Hamilton Beach Brands Holding Company Annual Report 2023

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FY2023 Annual Report · Hamilton Beach Brands Holding Company

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Hamilton Beach Brands Holding Company | 2023 Annual Report

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OVERVIEW

About The Company

Hamilton Beach Brands Holding Company (The Company)

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.

The Company’s owned consumer brands include

Hamilton Beach®, Proctor Silex®, Hamilton Beach
Professional®, Weston®, and TrueAir®. The Company’s
owned commercial brands include Hamilton Beach
Commercial® and Proctor Silex Commercial®. The Company
licenses the brands for Wolf Gourmet® countertop
appliances, CHI® premium garment care products, Clorox™
True HEPA air purifiers, and Brita Hub™ countertop electric
water filtration appliances.

The Company has exclusive multiyear agreements to
design, sell, market, and distribute Bartesian® premium
cocktail delivery machines, and specialty appliances to
create Numilk® plant-based fresh milk on demand.

The Company’s Hamilton Beach Health subsidiary is
focused on expanding the Company’s participation in the

home health and medical market. In February 2024,
Hamilton Beach Health acquired HealthBeacon PLC,
a medical technology firm and strategic partner of the
Company. HealthBeacon develops connected devices
that enable patients with chronic conditions to manage
their injectable medication regimens at home, and it
provides other health services.

The Company’s leading portfolio of iconic consumer
brands ranges from value to luxury products, across a
wide range of price points.

The Company participates in more than 50 product

categories. The Company’s 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 the Company’s consumer
products is North America, including the United States,
Canada, Mexico, and Latin America. Our commercial
products are sold globally to food service and hospitality
customers around the world.

Registered Trademarks on Cover: 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.

STRATEGIC INITIATIVES FOR LONG-TERM GROWTH

The Company is investing
in six strategic initiatives
that are designed to
generate revenue growth,
margin expansion, and
strong cash flow over time.

2023 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

Provided by (used for) operating activities ...................................................................

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

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

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

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

Year Ended December 31

2023

2022

(In thousands, except per share amounts)

625,625

35,081

25,242

1.80

13,900

384,702

50,000

147,267

88,636

(5,174)

83,462

(70,072)

6,082

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

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.

HAMILTON BEACH BRANDS HOLDING COMPANYFROM OUR CEO

To Our Stockholders

In 2023, we delivered considerable
progress across several key aspects of
our business, positioning the Company
for success over the long term. We are
excited to carry the strong momentum
we built last year into 2024.

team. Our culture is centered around
Good Thinking®, which incorporates
customer focus, innovation and
teamwork, and inspires everything we
do. We believe our Good Thinking®
culture is a core strength.

Our top line outperformed the small

We aim to capitalize on our

kitchen appliance industry in 2023.
Our gross profit margin expanded
by 290 basis points. Operating profit
increased 22% over 2022 excluding
a one-time insurance recovery in the
prior year.

We generated cash from operating
activities of $88.6 million, the highest
in our Company’s history, reflecting our
focus on working capital improvements.
Priority uses of cash included significantly
reducing debt and returning capital to
shareholders through dividends and
share repurchases.

We continued to make meaningful
progress with our six strategic initiatives.

The successes we achieved
are attributable to the outstanding
capabilities of our hard-working

strengths in 2024 and beyond as we
continue our efforts to build long-term
shareholder value.

In 2023, our total revenue of $625.6
million decreased 2.4% compared to
2022, outperforming the industry’s
more than 5% decline. While the year
got off to a slow start, with retailers
continuing to manage inventory
conservatively, as the year unfolded
market conditions improved when
consumer spending and retail sales
showed resilience.

Importantly, our continued
investment in innovation, new
products and our strategic initiatives
enabled us to build our business
across a wide range of categories
and a broad group of North American

retail customers in brick & mortar,
omni-channel, and ecommerce only
channels. These wins enabled us to

IN 2023, WE DELIVERED
CONSIDERABLE PROGRESS
ACROSS SEVERAL
KEY ASPECTS OF OUR
BUSINESS, POSITIONING
THE COMPANY FOR
SUCCESS OVER THE
LONG TERM.

deliver a strong performance in the
second half of the year and created
momentum that carried into 2024.
Gross profit margin increased to
23.0% compared to 20.1% in 2022,

HAMILTON BEACH® NEW PRODUCTS

FlexBrew® Advanced
5-in-1 Coffee Maker

Slide & Lock™
Espresso Maker

Easy View XL Toaster Oven
with Sure-Crisp® Air Fry

Cordless
Food Chopper

ANNUAL REPORT 2023CORE GROWTH

PROCTOR SILEX®
NEW PRODUCTS

Compact 2-in-1
Garment Steamer/Iron

Simply-Crisp™ 4-slice
Toaster Oven/Air Fryer

SureCut™
Can Opener

due to lower product costs and
favorable product mix. Selling, general
and administrative expenses were
$108.4 million compared to $90.1
million, primarily reflecting higher
personnel-related expenses and the
benefit in 2022 of a one-time $10.0
million insurance recovery.

Excluding a one-time $10 million
insurance recovery from our 2022
results, operating profit for 2023
of $35.1 million was well ahead of
the prior-year’s $38.8 million.

Net income was $25.2 million, or
$1.80 per diluted share, compared to
net income of $25.3 million, or $1.81
per diluted share.

Cash flow before financing provided

$83.5 million compared to a use
of $5.7 million in 2022, reflecting
significant improvement in net working
capital. At the end of 2023, total debt
was $50.0 million compared to $110.9
million at the end of 2022. Net debt, or
total debt minus cash on the balance
sheet, was $34.6 million compared to
$110.0 million at the end of 2022.

We paid $6.1 million in dividends
and repurchased 250,772 shares
of our Class A common stock. The
Board increased our regular quarterly
dividend in 2023, as they have every
year since we became a public
company in 2017.

Strategic
Initiatives
We made meaningful progress
with our six strategic initiatives, which
support our overarching goal of long-
term value creation by driving revenue
growth, expanding margins, and
generating strong cash flow over time.
Four of our initiatives are focused

on expanding our presence in
markets where we can increase

the sales of higher priced, higher
margin products. These include the
premium, home health, and global
commercial markets, as well as our
core market that focuses on our
flagship Hamilton Beach® and Proctor
Silex® brands. Initiatives to accelerate
our digital transformation and leverage
partnerships and acquisitions support
our growth plans in all markets.

DRIVE CORE GROWTH

This initiative is focused on driving

the growth of our flagship Hamilton
Beach® and Proctor Silex® brands
in our core North American market.
Our Company has been serving
consumers across North America for
more than 100 years, earning the trust
of millions of consumers annually
based on product quality, durability
and innovation.

We provide significant support for
these two brands with a continuous
focus on refreshing existing products
and creating new ones, based on
consumer-driven research. The
brands and our new products are
also supported by robust digital
marketing, social media advertising
and influencer marketing programs.
We are realizing success with our new
brand positioning of Proctor Silex as
“Simply Better.”

