marketing of
HBB (from March 2021 to January 2023), Senior Vice
President, North America Sales and Marketing of HBB
(from prior to 2017 to March 2021)

Director of Fahrenheit Advisors, LLC (from April 2019
to March 2020), Senior Manager of Financial Planning
and Analysis, Global Commercial Operations of
Indivior, Inc. (from September 2017 to March 2019)

Vice President, Business Development and Corporate
Counsel of Coca-Cola Consolidated, Inc. (from prior to
2017 to July 2021)

Linda Woermer

Senior Director, Controller of HBB (from April 2020)

Lawrence K. Workman, Jr.

Senior Vice President, General Counsel and Secretary of
Hamilton Beach Holding (from July 2021)

Item 1A. RISK FACTORS

Industry Risks

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.
Additionally, in periods of uncertain economic conditions, such as inflation, rising interest rates, recessions or economic
slowdowns, HBB's customers may purchase less of our products as they manage their inventory levels to adjust to changes in
consumers’ spending habits in response to such economic conditions. These circumstances could adversely impact our revenue
and profitability.

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:

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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.

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 the industry and 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 from which to choose. 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
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

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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 utilizing ecommerce channels that consumers
may prefer, we may experience a loss in market share and decreased revenue and profitability.

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.

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. Declines in consumer spending or a shift in consumer spending away from small
electric household and specialty housewares appliances may significantly reduce demand for our products and reduce orders
from retailers for our products, which could lead to increased inventories. Additionally, this may result in lower sales volume,
higher price concessions, and lower gross margins.

In addition, the retail market for small electric household and specialty housewares appliances is 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.

Business Risks

Uncertain or unfavorable global economic conditions may have an adverse effect on our business, operating results and
financial condition.

Our business has in the past been, and may continue to be, adversely affected by changes in global economic conditions
including inflation, rising interest rates, consumer spending rates, availability and costs of raw materials, and availability of
capital markets. Further, the negative impacts from the COVID-19 pandemic and its downstream impacts, as well as the
ongoing war in Ukraine could negatively impact our business, financial condition, results of operations and cash flows.
Inflationary pressures negatively impacted our net revenues, operating margin and net income in fiscal year 2022.

Factors that are largely beyond HBB's control, such as inflation and commodity prices for the raw materials needed by suppliers
of HBB’s products, may affect the cost of products. While, historically, the costs of our products have fluctuated, we
experienced higher than expected product costs during 2022, largely due to cost pressures resulting from economic conditions.
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. In
addition, due to ongoing global supply chain challenges, the Company experienced increased transportation costs which have
negatively impacted our results in 2022, and could continue to adversely affect our operating results in the future.

Although we take measures to mitigate the impact of increased product and transportation costs through pricing, if inflationary
pressures are sustained, or if pricing strategies are ineffective or are not implemented in a timely manner, we may only be able
to recover a portion of our increased costs in future periods which may have a material adverse effect on our businesses,
financial condition, results of operations and cash flows. Our ability to raise prices to reflect increased costs may also be
limited by competitive conditions in the market for our products. Conversely, because our sales are at prices that are based

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upon product and transportation costs, our operating profit may be negatively impacted during periods of product cost deflation
even though our gross profit as a percentage of net sales may remain relatively constant. If these pressures continue, our
revenue, operating margins and net income may continue to be negatively impacted in fiscal year 2023.

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.

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.

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's
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 a majority of suppliers are based in China, international operations are subject to additional risks including,
among others:

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•
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currency fluctuations;

labor unrest;

potential political, economic and social instability, including the repercussions of the conflict in Ukraine;

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;

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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.

Our financial results may be negatively impacted by transportation constraints on shipping capabilities.

Our ability to meet customers’ demands depends, in part, on our ability to obtain the timely and adequate shipment of our
products. Certain transportation industry vendors may experience capacity constraints due to increases in volume. If our
transportation industry vendors become capacity constrained, then we may have to identify new vendors or explore alternative
order fulfillment methods to ensure we have sufficient shipping capabilities. We have experienced and could again experience
significant delays in shipping our products to customers and incur additional costs to establish alternative shipping sources if
existing vendors are unable to sufficiently handle our shipping volume. We cannot predict if we will be able to obtain
alternative shipping sources within the time frames that we require and at a comparable cost.

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 our business. Therefore, the
Company's success also depends upon its ability to recruit, hire, train and retain current and additional skilled 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 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. In addition, we collect, store, have access to and
otherwise process certain confidential or sensitive data.

Cyber-attacks are becoming more sophisticated and include computer viruses or other malicious codes, attacks to gain
unauthorized access to data, and other security breaches that could lead to the loss of valuable business data, misappropriation
of our consumers’ or employees’ personal information, or a disruption of our critical systems. The Audit Review Committee of
the Company is regularly briefed on cybersecurity matters, however despite our security efforts, if unauthorized access does
occur, we could become the subject of regulatory action or litigation from our customers, employees, suppliers, and
shareholders, which could damage our reputation, require significant expenditures of capital, and cause us to lose business and
revenue. Additionally, unauthorized access could also cause interruptions in our operations and might require us to spend
significant management time and other resources investigating the event and dealing with local and federal law enforcement.
While we have not experienced any material impacts from a cyber-attack, any one or more future cyber-attacks could have a
material adverse effect on our financial condition and results of operations.

Our information technology systems may be vulnerable from time to time to damage 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. Any material disruption or slowdown of our systems, including our failure to
successfully upgrade 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

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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.

Financial Risks

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, pay dividends or take advantage of business opportunities by limiting the amount of
additional borrowings HBB may incur. Additionally, our exposure to rising interest rates subjects us to increased debt
obligations with respect to existing floating rate debt during periods where such rates are in effect, particularly in light of the
significant increase in interest rates during 2022.

Regulatory Risks

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.

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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.

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.

Over the past several years, 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 U.S. trade law that have been applied to separate lists of Chinese goods imported into the United
States, beginning during the Trump Administration and continuing in the Biden Administration. 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. In December
2019, the United States Trade Representative (USTR) announced a “Phase One” agreement with China pursuant to which the
U.S. government agreed to suspend the 15% tariffs on List 4b products. In January 2020, USTR issued a Federal
Register notice reducing the rate of Section 301 tariffs on List 4a products to 7.5%, effective in February 2020. A number of
lawsuits and other legal challenges with respect to the Section 301 tariff actions have been filed and remain pending, which
could result in changes to the tariffs. To date, the Biden Administration has effectively maintained and has continued to defend
and to enforce these particular trade actions. 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.

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Risks Related to Our Common Stock

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. Accordingly, holders of
our common stock should not rely on past payment of dividends in a particular amount as an indication of the amount of
dividends, if any, that will be paid in the future.

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, 2022, accounted for approximately 20.70% 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, 2022, accounted for the remaining voting power of Hamilton Beach Holding. As of December 31, 2022, certain
members of the Company's extended founding family held approximately 32.72% of Class A Common and 87.47% of Class B
Common. On the basis of this common stock ownership, certain members of the Company's extended founding family could
exercise 76.13% 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.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

The following table presents the principal distribution and office facilities owned or leased:

Facility Location

Glen Allen, Virginia

Geel, Belgium

Shenzhen, People's Republic of China

Owned/

Function(s) (3)
Leased
Leased Corporate headquarters

(1)

Distribution center

Distribution centers

Mexico City, Mexico

Leased Mexico sales and administrative headquarters

Belleville, Ontario, Canada

Leased Distribution center

Southern Pines, North Carolina

Owned

Service center for customer returns; parts distribution center; call center

Shenzhen, People's Republic of China

Leased Administrative office

Markham, Ontario, Canada

Leased Canada sales and administration headquarters

Shanghai, People's Republic of China

Leased

Sales office

Tultitlan, Mexico

Byhalia, Mississippi

(1)

Distribution center

Leased Distribution centers (2)

(1)
(2)
(3)

This facility is not owned or leased by HBB. This facility is managed by a third-party distribution provider.
The Company leases two distribution facilities in Byhalia, Mississippi
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 11 "Contingencies" included in our Financial Statements and
Supplementary Data contained in Part IV of this Form 10-K 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 March 3, 2023, there were 727 Class A Common stockholders of record and 771 Class B Common stockholders of record.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

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 year ended
December 31, 2022, the Company repurchased 261,049 shares for an aggregate purchase price of $3.0 million. There were no
share repurchases during the fourth quarter of 2022. There were no share repurchases during the years ended December 31,
2021 and 2020.

Item 6. RESERVED

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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)

Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our
historical financial statements and related notes thereto and the other disclosures contained elsewhere in this Annual Report on
Form 10-K. The following discussion and analysis focuses on our financial results for the years ended December 31, 2022 and
2021 and year-to-year comparisons between these years. A discussion of our results of operations for the year ended
December 31, 2021 compared to the year ended December 31, 2020 is included in Part II, Item 7 "Management’s Discussion
and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2021.

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 price concessions and changes in returns. 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 our 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.

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 2022, 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.

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 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.

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Historically, the Company employed a total return on investment approach whereby a mix of equities and fixed income
investments were used to maximize the long-term return of plan assets for a prudent level of risk. During the second quarter of
2022, the Board of Directors of HBB approved the termination of the Company's U.S. defined benefit pension plan (the
"Plan") with an effective date of September 30, 2022. In light of the Plan termination process, volatility in the market, and the
funding status, the Plan transferred a significant portion of its assets to lower risk investments in 2022 to move towards a
liability driven investing strategy whereby the assets are primarily fixed income investments. The fixed income investments
that were chosen under this strategy, while not precisely the same, are meant to parallel the investments selected in
determining the discount rate used to calculate the Company’s pension liability.

For the Non-U.S. Plan, the expected long-term rate of return on defined benefit plan assets reflects the Company'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 are used to determine the Company's
estimated rate of return assumption.

Expected returns for the U.S. pension plan are based on a calculated market-related value for U.S. pension plan assets.
Expected returns for the non-U.S. pension plan are based on fair market value for non-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.

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 2022
assumptions are used to calculate 2023 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 2023 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 2023 of 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 2022 by approximately $1.0 million; while a one percentage-point decrease in the discount rate would have raised
the plans’ projected benefit obligation as of the end of 2022 by approximately $1.1 million.