Digital marketing includes providing

extensive online content, visuals
and video to engage shoppers.
We also focus on search engine
optimization. Our products have
gained important endorsements,
awards and recommendations from
several known, trusted sources.

Sales of our core consumer brands
in 2023 were even with 2022 despite
overall softness in the first half of the
year. Hamilton Beach® continued to
hold the number one brand position

HAMILTON BEACH BRANDS HOLDING COMPANYPREMIUM PRODUCTS

PREMIUM NEW PRODUCTS

Bartesian® Duet
Cocktail Maker

CHI® Lava™ Iron

Weston® 10 Tray Digital Food
Dehydrator with Oven-style Door

Hamilton Beach® Professional
Cordless Hand Mixer with
Infinite Speed Control

for small kitchen appliances in 2023
based on units sold. We gained share
in several categories.

GAIN SHARE IN THE
PREMIUM MARKET

We continue to develop, license
and acquire brands to increase our
participation in the premium market,
which has grown to account for 40% of
industry small kitchen appliance sales.

Our owned premium brands
include Weston® and Hamilton
Beach Professional®. We license the
brands for Wolf Gourmet® countertop
appliances, CHI® premium garment
care products, Clorox™ True HEPA air
purifiers, and Brita Hub™ countertop
electric water filtration appliances.
We have an exclusive multiyear
agreement to design, sell, market,
and distribute Bartesian® premium
cocktail delivery machines.

In March 2023, we were excited
to announce a new agreement
to provide the next generation of
specialty appliances for use with
Numilk® raw ingredients to create
a variety of fresh plant-based
milk products in the home and in
commercial establishments. The
new appliances are launching
throughout the first half of 2024.

An overall 4% decrease in revenue
from premium brands in 2023 reflected
the impact of inflationary pressures
on consumer spending earlier in the
year. In the fourth quarter, revenue
from premium brands increased 10%.
Premium brands accounted for 15% of
total revenue in 2023.

We plan to further expand our
presence in the premium market with
new product development, digital
marketing, and by pursuing additional
licensing agreements and other
collaborative arrangements.

ACCELERATE GROWTH OF
HAMILTON BEACH HEALTH
We began to focus on the fast-
growing home medical market in

2021 in response to the rapidly
evolving use of at-home healthcare
solutions. Drawing on decades of
experience as a trusted resource in
the home, we created the Hamilton
Beach Health® brand.

In February 2024, Hamilton Beach
Health acquired HealthBeacon PLC,
a medical technology firm and
strategic partner of ours since 2021.
HealthBeacon develops connected
devices that enable patients with
chronic conditions to manage their
injectable medication regimens
at home, and it provides other
health services. The revenue for
all HealthBeacon offerings is from
subscription services.

WE AIM TO CAPITALIZE
ON OUR STRENGTHS IN
2024 AND BEYOND AS WE
CONTINUE OUR EFFORTS
TO BUILD LONG-TERM
SHAREHOLDER VALUE.

We believe the acquisition of
HealthBeacon is an attractive
investment with the potential to
increase shareholder value over time.
Growth opportunities are expected
to be driven by the development of
in-home healthcare management
tools, including Remote Therapeutic
Monitoring systems.

The acquisition combines the
trusted brand name of Hamilton
Beach® and our leadership in
innovation, engineering, and product
development with HealthBeacon’s
digital capabilities and patented
technologies. Hamilton Beach
Health and HealthBeacon together
are focused on improving patient

ANNUAL REPORT 2023
PREMIUM PRODUCTS

outcomes and accelerating access to
more patients and new opportunities.
The initial focus is on providing the

Smart Sharps Bin™ from Hamilton
Beach Health to patients in the
United States, principally through
the specialty pharmacy channel,
and globally through conventional
pharmaceutical companies. Combined
with a companion app, the Injection
Care Management System tracks
adherence and persistence with
medication schedules through
reminders, educational tools, and
artificial intelligence driven data
analytics. It provides for the safe and
convenient disposal of used sharps
through the U.S. Postal Service’s
approved mail-back program.

Hamilton Beach Health is actively

engaged in exploring additional
collaboration opportunities with other
companies in the home medical market.

LEAD IN THE GLOBAL
COMMERCIAL MARKET

This initiative is focused on securing
new business and increasing sales
with existing customers in the food

service and hospitality industries
throughout the world.

The Hamilton Beach® brand, with its

reputation for performance, reliability
and differentiated products, is driving

WE MADE MEANINGFUL
PROGRESS WITH OUR SIX
STRATEGIC INITIATIVES,
WHICH SUPPORT OUR
OVERARCHING GOAL
OF LONG-TERM VALUE
CREATION.

growth of commercial products.
Continuing to develop products that
create a competitive advantage
in our core blending and mixing
categories, as well as expanding into
new categories organically, is the
cornerstone of the strategy.

Commercial customers include
restaurants, fast food chains, bars
and hotels. Our products are sold
through distributors and increasingly
through internal sales capabilities.
Our commercial products are sold in
more than 100 countries, and more
than 50% of revenue is from outside
the U.S.

In 2023, commercial revenue
decreased 15% compared to 2022
when revenue grew 50%, driven by a
continued strong rebound in the food
service and hospitality industries from
pandemic-driven demand softness.
Sales in the international food service
market accounted for the decrease,
as several markets were overstocked
and unrest in certain countries had an
unfavorable impact on sales. In 2023,
sales of our commercial products
accounted for 8% of total revenue.
Growth plans include expanding
customer relationships with regional
and global restaurant and hotel chains.
Building strength in ecommerce,
which is becoming more important
in the commercial market, is also
a focus.

PREMIUM NEW PRODUCTS

Clorox™ Ultra Air Purifier
with UV-C Light

Brita Hub™ Electric Countertop
Water Filtration Appliance

Numilk®
Home Machine

HAMILTON BEACH BRANDS HOLDING COMPANYHOME HEALTH AND WELLNESS PRODUCTS

HOME HEALTH AND WELLNESS NEW PRODUCTS

Smart Sharps Bin™ from Hamilton Beach Health®

The Smart Sharps Bin and its
companion app track patient adherence.

The system provides
secure injector storage.

The system enables safe disposal
through a mail-back service.

ACCELERATE OUR DIGITAL
TRANSFORMATION

The ecommerce channel represents

a strong and growing part of our
business. Brand reputation, product
features, innovation and star ratings
all play a critical role in driving online
sales, and these are all areas where
we excel.

Ecommerce sales as a percentage

of total revenue in 2023 were 39%,
increasing 1% compared to 2022.
All our brands earned star ratings
of 4.3 or better, and four of our
brands earned 4.5 stars or better.
Our products receive favorable
reviews from consumers, experts,
and influencers. High star ratings are
a result of our focus on designing
and engineering consumer preferred
products and implementing leading
quality control standards.