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RESULTS OF OPERATIONS

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

2022 Compared with 2021

Revenue

Cost of sales

Gross profit

Year Ended December 31

2022

% of
Revenue

2021

% of
Revenue

$ Change % Change

$ 640,949

100.0 % $ 658,394

100.0 % $ (17,445)

511,835

129,114

79.9 %

521,892

79.3 % (10,057)

20.1 %

136,502

20.7 %

(7,388)

(2.6) %

(1.9) %

(5.4) %

Selling, general and administrative expenses

90,120

14.1 %

104,763

15.9 % (14,643)

(14.0) %

Amortization of intangible assets

200

— %

200

— %

—

— %

23.0 %

60.8 %

12.0 %

(6.4) %

18.6 %

— %

Operating profit (loss)

Interest expense, net

Other expense (income), net
Income (loss) from continuing operations before income
taxes

Income tax expense

Net income from continuing operations

4,589

1,776

32,429

7,162

25,267

38,794

6.1 %

31,539

4.8 %

7,255

0.7 %

0.3 %

2,854

(272)

0.4 %

1,735

— %

2,048

(752.9) %

5.1 %

28,957

4.4 %

3,472

1.1 %

7,651

1.2 %

(489)

3.9 %

21,306

3.2 %

3,961

Income (loss) from discontinued operations, net of tax

—

— %

—

— %

—

Net income

25,267

4.1 %

21,306

3.2 %

3,961

18.6 %

Effective income tax rate on continuing operations

22.1 %

26.4 %

The following table identifies the components of the change in revenue for 2022 compared with 2021:

2021

(Decrease) increase from:

Unit volume and product mix

Foreign currency

Average sales price

2022

Revenue

658,394

(58,530)

(1,777)

42,862

640,949

Revenue - Revenue decreased $17.4 million, or 2.6% over the prior year due primarily to lower unit volume in the

US, Canadian and Latin American markets. Price increases and favorable product mix partially offset these volume decreases.
Additionally, revenue decreased compared to the prior year due to the Company's decision to move to a licensing model from
a company-managed model for its consumer business in Brazil and China. Partially offsetting these decreases was a $20.5
million, or 50.0% increase in revenue in the Global Commercial market compared to the prior year due to the continued
rebound of customer demand from pandemic-driven softness. The Mexican Consumer market had an increase in sales volume
and revenue compared to the prior year.

Gross profit - Gross profit margin was 20.1% in the current year compared to 20.7% in the prior year. Price increases

implemented during 2022 partially offset the higher product and transportation costs. Additionally, in 2022 there was a
reduction in carrier storage charges as compared to 2021.

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Selling, general and administrative expenses - Selling, general and administrative expenses decreased $14.6 million
due primarily to the $10.0 million insurance recovery recognized during the first quarter of 2022. Compared to the prior year,
outside services decreased, and incremental expenses incurred during the relocation to the Company's new distribution center
did not recur.

Interest expense - Interest expense, net increased $1.7 million due primarily to rising interest rates, as well as

increased average borrowings outstanding under HBB's revolving credit facility.

Other expense (income), net - Other expense (income), net in 2022 includes currency losses of $1.9 million in the
current year compared to currency losses of $0.6 million in 2021. This increase is driven by the liquidation of the Brazilian
subsidiary, which resulted in $2.1 million of accumulated other comprehensive losses being released into other expense
(income), net during the first quarter of 2022. Additionally, during 2022, the Company recorded a $0.3 million pension
settlement charge.

Income tax expense - The effective tax rate on income from continuing operations was 22.1% and 26.4% for the
twelve months ended December 31, 2022 and 2021, respectively. The effective tax rate was higher for the twelve months
ended December 31, 2021 due to the inclusion of interest and penalties on unrecognized tax benefits as a discrete expense
item. The interest and penalties on unrecognized tax benefits were reversed during the second quarter of 2022 due to a change
in the Company's position on an unresolved Mexico tax matter, favorably impacting the effective tax rate for the twelve
months ended December 31, 2022, partially offset by a valuation allowance on certain foreign deferred tax assets related to the
Brazil liquidation.

LIQUIDITY AND CAPITAL RESOURCES

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

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,
operating expenses, capital expenditures, and payments of principal and interest on debt. At December 31, 2022, the Company
had cash and cash equivalents for continuing operations of $0.9 million, compared to $1.1 million at December 31, 2021.

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

Net cash provided by (used for) operating activities from continuing operations

Net cash provided by (used for) investing activities from continuing operations

Net cash provided by (used for) financing activities from continuing operations

Year Ended December
31

(In thousands)

2022

2021

(3,418) $ 17,857

(2,279) $ (11,844)

5,575 $

(7,266)

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December 31, 2022 Compared with December 31, 2021

Operating activities - Net cash used for operating activities was $3.4 million compared to cash provided by operating

activities of $17.9 million in 2021 primarily due to net working capital which was a use of cash of $39.0 million in 2022
compared to a use of cash of $1.5 million in 2021. In 2022, trade receivables provided net cash of $4.5 million compared to
net cash provided of $27.6 million in the prior year due to the timing of collections. Net cash used for inventory and accounts
payable combined was $43.5 million in 2022 compared to $29.1 million in 2021. The Company significantly reduced
inventory levels compared to the prior year. This cash inflow was offset by a larger cash outflow related to accounts payable
due to the timing of payments.

Investing activities - Net cash used for investing activities decreased in 2022 compared to 2021 due to capital

spending for the Company's new leased distribution center facility in 2021 that did not recur.

Financing activities - Net cash provided by financing activities was $5.6 million in 2022 compared to cash used by
financing activities of $7.3 million. The change is due to an increase in HBB's net borrowing activity on the revolving credit
facility to fund net working capital.

Capital Resources

HBB has a $150.0 million senior secured floating-rate revolving credit facility (the “HBB Facility”) that expires in June 2025.
The Company expects to continue to borrow against the facility and make voluntary repayments within the next twelve
months. Repayment of the credit facility is due on June 30, 2025, therefore all borrowings are classified as long term debt as of
December 31, 2022. The obligations under the HBB Facility are secured by substantially all of HBB's assets.

At December 31, 2022, the borrowing base under the HBB Facility was $149.2 million and borrowings outstanding
were $110.9 million. At December 31, 2022, the excess availability under the HBB Facility was $38.3 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, Secured Overnight Financing Rate ("SOFR") or bankers' acceptance rate, as
defined in the HBB Facility, plus an applicable margin. The applicable margins, effective December 31, 2022, for base rate
loans and SOFR loans denominated in U.S. dollars were 0.00% and 2.05%, respectively. The applicable margins,
effective December 31, 2022, for base rate loans and bankers' acceptance loans denominated in Canadian dollars were 0.00%
and 2.05%, 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, 2022 was 3.49%, including
the floating rate margin and the effect of the interest rate swap agreements described below.

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 $50.0 million at December 31, 2022 at an
average fixed interest rate of 0.9%. HBB also entered into delayed-start interest rate swaps. These swaps have notional values
totaling $50.0 million as of December 31, 2022, with an average fixed interest rate of 1.6%.

The HBB Facility includes restrictive covenants, which, among other things, limit the payment of dividends to Hamilton
Beach Holding, subject to achieving availability thresholds. Dividends to Hamilton Beach Holding are not to exceed $7.0
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 $18.0 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 $30.0 million. The HBB Facility also requires HBB to
achieve a minimum fixed charge coverage ratio in certain circumstances, as defined in the HBB Facility. As of December 31,
2022, HBB was in compliance with all financial covenants in the HBB Facility.

Table of Contents

The Company maintains 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.

Contractual Obligations, Contingent Liabilities and Commitments

Following is a table which summarizes the contractual obligations of Hamilton Beach Holding as of December 31, 2022:

Payments Due by Period

Contractual Obligations

Total

2023

2024

2025

2026

2027

Thereafter

Revolving credit agreements

$ 110,895 $

— $

— $ 110,895 $

— $

Variable interest payments on HBB
Facility

11,277

5,645

Purchase and other obligations

172,737

172,574

Operating lease obligations

66,952

8,265

3,878

8,010

1,754

6,235

—

5,701

5,509

33,232

Total contractual cash obligations

$ 361,861 $ 186,484 $ 11,949 $ 118,935 $

5,752 $

5,509 $

33,232

HBB’s variable interest payments are calculated based upon HBB's anticipated payment schedule and the December 31, 2022
base rate and applicable margins, as defined in the HBB Facility. A 0.25% increase in the base rate would increase HBB’s
estimated total annual interest payments on the HBB Facility by approximately $0.2 million.

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

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.

Given the funded status of the two defined benefit pension plans, HBB does not expect to contribute to its pension plans in
2023. 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.

Recently Issued and Adopted Accounting Standards

Refer to Note 1 to the consolidated financial statements for discussion of recently issued and adopted accounting standards.

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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 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 source and ship products to meet anticipated demand, (2) the Company’s ability to
successfully manage constraints throughout the global transportation supply chain, (3) uncertain or unfavorable global
economic conditions, including those resulting from the COVID-19 pandemic and its downstream impacts and the ongoing
conflict in Ukraine; (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 the Company operates or buys 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, and
(17) 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, 2022. Furthermore, the future
impact of unfavorable economic conditions, including inflation, rising interest rates, availability of capital markets, consumer
spending rates, negative impacts resulting from the COVID-19 pandemic and its downstream impacts and the ongoing conflict
in Ukraine remain uncertain. In uncertain economic environments, the Company cannot predict whether or when such
circumstances may improve or worsen, or what impact, if any, such circumstances could have on its business, results of
operations, cash flows and financial position.

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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 receivable of $5.4 million at December 31, 2022. A
hypothetical 10% relative decrease in interest rates would cause a decrease of $0.3 million in the fair value of interest rate swap
agreements and the resulting fair value would be a receivable of $5.1 million. Additionally, a hypothetical 10% relative
increase in interest rates would cause an increase of $0.3 million in the fair value of interest rate swap agreements and the
resulting fair value would be a receivable of $5.7 million. Neither would have a material impact to the Company's interest
expense, net of $4.6 million at December 31, 2022.

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 receivable of $0.1 million at December 31, 2022. Assuming a hypothetical 10% weakening of the U.S. dollar at
December 31, 2022, the fair value of foreign currency-sensitive financial instruments, which represents forward foreign
currency exchange contracts, would be decreased by $1.2 million compared with its fair value at December 31, 2022.

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 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 two-year period ended
December 31, 2022 that would require disclosure pursuant to this Item 9.

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Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: As required by Exchange Act Rule 13a-15(b), our management,
including our Chief Executive Officer and Interim Principal Financial Officer, conducted an evaluation of the effectiveness of
our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this
report. Based on that evaluation, our Chief Executive Officer and Interim Principal Financial Officer concluded that our
disclosure controls and procedures were effective as of December 31, 2022.

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 Interim Principal 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 maintained effective internal control over financial reporting as of December 31,
2022. The Company's effectiveness of internal control over financial reporting as of December 31, 2022 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 and incorporated herein by reference.

Changes in Internal Control over Financial Reporting: There were no changes in the Company’s internal control over
financial reporting identified during the fourth quarter of 2022, in connection with the evaluation by the Company’s
management required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or
are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information with respect to Directors of the Company will be set forth in the 2023 Proxy Statement under the subheadings “Part
II — Proposals To Be Voted On At The 2023 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
2023 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 2023 Proxy
Statement under the subheading “Part IV — Other Important Information — Delinquent Section 16(a) Reports,” which
information is incorporated herein by reference.

Information regarding the executive officers of the Company is included in this Form 10-K under the subheading “Information
about our Executive Officers” of Part I.

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 .If we make any amendments to, or grant any
waiver from, the code that are required to be disclosed pursuant to the Securities Exchange Act of 1934, we will make such
disclosure on our website.

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Item 11. EXECUTIVE COMPENSATION

Information with respect to executive compensation will be set forth in the 2023 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 2023 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 2023 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 2023 Proxy Statement under the
heading “Part II — Proposals To Be Voted On At The 2023 Annual Meeting — Proposal 4 — Ratification of the Appointment
of Ernst & Young LLP as the Company's Independent Registered Public Accounting Firm for 2023,” which information is
incorporated herein by reference.

PART IV

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-1 of this Form 10-K.

(a)(2) Financial Statement Schedules

The response to Item 15(a)(2) is set forth beginning at page F-36 of this Form 10-K.

(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:

(3) Articles of Incorporation and By-laws.

3.1

3.2

4.1

4.2

4.3

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).

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.

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.

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.
Description of Registrant's Securities is attached hereto as Exhibit 4.3.

(10) Material Contracts.

10.1

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.

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10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

Amendment to Stockholder's Agreement, dated as of February 24, 2020, among the depository, Hamilton Beach Brands
Holding Company, the new Participating Stockholder signatories thereto and the Participating Stockholders is incorporated by
reference to Exhibit 10.38 of Hamilton Beach Brands Holding Company's Annual Report on Form 10-K/A, filed on July 24,
2020.
Amendment to Stockholders’ Agreement, dated as of December 21, 2020, by and between the Depository, the Issuer, the new
Participating Stockholders and the Participating Stockholders is incorporated by reference to Exhibit 19 to the Participating
Stockholders’ Schedule 13D/A, filed by the Participating Stockholders on February 12, 2021, Commission File Number
005-90132.
Amendment to Stockholders' Agreement, dated as of February 11, 2022, by and among the Depository, Hamilton Beach Brands
Holding Company, the new Participating Stockholder signatories thereto and the Participating Stockholders is incorporated by
reference to Exhibit 18 to the Participating Stockholders’ Schedule 13D/A, filed by the Participating Stockholders on February
11, 2022, Commission File Number 005-90132.
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 Book runner, 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.
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.
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.
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.
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.
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.
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.
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.
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 Quarterly Report on Form 10-Q, filed
on August 1, 2018.
Amendment No. 7 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 May 15, 2020, is incorporated by
reference to Exhibit 10.2 of Hamilton Beach Brands Holding Company's Quarterly Report on Form 10-Q, filed on July 24,
2020.
Amendment No. 8 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 U.S.
Borrower, and Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated November 23, 2020, incorporated by
reference to Exhibit 10.23 of Hamilton Beach Brands Holding Company's Annual Report on Form 10-K, filed on March 22,
2021.
Amendment No. 9 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 U.S.
Borrower, and Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated April 9, 2021, incorporated by reference to
Exhibit 10.1 of Hamilton Beach Brands Holding Company's Quarterly Report on Form 10-Q, filed on May 5, 2021.

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10.17

10.18

10.19

10.20

10.21*

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

10.29*

10.30*

10.31*

10.32*

10.33*

10.34*

10.35*

10.36*

10.37*

Amendment No. 10 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as
Administrative Agent, the Lenders that are Parties thereto as the Lenders, Hamilton Beach Brands, Inc., as U.S. Borrower, and
Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated September 17, 2021 is incorporated by reference to Exhibit
10.1 of Hamilton Beach Brands Holding Company's Quarterly Report on Form 10-Q, filed on November 3, 2021.
Amendment No. 11 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as
Administrative Agent, the Lenders that are Parties thereto as the Lenders, Hamilton Beach Brands, Inc., as U.S. Borrower, and
Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated June 28, 2022 is incorporated by reference to Exhibit 10.2
of Hamilton Beach Brands Holding Company's Quarterly Report on Form 10-Q, filed on August 3, 2022.
Amendment No. 12 to Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as
Administrative Agent, the Lenders that are Parties thereto as the Lenders, Hamilton Beach Brands, Inc., as U.S. Borrower, and
Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated August 15, 2022 is incorporated by reference to Exhibit
10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on August 18, 2022.
Consent regarding the Amended and Restated Credit Agreement by and among Wells Fargo Bank, National Association, as
Administrative Agent, the Lenders that are Parties thereto as the Lenders, Hamilton Beach Brands, Inc., as U.S. Borrower, and
Hamilton Beach Brands Canada, Inc., as Canadian Borrower, dated November 15, 2022 is incorporated by reference to Exhibit
10.1 of Hamilton Beach Brands Holding Company's Current Report on Form 8-K, filed on November 15, 2022.
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).
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.
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 Quarterly Report on Form 10-Q, filed
on October 30, 2018.
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.
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.
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 Quarterly Report on Form 10-Q, filed
on October 30, 2018.
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.
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.
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.
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 Quarterly
Report on Form 10-Q, filed on October 30, 2018.
Amended and Restated Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan, dated as of
March 1, 2020, is incorporated by reference to Appendix A of Hamilton Beach Brands Holding Company's Proxy Statement,
filed on March 26, 2020.
Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan, amended and restated effective March
1, 2022 is incorporated herein by reference to Exhibit 4.4 to the Hamilton Beach Brands Holding Company Registration
Statement on Form S-8 (No. 333-265031) filed on May 18, 2022.
Form of Cashless Exercise Award Agreement for the Hamilton Beach Brands Holding Company Executive Long-Term Equity
Incentive Plan incorporated by reference to Exhibit 10.2 of Hamilton Beach Brands Holding Company's Quarterly Report on
Form 10-Q, filed on May 5, 2021.
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.
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.
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.
Hamilton Beach Brands Holding Company Non-Employee Directors’ Equity Compensation Plan (Amended and Restated
Effective May 18, 2021), incorporated herein by reference to Exhibit 10.1 of Hamilton Beach Brands Holding Company's
Quarterly Report on Form 10-Q, filed on August 4, 2021.

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10.38*

10.39*

10.40*

10.41*

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).
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).
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.
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.

(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 Linda Woermer 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 Linda Woermer

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

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Management contract or compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of this
Annual Report on Form 10-K.

Table of Contents

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.

SIGNATURES

Hamilton Beach Brands Holding Company

(Registrant)

Signature

By:

/s/ Gregory H. Trepp

Gregory H. Trepp

Title

Date

President and Chief Executive Officer, Director

March 9, 2023

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned director of Hamilton Beach Brands Holding Company
hereby appoints Gregory H. Trepp 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, any and all amendments to this Annual Report
on Form 10-K, 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

/s/ Linda Woermer

Linda Woermer

/s/ Mark R. Belgya

Mark R. Belgya

/s/ J.C. Butler, Jr.

J.C. Butler, Jr.

/s/ Paul D. Furlow

Paul D. Furlow

President and Chief Executive Officer (Principal
Executive Officer), Director

March 9, 2023

Senior Director, Controller of Hamilton Beach
Brands, Inc. (Interim Principal Financial Officer)/
(Interim Principal Accounting Officer)

March 9, 2023

Director

Table of Contents

/s/ John P. Jumper

John P. Jumper

/s/ Dennis W. LaBarre

Dennis W. LaBarre

/s/ Michael S. Miller

Michael S. Miller

/s/ Alfred M. Rankin, Jr.

Alfred M. Rankin, Jr.

/s/ Thomas T. Rankin

Thomas T. Rankin

/s/ James A. Ratner

James A. Ratner

/s/ Clara R. Williams

Clara R. Williams

Signature

Title

Date

March 9, 2023

Director

Table of Contents

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, 2022

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:

Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID: 42)

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Equity

Notes to Consolidated Financial Statements

F-3

F-6

F-7

F-8

F-9

F-10

F-11

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, 2022 and 2021, 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, 2022, and the related notes and 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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December
31, 2022, 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, 2022, 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 March 9, 2023 expressed an unqualified opinion thereon.

Adoption of ASU No. 2016-02

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases in
2022 due to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), and the related
amendments.

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.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.

F-3

Table of Contents

Valuation of customer price concession accrual

Description of
the matter

As described in Notes 1 and 10 to the consolidated financial statements, the Company offers price
concessions to certain of its customers, which results in variable consideration. The Company recognizes a
reduction to revenue and a corresponding accrual for price concessions as the related products are sold
based on the estimated amount of customer sales incentives to be deducted by trade customers. This
estimate is made by applying either the expected value method or most likely amount method according to
which method would provide the better prediction.