We continue to invest in gaining
share in the ecommerce channel. We
collaborate closely with omnichannel
and online-only retail customers
to leverage fast-paced changes.
Our online marketing programs are
designed to connect with consumers,

thereby increasing awareness and
sell-through of our products. These
include providing detailed online
product content, search optimization,
advertising, attracting favorable
reviews and strong star ratings, as well
as robust social media strategies.
Our U.S. distribution center
provides the Company with the
capability to ship small packages
directly to consumers in partnership
with retail customers.

LEVERAGE PARTNERSHIPS
AND ACQUISITIONS

This initiative is focused on

identifying and securing businesses
with a strategic fit to our portfolio.
We are actively engaged in the pursuit
of additional trademark licensing
agreements, strategic alliances, and
acquisitions to drive growth in all our
markets, including accelerating growth
in the home health market.

Over the past several years,
we have entered into 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.

OUR COMPANY HAS
MANY COMPETITIVE
ADVANTAGES THAT WE
PLAN TO LEVERAGE IN
2024 AND BEYOND.

Looking Ahead
We announced some exciting
news last month when our Board
of Directors appointed Scott Tidey
as President of our Company,
effective February 19, 2024. Scott’s
appointment was part of a long-
standing succession plan. I will

ANNUAL REPORT 2023COMMERCIAL PRODUCTS

COMMERCIAL PRODUCTS

Summit®
Edge High-
Performance
Blender

MixStation™
Heavy-Duty
Drink Mixer

BigRig™
Immersion
Blender

and its related challenges, I want
to again recognize our team’s
incredibly hard work and enormous
success in navigating us through the
massive supply chain disruptions.
Our employees took a “one team”
approach to overcoming these
challenges, often going above
and beyond the call of duty under
extraordinary pressures. They kept
focus on key steps needed to ensure
a bright future, in particular keeping
the pipeline of innovative new
products flowing.

Importantly, we kept investing team

and company resources into our
strategic initiatives. The combination
of short-term firefighting and keeping
our focus on building for the future
requires a very strong team. On behalf
of the Board and our executive team,
I thank each and every one of our
employees for their contributions to
our success.

I also want to thank the many
others who are invaluable to our
success, starting with our committed
Board of Directors and their wisdom,
guidance, engagement and support.
I thank our customers, suppliers and
business partners for their outstanding
collaboration and support of our
brands and products.

We appreciate our shareholders’
investment and their belief in our
potential. We are excited about the
opportunity to create long-term value
for all of our stakeholders.

Gregory H. Trepp
Chief Executive Officer
March 6, 2024

Numilk®
Commercial
Machine

continue in my role as Chief Executive
Officer. Scott joined the Company
in 1993 and has served in roles of
increasing responsibility in sales and
marketing, most recently as Senior
Vice President-Global Sales.

Scott is an incredibly effective
member of our executive leadership
team and has helped us navigate
through some of the most challenging
and exciting times in our Company’s

WE BELIEVE WE ARE WELL
POSITIONED TO CONTINUE
THE MOMENTUM WE
CARRIED INTO 2024
AND DELIVER A SOLID
PERFORMANCE.

history. He has been instrumental
in the successful execution of our
strategic initiatives to expand, diversify
and grow our business. I look forward
to working with Scott on a smooth
transition as he assumes his new role.
Our Company has many competitive

advantages that we plan to leverage
in 2024 and beyond. We benefit from
our leadership in the small kitchen
appliance industry, which has a long
history of strong, durable demand.
Our portfolio is comprised of leading,
trusted brands. We are a proven
innovator. Our retailer relationships
span a wide-ranging group of
customers in the brick & mortar, omni-
channel, and ecommerce channels.
We believe we are well positioned

to continue the momentum we
carried into 2024 and deliver a
solid performance, all due to the
outstanding work of our team. As we
have emerged from the pandemic

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, 2023.

HAMILTON BEACH BRANDS HOLDING COMPANYHAMILTON BEACH BRANDS HOLDING COMPANY

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
Chief Executive Officer

Sally M. Cunningham
Senior Vice President,
Chief Financial Officer and Treasurer

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

Executive Chairman,
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
Chief Executive Officer,
Hamilton Beach Brands Holding Company

Clara Williams
President and Founder,
The Clara Williams Company

R. Scott Tidey
President

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

ANNUAL REPORT 2023UNITED 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, 2023

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

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, 2023 (the last business day of the
registrant’s most recently completed second fiscal quarter): $65,108,439

Number of shares of Class A Common Stock outstanding as of March 1, 2024: 10,306,823
Number of shares of Class B Common Stock outstanding as of March 1, 2024: 3,613,096

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company’s Proxy Statement for its 2024 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 1C. CYBERSECURITY

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

Item 16. FORM 10-K SUMMARY

SIGNATURES

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

F-1

Table of Contents

Item 1. BUSINESS

General

PART I

Throughout this Annual Report on Form 10-K and the notes to consolidated financial statements, references to “Hamilton
Beach Holding”, “the Company”, “we”, “us” and “our” and similar references are to Hamilton Beach Brands Holding Company
and its subsidiaries on a consolidated basis unless otherwise noted or as the context otherwise requires. Hamilton Beach Brands
Holding Company is a holding company and operates through its indirect, wholly owned subsidiary, Hamilton Beach Brands,
Inc., a Delaware corporation (“HBB”). HBB is the Company’s single reportable segment.

We are 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.

We make our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”)
available, free of charge, through our 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.

Recent Developments

On February 5, 2024, we announced that our Hamilton Beach Health® subsidiary acquired HealthBeacon PLC
(“HealthBeacon”), a medical technology firm and strategic partner of the Company. HealthBeacon develops connected devices
that enable patients with chronic conditions to manage their injectable medication regimens at home and provides other health
services. This acquisition is a key step in growing our Hamilton Beach Health® business, which empowers people to take
control of their health and wellness through innovative solutions.

Sales and Marketing

We design, market and distribute 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. We also design, market and distribute commercial products for restaurants, fast food chains, bars and hotels.
We generally market our “good” and “better” consumer products under the Hamilton Beach® and Proctor Silex® brands. We
participate in the premium market with our owned brands Hamilton Beach® Professional and Weston® farm-to-table and field-
to-table food processing equipment. Additionally, we participate 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. We continue to expand in the home,
health and wellness market, selling air purifiers under the Clorox® and TrueAir® brands and Brita® water filtration systems. Our
acquisition of HealthBeacon represents a key expansion in our home medical category. Prior to the acquisition, we had an
existing strategic alliance to sell Hamilton Beach Health® smart Injection Care Management Systems under our Hamilton
Beach Health® brand. We market our commercial products under the Hamilton Beach Commercial® and the Proctor Silex
Commercial® brands. We supply private label products on a limited basis. We also license certain of our trademarks to various
licensees in categories such as microwave ovens, among others. Sales promotion activities are supported through print and
digital marketing vehicles. We promote certain of our innovative products primarily through the use of digital and print
advertising.