Auditing the valuation of the customer price concession accrual was complex and involved especially
challenging judgment because the calculation involves subjective management assumptions about
estimates of expected price concessions. For example, the adjustment to the customer price concession
accrual reflects management's assumptions about future deductions to be taken by customers which is
subjective in nature as it relies upon retrospective analysis of price concessions claimed by customers and
management’s knowledge of its customer base, and changes in those assumptions can have a material
effect on the customer price concession accrual.

How we
addressed the
matter in our
audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the
Company’s controls that address the risk of material misstatement relating to the valuation of the customer
price concession accrual. For example, we tested controls over management’s review of adjustments to the
customer price concession accrual, as well as their review of significant assumptions such as the amount of
future deductions to be taken by customers. We also tested controls over the completeness and accuracy of
data underlying the accrual including the validation of third-party sales data.

Our audit procedures included, among others, testing a sample of the underlying data used by management
in development of the customer price concession accrual, testing a sample of credit memos issued
subsequent to year-end, evaluated the significant assumptions made by management by performing a
hindsight analysis, and performing inquiries of executives within the Company responsible for the
respective customer relationships.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2017.

Cleveland, Ohio
March 9, 2023

F-4

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 Internal Control Over Financial Reporting

We have audited Hamilton Beach Brands Holding Company’s internal control over financial reporting as of December 31,
2022, 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, Hamilton Beach Brands
Holding Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the 2022 consolidated financial statements of the Company and our report dated March 9, 2023 expressed an
unqualified opinion thereon.

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. 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.

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
March 9, 2023

F-5

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS

Revenue

Cost of sales

Gross profit

Selling, general and administrative expenses

Amortization of intangible assets

Operating profit (loss)

Interest expense, net

Other expense (income), net

Income (loss) from continuing operations before income taxes

Income tax expense (benefit)

Net income (loss) from continuing operations

Income (loss) from discontinued operations, net of tax

Net income (loss)

Basic earnings (loss) per share:

Continuing operations

Discontinued operations

Basic earnings (loss) per share

Diluted earnings (loss) per share:

Continuing operations

Discontinued operations

Diluted earnings (loss) per share

Basic weighted average shares outstanding

Diluted weighted average shares outstanding

See notes to consolidated financial statements.

Year Ended December 31

2022

2021

2020

(In thousands, except per share data)

640,949 $

658,394 $

603,713

511,835

129,114

90,120

200

38,794

4,589

1,776

32,429

7,162

25,267

—

521,892

136,502

104,763

200

31,539

2,854

(272)

28,957

7,651

21,306

—

25,267 $

21,306 $

1.81 $

1.54 $

—

1.81 $

1.54 $

1.81 $

1.53 $

—

1.81 $

1.53 $

465,059

138,654

99,990

1,249

37,415

1,998

1,685

33,732

9,665

24,067

22,191

46,258

1.76

1.62

3.39

1.76

1.62

3.37

13,970

13,996

13,880

13,930

13,657

13,712

F-6

Table of Contents

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

Net income (loss)

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment

Gain (loss) on long-term intra-entity foreign currency transactions

Cash flow hedging activity
Reclassification of foreign currency adjustments into earnings

Reclassification of hedging activities into earnings

Pension plan adjustment

Reclassification of pension adjustments into earnings

Total other comprehensive income (loss), net of tax

Comprehensive income (loss)

See notes to consolidated financial statements.

2022

Year Ended December 31
2021
(In thousands)

2020

25,267 $

21,306 $

46,258

(2,997)

1,865

4,450

2,085

346

(4,053)

629

726

(828)

320

—

386

2,210

419

1,481

(3,035)

(540)

—

(463)

630

583

2,325 $

3,233 $

(1,344)

27,592 $

24,539 $

44,914

F-7

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED BALANCE SHEETS

Assets

Current assets

Cash and cash equivalents

Trade receivables, net

Inventory

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net

Right-of-use lease assets

Goodwill

Other intangible assets, net

Deferred tax assets

Deferred costs

Other non-current assets

Total assets

Liabilities and stockholders' equity

Current liabilities

Accounts payable

Accrued compensation

Accrued product returns

Lease liabilities

Other current liabilities

Total current liabilities

Revolving credit agreements

Lease liabilities, non-current

Other long-term liabilities

Total liabilities

Stockholders’ equity

Preferred stock, par value $0.01 per share
Class A Common stock, par value $0.01 per share; 10,663 and 10,267 shares issued as of December 31,
2022 and 2021, respectively
Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 3,844
and 4,000 shares issued as of December 31, 2022 and 2021, respectively

Capital in excess of par value

Treasury stock

Retained earnings

Accumulated other comprehensive loss

Total stockholders’ equity

Total liabilities and stockholders' equity

See notes to consolidated financial statements.

F-8

December 31

2022

2021

(In thousands)

928

1,125

115,135

156,038

12,643

284,744

27,830

44,000

6,253

1,492

3,117

14,348

7,166

119,580

183,382

14,273

318,360

30,485

—

6,253

1,692

4,006

18,703

3,005

388,950

382,504

61,759

131,912

11,310

6,474

5,875

16,150

101,568

110,895

46,801

5,152

264,416

—

107

65,008

(8,939)

80,238

(11,918)

124,534

11,719

6,429

—

14,116

164,176

96,837

—

19,212

280,225

—

103

61,586

(5,960)

60,753

(14,243)

102,279

388,950

382,504

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS

Operating activities

Net income (loss) from continuing operations

25,267 $

21,306 $

24,067

2022

Year Ended December 31
2021
(In thousands)

2020

Adjustments to reconcile net income (loss) from continuing operations to net cash provided
by (used for) operating activities:
Depreciation and amortization
Deferred income taxes
Stock compensation expense
Brazil foreign currency loss
Other

Net changes in operating assets and liabilities:

Affiliate payable
Trade receivables
Inventory
Other assets
Accounts payable
Other liabilities

Net cash provided (used for) by operating activities from continuing operations

Investing activities

Expenditures for property, plant and equipment
Other

Net cash (used for) provided by investing activities from continuing operations
Financing activities

Net additions (reductions) to revolving credit agreements

Purchase of treasury stock

Cash dividends paid

Financing fees paid

Other financing

Net cash (used for) provided by financing activities from continuing operations

Cash flows from discontinued operations

Net cash provided by (used for) operating activities from discontinued operations

Net cash provided by (used for) investing activities from discontinued operations

Cash (used for) provided by discontinued operations

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

Cash, cash equivalents and restricted cash

Increase (decrease) for the period from continuing operations
Increase (decrease) for the year from discontinued operations
Balance at the beginning of the year
Balance at the end of the year

Reconciliation of cash, cash equivalents and restricted cash

Cash and cash equivalents
Restricted cash included in prepaid expenses and other current assets
Restricted cash included in other non-current assets

Total cash, cash equivalents, and restricted cash

See notes to consolidated financial statements.

F-9

4,883
372
3,424
2,085
(129)

—
4,532
26,399
6,274
(69,911)
(6,614)
(3,418)

(2,279)
—

(2,279)

14,383

(2,979)

(5,782)

(47)

—
5,575

—

—
(123)

4,913
2,110
3,237
—
1,025

(505)
27,631
(9,077)
(4,729)
(20,037)
(8,017)
17,857

(11,844)
—

(11,844)

3,907
(1,431)
3,978
—
2,055

9
(41,314)
(65,808)
(550)
40,215
6,938
(27,934)

(3,312)
(500)

(3,812)

(1,550)

39,761

—

(5,468)

(114)

(134)
(7,266)

—

—
(33)

—

(5,053)

(528)

—
34,180

(6,193)

(6,187)
25

2,459
(6,187)
7,164
3,436

(245)
—
2,150
1,905 $

(1,286)
—
3,436
2,150 $

928 $
62
915
1,905 $

1,125 $
48
977
2,150 $

2,415
208
813
3,436

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF EQUITY

Balance, January 1, 2020

Net income (loss)

Issuance of common stock, net of conversions

Stock compensation expense

Cash dividends, $0.37 per share

Other comprehensive income (loss)

Reclassification adjustment to net income

Balance, December 31, 2020

Net income (loss)

Issuance of common stock, net of conversions

Stock compensation expense

Cash dividends, $0.395 per share

Other comprehensive income (loss)

Reclassification adjustment to net income (loss)

Balance, December 31, 2021

Net income (loss)

Issuance of common stock, net of conversions

Purchase of treasury stock

Stock compensation expense

Cash dividends, $0.415 per share

Other comprehensive income (loss)

Reclassification adjustment to net income (loss)

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)

98 $

41 $ 54,509 $

(5,960) $

—

(2)

3,978

—

3,710 $
46,258

—

(5,053)

—

(16,132) $
—

—

(1,464)

120

100 $

41 $ 58,485 $

(5,960) $

44,915 $

(17,476) $

—

(1)

—

(2)

3,103

—

21,306

—

(5,468)

—

2,428

805

36,266

46,258

—

3,978

(5,053)

(1,464)

120

80,105

21,306

—

3,103

(5,468)

2,428

805

103 $

40 $ 61,586 $

(5,960) $

60,753 $

(14,243) $

102,279

—

(2)

—

(2)

—

(2,979)

3,424

—

25,267

—

(5,782)

—

(735)

3,060

25,267

—

(2,979)

3,424

(5,782)

(735)

3,060

Balance, December 31, 2022

107 $

38 $ 65,008 $

(8,939) $

80,238 $

(11,918) $

124,534

See notes to consolidated financial statements.

F-10

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

The Company also previously operated through its other wholly-owned subsidiary, The Kitchen Collection, LLC ("KC"), which
is reported as discontinued operations in all periods presented herein. KC completed its dissolution on April 3, 2020 with a pro-
rata distribution of its remaining assets to creditors, at which time the KC legal entity ceased to exist. See Note 2 for further
information on discontinued operations.

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

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. 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.

Segment Information

As of December 31, 2022, HBB is the Company’s single reportable operating segment. The Company’s reportable segment is
determined based on (i) financial information reviewed by the chief operating decision maker ("CODM") (ii) operational
structure of HBB which is designed and managed to share resources across the entire suite of products offered by the business,
and (iii) the basis upon which the CODM makes resource allocation decisions. Since the Company operates in one reportable
segment, all required financial segment information can be found in the consolidated financial statements.

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 Statements of Operations. There are no
assets and liabilities of discontinued operations as of December 31, 2022 and 2021. 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.

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)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company 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, 2022 and 2021,
receivables from HBB’s five largest customers represented 73% and 61%, 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 $118.5 million, $140.7 million , and $162.4 million of trade receivables during 2022, 2021 and 2020,
respectively. The losses incurred on sold receivables in the consolidated results of operations for the years ended December 31,
2022, 2021, and 2020 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.

Assets Held for Sale

During the fourth quarter of 2020, the Company committed to a plan to sell its Brazilian subsidiary and determined that it met
all of the criteria to classify the assets and liabilities of this business as held for sale. In April 2021, the Company made the
decision to wind down the Brazilian subsidiary and enter into a licensing agreement with a third party to service the Brazilian
market. The carrying amounts of the assets were reclassified to held and used during the second quarter of 2021. During the
first quarter of 2022, the criteria for substantially complete liquidation were met, and $2.1 million of accumulated other
comprehensive losses were released into other expense (income), net in the consolidated results of operations during the three
months ended March 31, 2022.

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)

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 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 more-likely-than-not that the goodwill was not 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 associated expense is 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-13

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 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 determines whether price concessions offered to its customers are a reduction of the transaction
price and revenue or are advertising expense, depending on whether the Company receives a distinct good or service from our
customers and, if so, whether the Company can reasonably estimate the fair value of that distinct good or service. The
Company evaluated such agreements with our customers and determined they should be accounted for as variable
consideration.

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 $11.8 million, $8.6 million, and
$10.0 million in 2022, 2021, and 2020, 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.

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.

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)

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 SOFR (Secured Overnight Financing Rate). For cash flow hedges, the Company formally
assesses, both at inception and on a quarterly basis thereafter, whether the designated derivative instrument is highly effective in
offsetting changes in cash flows of the hedged item. 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 Company discontinues hedge accounting prospectively when the derivative is not
highly effective as a hedge, the underlying hedged transaction is no longer probable, or the hedging instrument expires, is sold,
terminated or exercised.

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, and
amended and restated in March 2022, the Company grants shares of Class A Common, subject to transfer restrictions, as a
means of retaining and rewarding selected employees for long-term performance. Shares 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 150,062, 158,272, and 94,898 shares of Class A Common in the years ended
December 31, 2022, 2021, and 2020, respectively. After the issuance of these shares, there were 722,568 shares of Class A
Common available for issuance under this plan. Stock compensation expense related to the Executive Plan was $2.3 million,
$2.1 million, and $2.9 million for the years ended December 31, 2022, 2021, and 2020, respectively, and was based on the fair
value of Class A Common on the grant date.

F-15

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 also has a stock compensation plan for non-employee directors of the Company under which a portion of the
annual retainer for each non-employee director is paid in transfer-restricted shares of Class A Common. For the year ended
December 31, 2022, $110,000 ($150,000 for the Chairman) of the non-employee director's annual retainer of $175,000
($250,000 for the Chairman) was paid in transfer-restricted shares of Class A Common. For the year ended December 31, 2021,
$105,000 ($150,000 for the Chairman) of the non-employee director's annual retainer of $167,000 ($250,000 for the Chairman)
was paid in transfer-restricted shares of Class A Common. Shares awarded under the 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 transfer restriction period ends at the earliest of (i) ten years after the Quarter Date
with respect to which such Required Shares were issued or transferred, (ii) the date of the director's death or date the director
terminates service as a director due to permanent disability, (iii) five years (or earlier with the approval of the Board of
Directors) after the director's date of retirement from the Board of Directors, or (iv) the date the director has both retired from
the Board of Directors and has reached age 70. Pursuant to this plan, the Company issued 90,223, 57,735, and 74,337 shares in
the years ended December 31, 2022, 2021 and 2020, respectively. In addition to the mandatory retainer fee received in transfer-
restricted stock, directors may elect to receive shares of Class A Common in lieu of cash for up to 100% of the balance of their
annual retainer, committee retainer and any committee chairman's fees. These voluntary shares are not subject to any
restrictions. There were no shares issued under voluntary elections in 2022. Total shares issued under voluntary elections were
1,768 and 2,343 in 2021 and 2020, respectively. After the issuance of these shares, there were 193,646 shares of Class A
Common available for issuance under this plan. Stock compensation expense related to these awards was $1.1 million, $1.1
million, and $1.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. Stock compensation expense
represents fair value based on the market price of the shares of Class A Common on the grant date.

Leases

The Company adopted Topic 842 on January 1, 2022. The Company determines whether an arrangement is a lease at inception,
considering whether the contract conveys a right to control the use of the identified asset for a period of time in exchange for
consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating leases are
included in Right-of-use lease assets, Lease liabilities, and Lease liabilities, non-current on the Consolidated Balance Sheets.

Right-of-use lease assets and lease liabilities are recognized based on the present value of future minimum lease payments over
the lease term at commencement date. Lease liabilities are classified between current and non-current liabilities based on their
contractual payment terms. The right-of-use lease asset includes prepaid rent and reflects the unamortized balance of lease
incentives. The Company’s leases may include renewal options, and the renewal option is included in the lease term if it is
concluded that it is reasonably certain that we will exercise that option. The Company’s lease agreements do not contain any
material residual value guarantees or material restrictive covenants.

The Company has operating leases for real estate, equipment, and production specific tooling assets used by our third-party
suppliers. The Company does not have finance leases. The Company has elected not to record short-term leases with initial
terms of twelve months or less in our Consolidated Balance Sheets. Lease expense for operating leases is recognized on a
straight-line basis over the lease term. Variable lease payments that do not depend on an index or a rate, such as the Company’s
proportionate share of actual costs for utilities, common area maintenance, insurance, and property taxes, are excluded from the
measurement of the lease liability, unless subject to fixed minimum requirements, and are recognized as variable lease cost
when the obligation for that payment is incurred. The Company combines lease and non-lease components as a single
component for all asset classes. Lease expense is classified as cost of sales or selling, general and administrative expenses in
our Consolidated Statements of Operations based on the use of the leased item.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the
information available at the lease commencement date in determining the present value of lease payments. Our estimated
incremental borrowing rate reflects a secured rate based on recent debt issuances, our estimated credit rating, lease term, as well
as publicly available data for instruments with similar characteristics.

Treasury Stock

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

F-16

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

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. The
Company 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 by jurisdiction. 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.

Insurance Recovery

In the first quarter of 2022, the Company recognized $10.0 million of insurance recovery associated with unauthorized
transactions by former employees at our Mexican subsidiaries, which were identified in the quarter ended March 31, 2020. The
Company maintains fidelity insurance and filed a claim to recover losses incurred up to the policy maximum of $10.0 million.
The insurance recovery was received during the second quarter of 2022, and the benefit was recognized as a reduction to
selling, general and administrative expenses in our Consolidated Statement of Operations during the first quarter of 2022.

Accounting Standards Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting.” The new accounting rules provide optional expedients and exceptions for applying
generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate
reform. During the third quarter of 2022, the Company adopted certain optional expedients provided under Topic 848 that
permit its hedging relationships to continue without de-designation upon changes due to reference rate reform. The adoption of
this guidance resulted in no material impact to the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases, (Topic 842)" which was subsequently amended when FASB issued:
ASU 2018-01, "Land Easement Practical Expedient for Transition to Topic 842"; ASU 2018-10, "Codification Improvements
to Topic 842"; ASU 2018-11, "Targeted Improvements". Topic 842 modifies lease accounting by requiring lessees to
recognize lease right-of-use assets and liabilities for operating leases and disclosing key information about leasing
arrangements. The Company adopted Topic 842 utilizing the effective date transition method, which does not require
restatement of prior periods, on January 1, 2022 and as part of the process made the following permitted accounting policy
elections:

a. The package of practical expedients, which allowed the Company not to reassess prior conclusions reached related to

lease existence, lease classification, and initial direct costs.

b. The Company will not recognize right-of-use assets or lease liabilities for leases with a stated term of 12 months or

less.

c. The Company will not separate non-lease components from lease components for all asset classes.
d. The Company did not elect the hindsight practical expedient for any of the asset classes.

F-17

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

Upon adoption, the Company recorded $44.0 million of right-of-use lease assets and $52.5 million of lease liabilities within the
Consolidated Balance Sheet. The adoption of the standard did not have a material impact to the Consolidated Statements of
Operations or Cash Flows.

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income
Taxes.” The new accounting rules reduce complexity by removing specific exceptions to general principles related to
intraperiod tax allocations, ownership changes in foreign investments, and interim period income tax accounting for year-to-
date losses that exceed anticipated losses. The new accounting rules also simplify accounting for franchise taxes that are
partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, separate financial
statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods. The Company adopted
ASU 2019-12 for the fiscal year ended December 31, 2022 and the adoption of this guidance did not have a material impact on
the Company’s consolidated financial statements.

Recently Issued Accounting Standards

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 and smaller reporting companies, the
amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal
years. Early adoption is permitted. The Company is planning to adopt ASU 2016-13 for its year beginning January 1, 2023 and
subsequent interim periods. Although the assessment is ongoing, the Company does not expect the adoption of this guidance to
have a material impact on the Company’s financial condition, results of operations or cash flows.

NOTE 2 - Discontinued Operations

On October 10, 2019, the Board approved the wind down of KC's retail operations 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 is reported as discontinued operations in all periods presented. KC
completed its dissolution on April 3, 2020 with a pro-rata distribution of its remaining assets to creditors, at which time the KC
legal entity ceased to exist and was no longer consolidated by the Company. Neither Hamilton Beach Brands Holding Company
nor HBB received a distribution.