Customers

Sales in North America are generated predominantly by a network of inside sales employees to mass merchandisers,
ecommerce retailers, national department stores, variety store chains, drug store chains, specialty home retailers, distributors,
restaurants, bars, hotels and other retail outlets. Walmart Inc. and its global subsidiaries (“Walmart”) accounted for
approximately 27%, 26% and 28% of our revenue in 2023, 2022 and 2021, respectively. Amazon.com, Inc. and its subsidiaries
(“Amazon.com”) accounted for approximately 24%, 23% and 22% of our revenue in 2023, 2022 and 2021, respectively. Our
five largest customers accounted for approximately 64%, 61% and 61% of our revenue for the years ended December 31, 2023,
2022 and 2021, respectively.

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Product Warranty

Our 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 we may repair or replace, at our option, those products returned under warranty.

Seasonality and Working Capital

The market for small electric household and specialty housewares appliances is highly seasonal in nature. The majority of our
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 our products, we generally use a substantial amount of cash or borrowings under our $150.0 million
senior secured floating-rate revolving credit facility (the “HBB Facility”) to finance inventory in anticipation of the fall holiday-
selling season.

Patents, Trademarks, Copyrights and Licenses

We hold patents and trademarks registered in the United States (“U.S.”) and foreign countries for various products. We believe
that our 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 our business.

Product Design and Development

We incurred $12.4 million, $11.8 million and $8.6 million in 2023, 2022 and 2021, respectively, in expenses on product design
and development activities.

Key Suppliers and Raw Material

Our products are produced to our specifications by third-party suppliers. We do not maintain long-term purchase contracts with
suppliers and operate mainly on a purchase order basis. We negotiate the purchases from our foreign suppliers in U.S. dollars.

During 2023, we purchased substantially all of our finished products from suppliers in China. We purchase our inventory from
approximately 60 suppliers, one of which represented more than 10% of purchases during the year ended December 31, 2023.
We believe the loss of any one supplier would not have a long-term material adverse effect on our business because there are
adequate supplier choices available that can meet our production and quality requirements. However, the loss of a supplier
could, in the short term, adversely affect our business until alternative supply arrangements are secured.

The principal raw materials used by our third-party suppliers to manufacture our products are plastic, glass, steel, copper,
aluminum and packaging materials. We believe adequate quantities of raw materials are available from various suppliers.

Competition

We believe the principal areas of competition with respect to our products are product design and innovation, quality, price,
product features, supply chain excellence, merchandising, promotion and warranty. We compete with many manufacturers and
distributors of housewares products. As brick-and-mortar retailers generally purchase a limited selection of branded, small
electric appliances, we compete with other suppliers for retail shelf space. In the ecommerce channel, we must compete with a
broad list of competitors for brand reputation through compelling content, strong ratings and reviews from consumers.

To meet these competitive challenges, we have focused on continued innovation in our leading brands as well as expanding into
new categories using existing core competencies. Our presence in a significant number of housewares product categories across
various price points allows us to meet the needs of a wide range of retailers and consumers. Based on publicly available
information about the industry, we are 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 U.S., in brick-and-mortar and ecommerce
channels, based on units sold. To a lesser degree, our retail product lines compete outside of North America. Our commercial
products compete globally and have generated a strong position in these markets.

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Government Regulation

Our operations are subject to various laws and regulations administered by federal, state, local and foreign government
agencies, including laws and regulations related to health, safety and environmental matters. Based on current information, we
do not expect compliance with environmental requirements to have a material adverse effect on our financial condition or
results of operations.

As a marketer and distributor of consumer products, we are subject to the Consumer Products Safety Act and the Federal
Hazardous Substances Act, which empowers 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 us to
repair, replace or refund the purchase price of one or more of our products, or we may voluntarily do so. In addition, the Food
and Drug Administration (“FDA”), and other governmental authorities regulate the development, manufacture, sale and
distribution of certain of our products. For certain products in our Hamilton Beach Health® business, government regulations
may require detailed inspection of, and controls over, research and development, clinical investigations, product approvals and
manufacturing, marketing and promotion, sampling, distribution, record-keeping, storage and disposal practices. We are also
subject to data privacy and security regulations, tax and securities regulations, accounting and reporting standards and other
financial laws and regulations.

Past, current or future regulations, their interpretation, or their application could have a material adverse impact on our
operations. For example, current or future regulations may be passed that could prevent, delay, revoke or result in the rejection
of regulatory clearance of certain of our products. We cannot predict the effect on our operations resulting from current or
future governmental regulation or the interpretation or application of these regulations. In addition, if we fail to comply with
any applicable regulatory requirements, penalties could be imposed on us.

In addition, 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. We
endeavor to design our products to meet the certification requirements of, and to be certified in, each of the jurisdictions in
which they are sold.

For more information about the risks we face regarding regulatory requirements, see Part I, Item 1A of this Annual Report
titled, “Risk Factors - Government regulations could impose costly requirements on our business.”

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, 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.

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As of December 31, 2023, we employed approximately 700 employees in four countries—Canada, China, Mexico and the
United States, of which approximately 98% were full time and the remaining were part time. Approximately 2% of our
workforce is covered by collective bargaining agreements, all of whom are based in Canada. There are approximately 500
employees in the United States with about half of those based at our headquarters in Richmond, Virginia, which is home to our
product design, development and marketing teams as well as our 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 of our 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 our 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, 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.

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Information about our Executive Officers

The following table sets forth, as of March 6, 2024, 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

Positions

Gregory H. Trepp

R. Scott Tidey

Director and Chief Executive Officer of Hamilton Beach Holding (from February 2024), Director, President and
Chief Executive Officer of Hamilton Beach Holding (from prior to 2019 to February 2024)

President of Hamilton Beach Holding (from February 2024), Senior Vice President, Global Sales of HBB (from
January 2023 to February 2024), 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 2019 to March
2021)

Sally M. Cunningham

Senior Vice President, Chief Financial Officer and Treasurer of Hamilton Beach Holding (from May 2023), Senior
Vice President and Chief Financial Officer of Hamilton Beach Holding (from March 2023 to May 2023), Finance
Consultant of Azurite, LLC (from November 2021 to February 2023), Senior Vice President and Chief Financial
Officer of Ascent Industries Co. (a steel and chemical production and distribution company), (from June 2020 to
August 2021), Vice President, Corporate Administration of Ascent Industries Co. (from prior to 2019 to June 2020)

Lawrence K. Workman, Jr.

Senior Vice President, General Counsel and Secretary of Hamilton Beach Holding (from July 2021), Vice President,
Business Development and Corporate Counsel of Coca-Cola Consolidated, Inc. (a Coca-Cola manufacturing and
bottling company), (from prior to 2019 to July 2021)

Item 1A. RISK FACTORS

Our business is subject to various risks and uncertainties. Any of the risks and uncertainties described below could materially
adversely affect our business, financial condition and results of operations and should be considered in evaluating us. Although
the risks are organized by headings and each risk is described separately, many of the risks are interrelated. While we believe
we have identified and discussed below the key risk factors affecting our business, there may be additional risks and
uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our
business, performance or financial condition in the future. You should not interpret the disclosure of any risk factor to imply
that the risk has not already materialized.