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

Revenue

Cost of sales

Gross profit

Selling, general and administrative expenses
Adjustment of lease termination liability (1)
Adjustment of other current liabilities(2)
Operating profit (loss)

Interest expense

Other expense, net

Income (loss) from discontinued operations before income taxes

Income tax expense (benefit)

Income (loss) from discontinued operations, net of tax

Year Ended
December 31

2020

631

—

631

1,346

(16,457)

(6,608)

22,350

—

22,262

22,191

(1)

(2)

For the year ended December 31, 2020, represents an adjustment to the lease termination obligation based on the final distribution
of KC's remaining assets on April 3, 2020.
Represents an adjustment to the carrying value of substantially all of the other current liabilities based on the final distribution of
KC's remaining assets on April 3, 2020.

F-18

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

Due to the dissolution of KC, there were no assets or liabilities associated with KC as of December 31, 2022 and 2021. Neither
Hamilton Beach Brands Holding Company nor HBB has guaranteed any obligations of KC.

NOTE 3 - Property, Plant and Equipment, Net

Property, plant and equipment, net includes the following:

Land

Furniture and fixtures

Building and improvements

Machinery and equipment

Internal-use capitalized software

Construction in progress, including internal-use capitalized software not yet in service

Property, plant and equipment, at cost

Less allowances for depreciation and amortization

December 31

2022

2021

226 $

11,617

9,713

32,660

14,921

959

70,096

42,266

27,830 $

226

11,485

9,737

32,392

14,615

1,240

69,695

39,210

30,485

NOTE 4 - Intangible Assets

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

Balance at December 31, 2022
Trademarks

Balance at December 31, 2021

Trademarks

Gross Carrying
Amount

Accumulated
Amortization

Net
Balance

$
$

3,100 $
3,100 $

(1,608) $
(1,608) $

1,492
1,492

3,100

(1,408)

3,100 $

(1,408) $

1,692

Amortization expense for intangible assets was $0.2 million in 2022 and 2021.

Expected annual amortization expense of intangible assets for the next five years is $0.2 million. The remaining useful life of
the trademark intangible asset is approximately 7.5 years.

F-19

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

NOTE 5 - Current and Long-Term Financing

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

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

Total outstanding borrowings for continuing operations:

Revolving credit agreements

Total outstanding borrowings

December 31

2022

2021

$ 110,895

96,837

Total available borrowings, net of limitations, under revolving credit agreements

$ 149,227

$ 149,015

Unused available borrowings

Weighted average stated interest rate on total borrowings

Weighted average effective interest rate on total borrowings (including interest rate swap agreements)

$ 38,332

52,178

3.80 %

3.49 %

2.18 %

3.38 %

Including swap settlements, interest paid on total debt was $4.5 million, $2.8 million, and $2.1 million during 2022, 2021, and
2020, respectively. Interest capitalized was not material in 2022, 2021 and 2020.

HBB has a $150 million senior secured floating-rate revolving credit facility (the “HBB Facility”) that expires in June 2025.
Repayment of the credit facility is due on June 30, 2025, therefore all borrowings are classified as long-term debt as of
December 31, 2022. The obligations under the HBB Facility are secured by substantially all of HBB's assets. The HBB
Facility also requires HBB to achieve a minimum fixed charge coverage ratio in certain circumstances, as defined in the HBB
Facility. As of December 31, 2022, HBB was in compliance with all financial covenants in the HBB Facility.

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, SOFR, or bankers' acceptance rate, as defined in the HBB Facility, plus an applicable
margin. The applicable margins, effective December 31, 2022, for base rate loans and SOFR loans denominated in U.S. dollars
were 0.00% and 2.05%, respectively. The applicable margins, effective December 31, 2022, for base rate loans and bankers'
acceptance loans denominated in Canadian dollars were 0.00% and 2.05%, 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 $50.0 million at December 31, 2022 at an
average fixed interest rate of 0.9%. HBB also entered into delayed-start interest rate swaps during 2021. These swaps have
notional values totaling $50.0 million as of December 31, 2022, with an average fixed interest rate of 1.6%.

Dividends to Hamilton Beach Brands Holding Company are not to exceed $7.0 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 $18.0 million. Dividends to Hamilton Beach Brands Holding Company 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 $30 million. The Company expects to continue to borrow against the facility and
make voluntary repayments within the next twelve months.

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)

NOTE 6 - 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 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, 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 or 2 during the years ended December 31, 2022 and 2021. There was one
transfer into Level 3 related to the $3.4 million of assets held for sale during the year ended December 31, 2020. These assets
were transferred out of Level 3 during the year ended December 31, 2021. There were no transfers into or out of Level 3 during
the year ended December 31, 2022.

NOTE 7 - Derivative Financial Instruments

Foreign Currency Derivatives

HBB held forward foreign currency exchange contracts with total notional amounts of $11.3 million and $15.1 million at
December 31, 2022, and 2021, respectively, denominated primarily in Canadian dollars and Mexican pesos. The fair value of
these contracts approximated a receivable of $0.1 million at December 31, 2022 and a receivable of less than $0.1 million at
December 31, 2021.

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 SOFR borrowings. All swaps have been designated
as cash flow hedges.

The following table summarizes the notional amounts, related rates and remaining terms of interest rate swap agreements for
HBB at December 31, in millions:

Interest rate swaps

Delayed start interest rate swaps

50.0 $

25.0

75.0

0.9 %

1.6 %

1.7 %

1.2 %

Notional Amount
2021
2022

Average Fixed Rate
2021
2022

Remaining Term at
December 31, 2022
Extending to January 2024

Extending to January 2029

The fair value of HBB's interest rate swap agreements was a receivable of $5.4 million at December 31, 2022 and a payable of
$0.9 million at December 31, 2021. 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, 2022 are expected to
continue to be effective as hedges.

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)

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

2022

2021

Balance sheet location

2022

2021

Prepaid expenses and other
current assets
Other non-current assets

Prepaid expenses and other
current assets

$ 837 $ — Other current liabilities

$ — $ 216

4,539

— Other long-term liabilities

—

655

174

73 Other current liabilities

101

$ 5,550 $ 73

$ 101 $ 912

Interest rate swap agreements

Current

Long-term

Foreign currency exchange contracts

Current

Total derivatives

NOTE 8 - Leasing Arrangements

On January 1, 2022, the Company adopted ASU 2016-02, "Leases (Topic 842)", which at commencement of the Company’s
operating leases, requires recognition of right-of-use assets and corresponding liabilities based on the present value of future
lease payments over the lease term. Some of the Company’s leases, primarily those for real estate assets, may contain both lease
and non-lease components, the Company has elected to combine and account for lease and non-lease components as a single
lease component. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets and
lease expense for these leases are recognized on a straight-line basis over the lease term. The Company does not have any
finance leases. The Company’s leases have remaining lease terms of one month to 12 years, some of which include options to
extend the leases for up to 5 years. The renewal option is included in the lease term if it is concluded that it is reasonably
certain that we will exercise that option.

The assets associated with the Company’s operating leases primarily consist of real estate and equipment. Real estate leases are
comprised of warehouses, corporate headquarters and sales offices. Equipment leases include office and warehouse equipment
as well as Company specific tooling used by third-party suppliers in the production process. Payments under these lease
arrangements may be fixed or variable.

Lease costs associated with fixed payments on the Company’s operating leases were $7.8 million for the year ended
December 31, 2022. Variable lease costs, which are primarily related to production specific tooling assets provided by third-
party suppliers, are included in product purchases which consisted of $357.6 million for the year ended December 31, 2022.
Short-term lease costs for the year ended December 31, 2022 were $0.8 million.

The following table presents supplemental cash flow and non-cash information related to leases:

Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from leases
Right-of-use assets obtained in exchange for lease obligations – non-cash activity

$
$

7,750
5,430

December 31

2022

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)

The following table reconciles the undiscounted future lease payments for operating leases to the operating lease liabilities
recorded in the Consolidated Balance Sheet at December 31, 2022:

2023

2024

2025

2026

2027

Thereafter

Total lease payments

Less: impact of discounting

Present value of lease payments

Undiscounted Future
Operating Lease Payments

8,265

8,010

6,235

5,701

5,509

33,232

66,952

14,276

52,676

The weighted average remaining lease term and discount rate related to the Company’s lease liabilities as of December 31,
2022 is 9.7 years and 4.8% respectively. The discount rates used to present value the operating lease liabilities are based on
estimates of the Company’s incremental borrowing rate.

As of December 31, 2022, the Company did not have any additional material operating or finance leases that had not yet
commenced.

Future minimum operating lease payments at December 31, 2021 were:

2022

2023

2024

2025

2026

Subsequent to 2026

Total minimum lease payments

Operating
Leases

7,619

7,929

7,765

5,887

5,404

38,592

73,196

Rental expense from continuing operations net of sublease rental income for all operating leases was $9.0 million in 2021 and
$6.2 million in 2020.

NOTE 9 - Stockholders' Equity and Earnings Per Share

Capital Stock

The authorized capital stock of Hamilton Beach Brands Holding 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 are 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.

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)

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:

Preferred stock, par value $0.01 per share

Preferred stock authorized

Preferred stock outstanding

Class A Common stock, par value $0.01 per share

Class A Common authorized
Class A Common issued(1)(2)

Treasury Stock

Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis

Class B Common authorized
Class B Common issued(1)

December 31

2022

2021

5,000

—

70,000

10,663

626

30,000

3,844

5,000

—

70,000

10,267

365

30,000

4,000

(1)
(2)

Class B Common converted to Class A Common were 156 shares during 2022 and 45 shares 2021.
The Company issued Class A Common of 240 during 2022 and 216 during 2021 related to the Company's stock compensation plan.

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 year ended
December 31, 2022, the Company repurchased 261,049 shares for an aggregate purchase price of $3.0 million. There
were no share repurchases during the years ended December 31, 2021 and 2020.

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)

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:

Balance, January 1, 2020

Other comprehensive income (loss)

Reclassification adjustment to net income (loss)

Tax effects

Balance, December 31, 2020

Other comprehensive income (loss)

Reclassification adjustment to net income (loss)

Tax effects

Balance, December 31, 2021

Other comprehensive income (loss)

Reclassification adjustment to net income (loss)

Tax effects

Balance, December 31, 2022

Earnings per share

Foreign
Currency

Deferred Gain
(Loss) on Cash
Flow Hedging

Pension Plan
Adjustment

Total

(8,221) $

(341) $

(7,570) $

(16,132)

(896)

—

(658)

(718)

(642)

357

844

701

(332)

(770)

(633)

(9,775) $

(1,344) $

(6,357) $

(17,476)

(181)

—

(9,877) $

(865)

1,267

551

418

557

(269)

(638) $

5,950

478

(1,632)

2,970

654

(995)

(3,728) $

(5,444)

851

1,169

3,207

1,211

(1,185)

(14,243)

(359)

2,596

(8,924) $

4,158 $

(7,152) $

(11,918)

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:

Basic weighted average shares outstanding

Dilutive effect of share-based compensation awards

Diluted weighted average shares outstanding

Basic earnings (loss) per share:

Continuing operations

Discontinued operations

Basic and diluted earnings (loss) per share

Diluted earnings (loss) per share:

Continuing operations

Discontinued operations

Diluted earnings (loss) per share

2022

2021

2020

13,970

13,880

13,657

13,996

13,930

13,712

1.81 $

1.54 $

—

1.81 $

1.54 $

1.81 $

1.53 $

—

1.81 $

1.53 $

1.76

1.62

3.39

1.76

1.62

3.37

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)

NOTE 10 - Revenue

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 customer as 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.

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 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 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 our customers for incentive offerings, special pricing agreements, price competition,
promotions or other volume-based arrangements. The Company evaluated such agreements with our 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 our 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 satisfying the performance obligation (over time).

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)

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

Consumer products

Commercial products

Licensing

Total revenues

Year Ended

December 31

2022

2021

2020

573,898

612,795

568,685

61,455

5,596

40,978

4,621

30,066

4,962

640,949

658,394

603,713

Walmart Inc. and its global subsidiaries accounted for approximately 26%, 28%, and 35% of HBB’s revenue in 2022, 2021, and
2020, respectively. Amazon.com, Inc. and its subsidiaries accounted for approximately 23%, 22%, and 16% of HBB's revenue
in 2022, 2021, and 2020 respectively. HBB’s five largest customers accounted for approximately 61%, 61%, and 64% of
HBB’s revenue in 2022, 2021, and 2020, respectively.

NOTE 11 - Contingencies

Hamilton Beach Holding and its subsidiary are 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 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 or its subsidiary 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 for the period in which the ruling occurs, or in future periods.
Hamilton Beach Brands Holding Company was previously a defendant in a lawsuit seeking to hold the Company liable for the
unsatisfied portion of an agreed final judgment that plaintiff obtained against KC related to KC’s discontinuing operations
during the term of various store leases. Plaintiff voluntarily dismissed its lawsuit in the fourth quarter of 2022 without any
settlement or payment by the Company.

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.

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)

At December 31, 2022 and December 31, 2021, HBB had accrued undiscounted obligations of $3.2 million and $3.4 million
respectively, for environmental investigation and remediation activities. The decrease in the amount accrued at December 31,
2022 compared to December 31, 2021 is due to a change in the expected type and extent of investigation and remediation
activities associated with one of the sites. HBB estimates that it is reasonably possible that it may incur additional expenses in
the range of zero to $1.5 million related to the environmental investigation and remediation at these sites. As of December 31,
2022, HBB has $1.0 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 $1.2 million asset associated with the reimbursement of costs associated with two sites.

NOTE 12 - Income Taxes

The components of income (loss) from continuing operations before income taxes and the income tax expense (benefit) for the
years ended December 31 are as follows:

Income (loss) from continuing operations before income taxes

Domestic

Foreign

Income tax expense (benefit) within continuing operations

Current income tax expense (benefit):

Federal

State

Foreign

Total current

Deferred income tax expense (benefit):

Federal

State

Foreign

Total deferred

2022

2021

2020

34,400 $

27,187 $

31,140

(1,971)

1,770

2,592

32,429 $

28,957 $

33,732

6,297 $

2,520 $

2,463

(1,970)

6,790

(669)

(153)

1,194

372

1,015

2,006

5,541

1,815

556

(261)

2,110

7,006

1,877

2,213

11,096

(924)

(325)

(182)

(1,431)

7,162 $

7,651 $

9,665

The Company made $5.3 million and $6.4 million federal income tax payments during 2022 and 2021, respectively, to the IRS.
No federal income tax payments were made during 2020. The Company made foreign and state income tax payments of $4.0
million, $2.6 million, and $2.9 million during 2022, 2021, and 2020, respectively. Income tax refunds totaled $0.5 million in
2022 and $1.0 million in 2020. No income tax refunds were received in 2021.

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

Income (loss) from continuing operations before income taxes

$ 32,429

$ 28,957

$ 33,732

Statutory taxes at 21%

6,810

21.0 % $

6,081

21.0 % $

7,092

21.0 %

2022

2021

2020

State and local income taxes

Valuation allowances

Other non-deductible expenses
Credits

Effect of foreign operations

Loss on Kitchen Collection dissolution

Unrecognized tax benefits

Other, net

Income tax provision

1,850

5.7 %

1,357

4.7 %

1,136

642

2.0 %

384
(900)

1.2 %
(2.8) %

(526)

(1.6) %

—

— %

(1,179)

(3.6) %

297

579
(681)

(399)

—

687

1.0 %

2.0 %
(2.4) %

(1.4) %

— %

2.4 %

614

415
(700)

120

616

708

3.4 %

1.8 %

1.2 %
(2.1) %

0.4 %

1.8 %

2.1 %

0.2 %

(270)

(0.9) %

(336)

(1.0) %

7,162

22.1 % $

7,651

26.4 % $

9,665

28.7 %

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:

Deferred tax assets

Tax carryforwards

Inventory

Accrued expenses and reserves

Other employee benefits

Other

Total deferred tax assets

Less: Valuation allowances

Deferred tax liabilities

Inventory

Accrued pension benefits

Depreciation and amortization

Total deferred tax liabilities

Net deferred tax asset

December 31

2022

2021

2,195 $

1,216

3,846

2,835

1,155

11,247

(2,153)

9,094

—

3,130

2,847

5,977

3,117 $

2,841

2,084

7,338

2,852

1,046

16,161

(2,095)

14,066

550

4,119

5,355

10,024

4,042

As of December 31, 2022 and 2021, 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.

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)

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

Non-U.S. net operating loss

December 31, 2022

Net deferred tax
asset

Valuation
allowance

Carryforwards
expire during:

1,923 $

1,923

2023 - Indefinite

December 31, 2021

Net deferred tax
asset

Valuation
allowance

Carryforwards
expire during:

2,841 $

1,399

2022 - Indefinite

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, 2022, the cumulative unremitted earnings of the Company's foreign subsidiaries are approximately $20.1
million. The Company has recorded the tax impact for the unremitted earnings as allowed under the Tax Cuts and Jobs Act (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 new rules under the Tax Act. 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, 2022, 2021, and 2020. Approximately $0.2 million, $3.8 million, and $4.0 million of these gross amounts as of December
31, 2022, 2021, and 2020, 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.

The balances in the table below as of December 31, 2020 and December 31, 2021 include unrecognized tax benefits, including
interest and penalties, related to an unresolved Mexico tax matter. The interest and penalties on these unrecognized tax benefits
were reversed during the second quarter of 2022 due to a change in the Company's position on the matter.

Balance at January 1

2022

2021

2020

3,855 $

4,114 $

4,266

Additions (reductions) based on tax positions related to prior years

(3,476)

(110)

Additions based on tax positions related to the current year

Reductions for lapse of statute of limitations

Reductions due to settlements with taxing authorities

(194)

—

(189)

(116)

130

(166)

—

Balance at December 31

256 $

3,855 $

4,114

The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The
Company recognized income of $1.5 million related to the reversal of interest and penalties as of December 31, 2022 and
expense of $1.1 million and $0.7 million related to interest and penalties as of December 31, 2021 and 2020, respectively. The
total amount of interest and penalties accrued was $1.9 million and $0.7 million as of December 31, 2021 and 2020,
respectively. There were no accruals for interest and penalties as of December 31, 2022.

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)

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, and exam years from 2017 onwards remain open for federal tax returns. The Company is generally open for
examination of state and foreign jurisdictions for the tax year 2016 and beyond. 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 13 - 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. The Company's U.S. plan was frozen, effective December 31, 1996, for participation and
benefit accrual purposes (except cash balance interest credits required by law). Similarly, the Company’s non-U.S. plan was
frozen, effective December 31, 2008.

During the second quarter of 2022, the Board of Directors of HBB approved the termination of the Company's U.S. defined
benefit pension plan (the "Plan") with an effective date of September 30, 2022. The Plan was previously frozen, effective
December 31, 1996, for participation and benefit accrual purposes (except cash balance interest credits required by law). The
Company has started the process to terminate and settle 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. We currently expect that all surplus assets remaining after the Plan termination will be transferred to a qualified
replacement plan.

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

U.S. Plan

Discount rate for pension benefit obligation

Discount rate for net periodic benefit (income) expense

Expected long-term rate of return on assets for net periodic pension (income) expense

Non-U.S. Plan

Discount rate for pension benefit obligation

Discount rate for net periodic benefit (income) expense

Expected long-term rate of return on assets for net periodic pension (income) expense

2022

2021

2020

5.34 %

3.22 %

6.44 %

5.15 %

2.90 %

4.75 %

2.46 %

1.87 %

7.25 %

2.90 %

2.38 %

4.75 %

1.87 %

2.88 %

7.50 %

2.38 %

2.96 %

5.00 %

In the third quarter of 2022, the Company remeasured the Plan which was triggered by the level of lump sum distributions from
the Plans' assets exceeding the Plan's service and interest cost threshold. The discount rate for net periodic benefit (income)
expense used during the period January 1, 2022 to September 30, 2022 was 2.46%. Due to the remeasurement in the third
quarter, the discount rate used for the settlement charge and for the net periodic benefit (income) expense for the period October
1, 2022 to December 31, 2022 period was 5.49%. A discount rate of 5.34% was used for the fourth quarter 2022 settlement
charge. The expected long-term rate of return on assets used for the net periodic benefit (income) expense used during the
period January 1, 2022 to September 30, 2022 was 7.25%. The expected long-term rate of return on assets used for the net
periodic benefit (income) expense for the period October 1, 2022 to December 31, 2022 period was 4.00%. For determining
our U.S. plan and non-U.S. plan 2023 pension net periodic benefit (income) expense, our expected rate of return assumptions
are 4.0% and 6.0%, respectively.