Industry Risks

Our business is sensitive to the strength of the North American consumer markets and weakness in these markets could
adversely affect our business.

The strength of the economy in the U.S., and to a lesser degree in Canada and Mexico, has a significant impact on our
performance. Weakness in consumer confidence and poor financial performance by mass merchandisers, ecommerce retailers,
warehouse clubs, department stores or any of our 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 the Company.
Additionally, in periods of uncertain economic conditions, such as inflation, rising interest rates, recessions or economic
slowdowns, our 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.

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

We rely on several key customers. During fiscal 2023, Walmart and Amazon.com accounted for approximately 27% and 24%
of our revenue, respectively. Although we have long-established relationships with many customers, including Walmart and
Amazon, we do 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 our revenue and profitability and an inability to sustain or grow our business.

We must receive a continuous flow of new orders from our large, high-volume retail customers. Failure to obtain anticipated
orders or delays or cancellations of orders or significant pressure to reduce prices from key customers could impair our ability
to sustain or grow our business. In addition, we may be unable to continually meet the needs of those customers, which could
damage our customer relationships and result in reduced new orders.

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As a result of dependence on key customers, we could experience a material adverse effect on our revenue and profitability if
any of the following were to occur:

•

the insolvency or bankruptcy of any key customer;

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

a strike or work stoppage at a key customer facility, which could affect both its suppliers and customers.

If we were to lose, or experience a significant decline in business from any major customer, or if any major customers were to
go bankrupt, we might be unable to find alternate distribution outlets.

Additionally, as cyber attacks are increasing in frequency, we are vulnerable to a decline in revenue in the event of a cyber
attack at any of our key customers. If our key customers’ websites or systems are disrupted for a considerable amount of time,
whether due to a cyber attack or other disruption, we could experience lost sales to consumers and the key customers’ inability
to submit new purchase orders, which could result in reduced revenue and profitability.

The increasing concentration of our 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.

During fiscal 2023, our five largest customers accounted for a total of approximately 64% of our revenue. With the growing
trend towards the concentration of the industry and our branded small electric household and specialty housewares appliance
sales among fewer retailers, we are increasingly dependent upon fewer customers whose bargaining strength is growing as a
result of this concentration. We sell 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 our larger customers use their own private label brands on household appliances that compete
directly with some of our products. As the retailers in the small electric household appliance industry become more
concentrated, competition for sales to these retailers may increase and cause pricing pressures, which could materially reduce
our revenue and profitability.

If we are unable to continue to enhance existing products, as well as develop and market new products that respond to
consumer 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.

We may not be able to compete as effectively with competitors, and ultimately satisfy the needs and preferences of consumers,
unless we can continue to enhance existing products and develop new innovative products for the markets in which we
compete. 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 we may not be able to timely develop and introduce product improvements or
new products. In addition, the development of new products in our Hamilton Beach Health® business may require significant
lead times for research and development, clinical investigations and product approvals, as well as significant capital
investments. Competitors’ new products may beat our products to market, be higher quality or more reliable, be more effective
with more features, obtain better market acceptance or render our products obsolete. Any new products that we develop 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.

Our inability to compete effectively with competitors in our 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, we compete with many manufacturers and distributors of housewares products. Additional
competitors may also enter this market and cause competition to intensify. For example, some of our 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 we fail to compete effectively with these manufacturers and
distributors, we could lose market share and experience a decrease in revenue, which would adversely affect our results of
operations.

We also compete with established companies, a number of which have substantially greater facilities, personnel, financial and
other resources. In addition, we compete with our 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, we could lose market share and revenue.

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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
online consumers. We have invested in industry-leading selling and marketing capabilities, while maintaining our 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.

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

Sales of our products are related to consumer spending, including general economic conditions affecting disposable consumer
income such as unemployment rates, business conditions, inflation rates, 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, we generally recognize 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 our past operating results 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 and impacts from global military conflicts.

Factors that are largely beyond our control, such as inflation and commodity prices for the raw materials needed by suppliers of
our products, may affect the cost of products. Historically, the costs of our products have fluctuated due to cost pressures
resulting from economic conditions. As an example, our 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 if we are unable to pass price increases on to our customers. The Company has also
experienced increased transportation costs in the past due to global supply chain challenges, including the cost of ocean freight
from China, and could be subject to future increases in transportation costs. In addition, 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, shipping availability, port congestion, labor shortages
or other factors. 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 cannot predict if we will
be able to obtain alternative shipping sources within the time frames that we require and at a comparable cost, which could lead
to significant delays in shipping our products and additional costs.

Our distribution network is limited to one distribution center per region, which could result in significant delays or loss of sales
if there are disruptions at any of our distribution centers. There are several possibilities that could cause a disruption to our
distribution network such as, fires, floods, loss of power, severe weather, impacts from climate change, labor shortages,
equipment failures and lack of access to equipment. For example, our U.S. distribution center located in Byhalia, Mississippi is
located in a geographic area that is subject to greater risk of tornados. If operations at the Byhalia, Mississippi distribution
center are disrupted, it could result in a material loss of revenue and additional costs to bring the facility back to full operating
capacity.

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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 business, 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.

To the extent that we rely on newly acquired businesses or new product lines to expand our business, these acquisitions or
new product lines may not contribute positively to our earnings because anticipated sales volumes and synergies may not
materialize, cost savings may be less than expected or acquired businesses may carry unexpected liabilities.

We may acquire partial or full ownership in businesses or may acquire rights to market and distribute particular products or
lines of products. For example, in February 2024, our Hamilton Beach Health® business acquired HealthBeacon, a developer of
connected devices that enable patients to manage their injectable medication regimens at home. The acquisition of a business,
or of the rights to market specific products or use specific product names, may involve a financial commitment by us, either in
the form of cash or stock consideration. We may not be able to acquire businesses and develop products that will contribute
positively to our 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.

We depend 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.

We are 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 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 our revenue and
profitability. Our supply chain is subject to additional risks including, among others:

•

currency fluctuations;

labor unrest;

potential political, economic or social instability and government restrictions;

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 and ability to transport products;

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

unexpected changes in regulatory environments;

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

protection of intellectual property;

difficulty in complying with a variety of foreign laws;

difficulty in obtaining distribution and administrative support;

natural or human induced disasters such as earthquakes, tsunamis, floods, hurricanes, typhoons, fires, extreme weather
conditions, power or water shortages, telecommunications failures and medical epidemics or pandemics; 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 our expenses and decreases in our revenue and profitability.

Given that the majority of our suppliers are based in China, finding suppliers outside of China could result in additional risks,
including additional compliance requirements with foreign laws and taxes, obtaining distribution and administrative support
and training new personnel.

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Certain products rely upon a single third-party supplier.

In some cases, we use a single supplier to source a single product. An unforeseen disruption in the supplier’s operations could
impact our ability to deliver products to customers in a timely manner to meet demand. We may experience significant delays
while locating a new supplier, if able to at all, which could result in higher costs. Additionally, our reliance on a single supplier
with respect to certain products could limit our negotiating leverage with such supplier.

We are subject to changes in our customers’ inventory management strategies.

Retailers may adjust their purchasing patterns to reduce the amount of inventory they carry to more closely match consumers’
spending habits. If our larger customers tighten their inventory on hand and do not provide us with sufficient lead time to react,
we may be subject to excess or obsolete inventory, additional storage costs and/or missed sales. Without sufficient lead time,
we may not be able to meet retailers demands as we are dependent on third-party suppliers for the manufacturing and
distribution of our products and, therefore, must make purchases well in advance to deliver products to our customers.
Additionally, if we are unable to source inventory at the correct levels in time with our customers’ orders, we could lose sales
and experience a reduction in revenue.

We may not be able to attract, retain and develop key talent.

Employment and retention of qualified personnel is important to the successful conduct of our business. Therefore, our success
also depends upon our ability to recruit, hire, train and retain current and additional skilled and experienced management
personnel. Our inability to hire and retain personnel with the requisite skills could impair our ability to manage and operate our
consolidated business effectively and could significantly reduce our consolidated profitability.

Our business could suffer if information technology systems are disrupted, cease to operate effectively or become subject to
a cybersecurity breach.

We rely 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, maintain cost-efficient operations, and to comply with
regulatory, legal, and tax requirements. 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.

Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to
damage, interruption or shutdown due to any number of causes outside of our control such as catastrophic events, natural
disasters, fires, power outages, systems failures, telecommunications failures, employee error or malfeasance, security breaches,
computer viruses or other malicious codes, ransomware, unauthorized access attempts, denial of service attacks, phishing,
hacking and other cyberattacks. Additionally, the increase in hybrid working where employees, including third-party
employees, access technology infrastructure remotely may create additional information technology and data security risks.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.

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. Although we attempt to monitor and
mitigate against cyber risks, including through investing in new technologies and developing third-party cybersecurity risk
management capabilities, we may incur significant costs in protecting against or remediating cyberattacks or other cyber
incidents. While we maintain a cyber insurance policy that provides coverage for security incidents, we cannot be certain that
our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on financially
reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. If unauthorized access does occur,
we could also 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.

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There is no assurance that the measures we have taken to protect our information systems will prevent or limit the impact of a
future cyber incident. 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.

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 and the California Consumer Privacy Act, as well as industry self-
regulatory codes that create new compliance obligations. The administration, enforcement and regulation of Privacy Laws are
quickly evolving and subject to changes in interpretation. Future changes in Privacy Laws may require the Company to incur
additional and unexpected expenses and may subject the Company to additional compliance risk. Any failure to comply with
Privacy Laws could have a material adverse impact on our financial condition and results of operations.

Financial Risks

Our financing arrangements contain various restrictions that could limit operating flexibility.

Our credit facility contains covenants and other restrictions that, among other things, require us to satisfy certain financial tests,
maintain certain financial ratios and restrict our ability to incur additional indebtedness. The restrictions and covenants in our
credit facility, and other future financing arrangements may limit our 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
we 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.

We are subject to foreign currency exchange risk.

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

Regulatory Risks

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

Because we have employees, property and business operations outside of the U.S., we are subject to the laws and the court
systems of many jurisdictions. We may become subject to claims outside the U.S. for violations or alleged violations of laws
with respect to our current or future foreign operations. 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 our profitability and our ability to operate our businesses effectively.

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Our obligations relating to environmental matters may exceed our expectations.

We are subject to laws and regulations relating to the protection of the environment, including those governing the management
and disposal of hazardous substances. We are investigating or remediating historical contamination at some current and former
sites related to our prior manufacturing operations or the operations of businesses that we have 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 our financial conditions and results of operations.
Future changes to environmental laws could require us to incur significant additional expense.

We 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 we have acquired. In certain circumstances, our financial
liability for cleanup costs takes into account agreements with an unrelated third party. Our 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 we have sold real estate, we have retained responsibility for certain contingent environmental
liabilities arising from pre-closing operations. These liabilities may not arise, if at all, until years after we sold these operations
and could require us to incur significant additional expenses, which could materially adversely affect our 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.

Our business subjects us to product liability claims, which could affect our reputation, revenue and profitability.

We face 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 maintain product liability insurance for claims above
this self-insured level. If a product liability claim is brought against us, 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, we may not be able to maintain product liability insurance on terms acceptable to us in the future. If the number of
product liability claims we experience exceeds historical amounts, if we are unable to maintain product liability insurance or if
our product liability claims exceed the amount of our insurance coverage, our results of operations and financial condition
could be affected adversely.

Our business involves the potential for product recalls, which could affect our revenue and profitability.

The products that we sell are subject to various mandatory and voluntary standards. As a marketer and distributor of consumer
products, we are 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. In addition, the FDA and
other governmental authorities regulate the development, manufacture, sale and distribution of certain of our products. Under
certain circumstances, the CPSC, the FDA or other government agencies could require us to repair, replace or refund the
purchase price of one or more of our products, or we may voluntarily do so. Any repurchases or recalls of our products could be
costly to us and could damage our reputation or the value of our brands. If we are required to remove, or we voluntarily remove
our products from the market, our reputation or brands could be tarnished, and we might have large quantities of finished
products that could not be sold. Furthermore, failure to timely notify the CPSC, the FDA or other applicable government
agencies of a potential safety hazard can result in fines being assessed against us.

Additionally, laws regulating certain of our products exist in some states, as well as in other countries in which we sell our
products, and more restrictive laws and regulations may be adopted in the future. Our 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.

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Failure to comply with public health, consumer protection and other regulations could affect our reputation, revenue and
profitability.

Some jurisdictions require that products be listed by UL, a not-for-profit organization that sets safety standards for products, or
other similar recognized laboratories. We endeavor to design our products to meet the certification requirements of, and to be
certified in, each of the jurisdictions in which they are sold. Failure to comply with such certification requirements could result
in additional re-design expenses, fines, or product liability claims.

The Company’s good reputation is critical to the success of our business.

The Company has a strong reputation within our portfolio of trusted and well-known brands. Our customers’ and consumers’
perceptions of the Company and our brands as safe, reliable and of high quality are key to our continued success. Additionally,
we have strategic alliances and licensing agreements with third-party brands, and our success also relies upon the reputation of
these third-party brands. Failure to maintain our reputation and brand image could have a material adverse effect on our
business, financial condition, results of operations and cash flows.

Compliance with multiple, and potentially conflicting, international laws and regulations, including anti-corruption laws,
may be difficult, burdensome or expensive.

We are subject to many statutes, ordinances, rules and regulations in the U.S. and elsewhere that, if violated by us or our
affiliates, partners or vendors, could have a material adverse effect on our business. For example, we are 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 we do business which prohibit the Company 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 we do not
properly implement and maintain practices and controls with respect to compliance with applicable anti-corruption, anti-bribery
and anti-kickback laws, or if we fail to enforce those practices and controls properly, we 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 our business and capital raising activities, any of
which could materially and adversely affect our business, results of operations and financial condition.