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)

Set forth below is a detail of the net periodic pension (income) expense, included in other expense (income), net for the defined
benefit plans for the years ended December 31:

U.S. Plan

Interest cost

Expected return on plan assets

Amortization of actuarial loss

Settlement loss

Net periodic pension (income) expense

Non-U.S. Plan

Interest cost

Expected return on plan assets

Amortization of actuarial loss (gain)

Net periodic pension (income) expense

2022

2021

2020

478 $

338 $

527

(1,820)

(2,033)

(2,011)

520

347

591

—

631

—

(475) $

(1,104) $

(853)

127 $

118 $

(261)

(16)

(260)

(150) $

(79) $

128

(253)

(55)

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:

U.S. Plan

Current year actuarial loss (gain)

Settlement loss

Amortization of actuarial loss

2022

2021

2020

5,558 $

(2,228) $

(1,080)

(347)

(520)

—

(591)

—

(631)

Total recognized in other comprehensive loss (income)

4,691 $

(2,819) $

(1,711)

Non-U.S. Plan

Current year actuarial loss (gain)

Amortization of actuarial (loss) gain

Total recognized in other comprehensive loss (income)

(114) $

(742) $

(63)

(98) $

(805) $

236

(70)

166

F-32

Table of Contents
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:

Change in benefit obligation

Projected benefit obligation at beginning of year

17,004 $

4,607 $

18,978 $

5,000

2022

2021

U.S.
Plan

Non-U.S.
Plan

U.S. Plan

Non-U.S.
Plan

Interest cost

Actuarial (gain) loss

Benefits paid

Settlements

Foreign currency exchange rate changes

Projected benefit obligation at end of year

Accumulated benefit obligation at end of year

Change in plan assets

478

(952)

(1,497)

(538)

—

127

(979)

(265)

—

(252)

338

(649)

(1,663)

—

14,495 $

3,238 $

17,004 $

14,495 $

3,238 $

17,004 $

118

(309)

(228)

—

4,607

Fair value of plan assets at beginning of year

33,019 $

5,772 $

31,070 $

5,497

Actual return on plan assets

Benefits paid

Settlements

Other

Foreign currency exchange rate changes

Fair value of plan assets at end of year

Funded status at end of year

Amounts recognized in the balance sheets consist of:

(4,690)

(1,497)

(538)

—

(598)

(265)

—

(178)

(330)

3,612

(1,663)

—

676

(228)

—

(173)

26,294 $

4,401 $

33,019 $

5,772

11,799 $

1,163 $

16,015 $

1,165

Deferred costs

11,799 $

1,163 $

16,015 $

1,165

Components of accumulated other comprehensive loss consist of:

Actuarial loss

Deferred taxes

(9,301) $

(321) $

(4,610) $

2,378

1,179

(6,923) $

(229) $

(3,431) $

(419)

122

(297)

During 2022, the Company recognized a pre-tax pension settlement loss in Other expense (income), net of $0.3 million,
triggered by the level of lump sum distributions from the Plans' assets exceeding the Plan's service and interest cost threshold.
The actuarial loss included in accumulated other comprehensive loss expected to be recognized in net periodic pension
(income) expense in 2023 is $0.4 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 2023.

Pension benefit payments are made from assets of the pension plans.

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)

Given the Company's plan to terminate the Plan, the below reflects the timing and value of the estimated benefit payments for
lump sums expected to be paid out to participants and the amount expected to be paid for annuity contracts in anticipation of
terminating the plan. Future pension benefit payments expected to be paid from assets of the pension plans are:

2023

2024

2025

2026

2027

2028-2032

U.S. Plan

Non-U.S. Plan

3,795 $

11,375

—

15,170 $

223

231

238

246

257

1,226

2,421

Historically, the Company employed a total return on investment approach whereby a mix of equities and fixed income
investments were used to maximize the long-term return of plan assets for a prudent level of risk. In light of the Plan
termination process, volatility in the market, and the Plan's funding status, the Plan transferred a significant portion of its assets
to lower risk investments in 2022 to move towards a liability driven investing strategy whereby the assets are primarily fixed
income investments. The fixed income investments that were chosen under this strategy, while not precisely the same, are
meant to parallel the investments selected in determining the discount rate used to calculate the Company’s pension liability.

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:

U.S. equity securities

Non-U.S. equity securities

Fixed income securities

Money market

2022
Actual
Allocation

2021
Actual
Allocation

Target Allocation
Range

— %

95.9 %

4.1 %

48.3 %

0.0% - 5.0%

19.8 %

0.0% - 5.0%

31.3 % 95.0% - 100.0%

0.6 %

0.0% - 5.0%

F-34

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

The following is the actual allocation percentage and target allocation percentage for the Non-U.S. pension plan assets at
December 31:

Canadian equity securities

Non-Canadian equity securities

Fixed income securities

Money market

2022
Actual
Allocation

2021
Actual
Allocation

Target Allocation
Range

40.0 %

40.6 %

19.4 %

— %

34.2 % 25.0% - 35.0%

38.3 % 25.0% - 35.0%

27.5 % 30.0% - 50.0%

— %

0.0% - 5.0%

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. equity securities

Non-U.S. equity securities

Fixed income securities

Money market

Total

Defined Contribution Plans

U.S. Plan

Non-U.S. Plan

2022

2021

2022

2021

—

25,213

1,081

15,957

1,060

6,535

10,330

197

2,488

853

—

1,325

2,857

1,590

—

26,294

33,019

4,401

5,772

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's U.S. plan provides employer safe harbor contributions based on plan provisions and both
defined contribution retirement plans provide for a separate employer contribution. These plans permit additional profit-sharing
contributions, determined annually, that are based on a formula that includes (i) the effect of actual operating profit results
compared with targeted operating profit results and (ii) the age and/or compensation of the participants. Total costs, including
Company contributions, for these plans were $5.2 million in 2022, $5.0 million in 2021 and $5.1 million in 2020.

NOTE 14 - 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:

Revenue from unaffiliated customers

Property, plant and equipment, net

Revenue from unaffiliated customers

Property, plant and equipment, net

Revenue from unaffiliated customers

Property, plant and equipment, net

2022

2021

2020

U.S.

Other

Consolidated

504,449 $

136,500 $

640,949

24,207 $

3,623 $

27,830

524,093 $

134,301 $

658,394

26,604 $

3,881 $

30,485

493,573 $

110,140 $

603,713

18,021 $

5,469 $

23,490

No single country outside of the U.S. comprised 10% or more of HBB's revenue from unaffiliated customers.

F-35

Table of Contents

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
HAMILTON BEACH BRANDS HOLDING COMPANY
YEAR ENDED DECEMBER 31, 2022, 2021, AND 2020

Description

2022

Reserves deducted from asset accounts:

Allowance for doubtful accounts

Deferred tax valuation allowances

2021

Reserves deducted from asset accounts:

Allowance for doubtful accounts

Deferred tax valuation allowances

2020

Reserves deducted from asset accounts:

Allowance for doubtful accounts

Deferred tax valuation allowances

Additions

Balance at
Beginning
of Period

Charged to
Costs and
Expenses

(In thousands)

Charged to
Other
Accounts
— Describe

Deductions
— Describe

Balance at
End of
Period (B)

1,036 $

(79) $

— $ —

(A)

2,095 $

568

— $

510

(C)

1,144 $

(179) $

— $

(71) (A)

2,102 $

170 $

— $

177

(C)

1,023 $

412 $

— $

291

(A)

7,625 $

614 $

— $ 6,137

(C,D)

957

2,153

1,036

2,095

1,144

2,102

(A)

(B)

(C)

(D)

Write-offs, net of recoveries and foreign exchange rate adjustments.

Balances which are not required to be presented and those which are immaterial have been omitted.

Foreign exchange rate adjustments and utilization of foreign entity losses.

Utilization of Kitchen Collection losses.

F-36

Corporate Information

Annual Meeting
The Annual Meeting of Stockholders of Hamilton Beach
Brands Holding Company will be held on May 10, 2023, at
11 a.m., at 5875 Landerbrook Drive, Cleveland, Ohio 44124

Legal Counsel
McDermott Will & Emery LLP
444 West Lake Street
Chicago, Illinois 60606

Form 10-K
Additional copies of the Company’s Annual Report on Form
10-K filed with the Securities and Exchange Commission
are available free of charge through the Company’s website,
www.hamiltonbeachbrands.com or by request to:

Independent Registered Public Accounting Firm
Ernst & Young LLP
950 Main Ave., Suite 1800
Cleveland, Ohio 44113

Investor Relations
Hamilton Beach Brands Holding Company
4421 Waterfront Drive
Glen Allen, Virginia 23060
E-mail: Louanne.nabhan@hamiltonbeach.com

Stock Transfer Agent and Registrar
Stockholder Correspondence:
Computershare
P.O. Box 505000
Louisville, KY 40233-5000

Overnight Correspondence:
Computershare
462 South 4th St., Suite 1600
Louisville, KY 40202

(800) 622-6757 (U.S., Canada and Puerto Rico)
(781) 575-4735 (International)

Stock Exchange Listing
The New York Stock Exchange
Symbol: HBB

Hamilton Beach Brands Holding Company’s
Investor Relations Website
Additional information on Hamilton Beach Brands Holding
Company may be found at its Investor Relations website,
www.hamiltonbeachbrands.com. The Company considers
this website to be one of the primary sources of information
for investors.

Brand Websites
www.hamiltonbeach.com
www.proctorsilex.com
www.hamiltonbeachcommercial.com
www.westonbrands.com
www.wolfgourmet.com
www.chisteam.com
www.bartesian.com
www.cloroxhomeappliances.com
www.smartsharpsbin.com
www.numilk.com

ANNUAL REPORT 2022

4421 Waterfront Drive, Glen Allen, VA 23060
hamiltonbeachbrands.com

An Equal Opportunity Employer