Government regulations could impose costly requirements on our business.

The FDA and other governmental authorities regulate the development, manufacture, sale and distribution of certain of our
products, and failure to comply with all applicable rules and regulations may adversely impact us. For certain products in our
Hamilton Beach Health® business, government regulations may require detailed inspection of, and controls over, research and
development, clinical investigations, product approvals and manufacturing, marketing and promotion, sampling, distribution,
record-keeping, storage and disposal practices. Failure to comply with any applicable laws or regulations could result in fines or
revocation of our operating permits and licenses or, in rare circumstances, market withdrawal of the product.

We may also be dependent on receiving FDA and other governmental or third-party approvals prior to manufacturing,
marketing and shipping certain new products in the future, which may be costly and time-consuming. We cannot be certain that
any such products will receive FDA or other necessary approvals. Also, receipt of approval in one country does not guarantee
approval by the FDA or any other foreign regulatory agency.

U.S. government trade actions could have a material adverse effect on our 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 our total purchases on an annualized basis. 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

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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.

Risks Related to Our Common Stock

The amount and frequency of dividend payments made on the Company’s common stock could change.

The Company’s Board of Directors (“Board”) has the authority 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,
future expense requirements, financial conditions, contractual limitations, credit instruments and other factors our Board may
consider. In addition, as a holding company, substantially all of our assets are held by our consolidated subsidiaries, and we
primarily rely on dividends and other payments or distributions from our consolidated subsidiaries to meet our debt service and
other obligations and to enable us to pay dividends. The ability of our subsidiaries to pay dividends or make other payments or
distributions to us will depend on their respective operating results and may be restricted by, among other things, the laws of
their jurisdiction of organization, which may limit our ability to pay dividends or make other payments. 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: Company Class A common stock (“Class A Common”) and Class
B common stock (“Class B Common”). Holders of Class A Common are entitled to cast one vote per share and, as of
December 31, 2023, accounted for approximately 22.14% of the voting power of the Company. Holders of Class B Common
are entitled to cast ten votes per share and, as of December 31, 2023, accounted for the remaining voting power of the
Company. As of December 31, 2023, certain members of the Company’s extended founding family held approximately 32.34%
of Class A Common and 92.99% of Class B Common. On the basis of this common stock ownership, certain members of the
Company’s extended founding family could exercise 79.56% 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.

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Item 1C. CYBERSECURITY

Risk Management and Strategy

The Company is subject to various cybersecurity risks that could impact our systems and our ability to operate. We have
developed processes to assess, identify and manage our risks related to cybersecurity threats which are incorporated into the
Company’s overall risk management process. On an ongoing basis we utilize threat prevention systems to monitor, block and
protect our information technology systems which are monitored continuously by trained security personnel. Our process to
prevent cybersecurity incidents involves layered security architecture to protect our networks, end-user devices, servers, and
cloud solutions. On a regular basis, we conduct phishing email simulations and provide training resources to our employees.
We have an Incident Response Plan to outline our process to manage cybersecurity threats and incidents. We utilize industry
recognized security and compliance experts for regular security assessments. In order to oversee and identify risks from
cybersecurity threats associated with our use of third-party service providers, we review their compliance against internationally
recognized standards.

As of the filing of this Form 10-K, we are not aware of any cyber attacks that have occurred since the beginning of 2023 that
have materially affected, or are reasonably likely to materially affect us, including our business strategy, results of operations or
financial condition. We describe whether any risks from cybersecurity threats, have materially affected or are reasonably likely
to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “The
Company’s business could suffer if information technology systems are disrupted, cease to operate effectively or become
subject to a cybersecurity breach” included within our risk factor disclosures in Item 1A. Risk Factors of this Annual Report on
Form 10-K, which information is incorporated herein by reference.

Governance

Cybersecurity is among our Board’s oversight priorities. Through their oversight role, the Board has allocated oversight of
cybersecurity risk to our Audit Review Committee of the Board. Our Audit Review Committee plays a vital role in our
cybersecurity risk management process and regularly reviews the Company’s cybersecurity and other information technology
risks, controls and procedures. At multiple points throughout the year, management provides the Audit Review Committee with
updates to our cybersecurity risk management process and our security monitoring and protection systems. The Audit Review
Committee is kept informed of new security solutions planned for deployment. As part of their regular review of reports from
management, the Audit Review Committee regularly reports cybersecurity risk updates to the Board, which enables the Board
to incorporate the insights of such reports into its overall risk oversight analysis.

Our cybersecurity risk management processes are led by our VP, IT Business Solutions who has over 22 years of experience in
various roles involving managing information systems and cybersecurity functions and developing cybersecurity strategies.
Through these roles the VP, IT Business Solutions has implemented information technology security and privacy policies
across multiple infrastructure and application platforms and led identity and access management. In order to enable the
Company to prevent, detect, mitigate and remediate cybersecurity incidents, our security monitoring and protection systems are
continuously monitored. The VP, IT Business Solutions is kept informed in accordance with our Incident Response Plan and
reports matters to the Audit Review Committee as necessary. Additionally, we have a Cyber Security Task Force in place that is
comprised of individuals across our various departments within our organization including information systems, legal, finance,
internal audit, sales and marketing, engineering and supply chain teams which meets regularly to further advance our
cybersecurity strategy.

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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

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 and Mexico.

Item 3. LEGAL PROCEEDINGS

The information required by this Item 3 is set forth in Note 10 “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

Our 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 our 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.

As of March 1, 2024, there were 773 Class A Common stockholders of record and 746 Class B Common stockholders of
record.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In November 2023, our Board approved a stock repurchase program for the purchase of up to $25 million of our Class A
Common outstanding starting January 1, 2024 and ending December 31, 2025. Our previously authorized share buyback
program was approved by our Board in February 2022 for the purchase of up to $25 million of our Class A Common
outstanding starting February 22, 2022 and ending December 31, 2023.

During the years ended December 31, 2023 and 2022, we repurchased 250,772 and 261,049 shares for an aggregate purchase
price of $3.1 million and $3.0 million, respectively. There were no share repurchases during the year ended December 31, 2021.
During the fourth quarter of 2023, we repurchased 111,123 shares for an aggregate purchase price of $1.6 million.

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Issuer Purchases of Equity Securities

(a)

(b)

Period

Total Number of
Shares Purchased

Average Price
Paid per Share

(d)

Maximum Dollar Value of
Shares that May Yet Be
Purchased Under the Program

Month #1
October 1 to 31, 2023

Month #2
November 1 to 30, 2023

Month #3
December 1 to 31, 2023

Item 6. RESERVED

19,769 $

12.14

44,800 $

13.99

46,554 $

111,123 $

15.83

14.43

19,769 $

44,800 $

46,554 $

111,123 $

20,310,913

19,684,324

18,947,187

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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, 2023 and
2022 and year-to-year comparisons between these years. A discussion of our results of operations for the year ended
December 31, 2022 compared to the year ended December 31, 2021 is included in Part II, Item 7 “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended
December 31, 2022.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our 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.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the
preparation of our consolidated financial statements.

Revenue Recognition: Revenue is recognized when control of the promised goods or services is transferred to our customers,
in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Sales taxes are
excluded from revenue. At contract inception, we assess the goods and services promised in our contracts with customers and
identify a performance obligation for each promised good or service that is distinct. We have 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. We offer 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, we apply 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.

We monitor our estimates of variable consideration, which includes returns and price concessions, and periodically make
adjustments to the carrying amounts as appropriate. During 2023, there were no material adjustments to the aforesaid estimates
and our past results of operations have not been materially affected by a change in these estimates. Although there can be no
assurances, we are not aware of any circumstances that would be reasonably likely to materially change these estimates in the
future.

Retirement Benefit Plans: We maintain two defined benefit pension plans that provide benefits based on years of service and
average compensation during certain periods. Our 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, we 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 2022, our Board approved the
termination of our U.S. defined benefit pension plan (the “Plan”) with an effective date of September 30, 2022. The
termination process is still ongoing and is expected to be completed in 2024. 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 our pension liability.

For the Non-U.S. Plan, the expected long-term rate of return on defined benefit plan assets reflects our 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, we consider 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 our 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 our 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 change to our pension obligation causing a related increase or
decrease in reported net operating results in the period of change in the estimate. Because the 2023 assumptions are used to
calculate 2024 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 2024 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 2024 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 2023 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 2023 by approximately $1.1 million.

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RESULTS OF OPERATIONS

Our results of operations were as follows for the years ended December 31:

2023 Compared with 2022

Year Ended December 31

2023

% of
Revenue

2022

% of
Revenue

$ Change % Change

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) before income taxes

Income tax expense

Net income (loss)

$ 625,625

100.0 % $ 640,949

100.0 % $ (15,324)

481,949

143,676

108,395

200

35,081

3,000

385
31,696

6,454

25,242

77.0 %

511,835

79.9 %

(29,886)

23.0 %

129,114

20.1 %

14,562

17.3 %

90,120

14.1 %

18,275

— %

200

— %

—

(2.4) %

(5.8) %

11.3 %

20.3 %

— %

5.6 %

38,794

6.1 %

(3,713)

(9.6) %

0.5 %

0.1 %
5.1 %

1.0 %

4,589

1,776
32,429

7,162

4.0 %

25,267

0.7 %

(1,589)

(34.6) %

0.3 %
5.1 %

1.1 %

3.9 %

(1,391)
(733)

(708)

(25)

(78.3) %
(2.3) %

(9.9) %

(0.1) %

Effective income tax rate

20.4 %

22.1 %

The following table identifies the components of the change in revenue for 2023 compared with 2022:

2022

(Decrease) increase from:

Unit volume and product mix

Foreign currency

Average sales price

2023

Revenue

640,949

9,527

3,254

(28,105)

625,625

Revenue - Revenue decreased $15.3 million, or 2.4% over the prior year due primarily to lower average selling price.
Revenue decreased in the U.S., Canadian, and Latin American Consumer markets. Partially offsetting these revenue decreases
was an increase in the Mexican Consumer market. The Global Commercial market had decreased revenue compared to 2022,
when revenue grew 50% due to a continued strong rebound in the food service and hospitality industries from pandemic-
driven demand softness, as well as the Company's new products, line extensions and sales initiatives.

Gross profit - Gross profit margin increased to 23.0% in the current year compared to 20.1% in the prior year due to

lower product costs and favorable product mix.

Selling, general and administrative expenses - Selling, general and administrative expenses increased $18.3 million

due primarily to the $10.0 million insurance recovery recognized during the first quarter of 2022 which did not recur.
Additionally, there was an increase in employee-related costs in the current year that was partially offset by a decrease in
outside services.

Interest expense - Interest expense, net decreased $1.6 million due to decreased average borrowings outstanding

under the HBB Facility, partially offset by higher interest rates.

Table of Contents

Other expense (income), net - Other expense (income), net decreased $1.4 million. In 2023, other expense (income),

net includes currency gains of $0.3 million in the current year compared to currency losses of $1.9 million in 2022. This
decrease 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, we recorded a $0.3 million pension settlement charge which did not recur.

Income tax expense - The effective tax rate on income was 20.4% and 22.1% for the twelve months ended December
31, 2023 and 2022, respectively. The effective tax rate was lower for the twelve months ended December 31, 2023 due to the
favorable impact of foreign operations in the current year.

LIQUIDITY AND CAPITAL RESOURCES

Our cash flows are provided by dividends paid or distributions made by HBB. The only material assets held by us are the
investment in our 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. We have not guaranteed any of the obligations of HBB.

Our principal sources of cash to fund liquidity needs are: (1) cash generated from operations and (2) borrowings available
under the HBB Facility. Our primary use of funds consists of working capital requirements, operating expenses, payment of
dividends, repurchase of shares, capital expenditures and payments of principal and interest on debt. As of December 31,
2023, we had cash and cash equivalents of $15.4 million, compared to $0.9 million as of December 31, 2022. We believe our
liquidity and access to capital markets will be adequate to fund our cash requirements for the next 12 months and for the
foreseeable future.

The Company has an agreement with a third-party administrator to provide an accounts payable tracking system which
facilitates a participating supplier’s ability to monitor and voluntarily elect to sell payment obligations owed by the Company
to the designated third-party financial institution. Participating suppliers can sell one or more of the Company’s payment
obligations at their sole discretion. The Company has no economic interest in a supplier’s decision to sell one or more of its
payment obligations. The Company’s rights and obligations with respect to such payment obligations, including amounts due
and scheduled payment terms, are not impacted by suppliers’ decisions to sell amounts under these arrangements. The
agreement has a limit of $60.0 million in payment obligations ($85.0 million during peak season from August to January).
There is no requirement to provide assets pledged as security or other forms of guarantees under the agreement. The Company
pays the third-party administrator based upon the original payment terms negotiated with participating suppliers. The payment
of these obligations by the Company is included in cash used in operating activities in the Consolidated Statement of Cash
Flows. As of December 31, 2023 and 2022, the Company has $55.0 million and $23.3 million, respectively, in outstanding
payment obligations that are presented in Accounts payable on the Consolidated Balance Sheets. Of these totals, the third-
party financial institution has made payments to participating suppliers to settle $48.9 million and $23.3 million, respectively,
of our outstanding payment obligations.

We do not rely on the supplier finance program as a means to manage our cash flow, as our payment terms to the third-party
financial institution are the same as our terms to our participating suppliers. Therefore, we do not face a material risk if any
party terminates the agreement. Our participation has not had a material impact on our Consolidated Balance Sheets, Statement
of Cash Flows or liquidity.

The following table presents selected cash flow information:

Net cash provided by (used for) operating activities

Net cash provided by (used for) investing activities

Net cash provided by (used for) financing activities

Year Ended December
31

(In thousands)

2023

2022

$ 88,636 $

(3,418)

(5,174) $

(2,279)

$ (70,072) $

5,575

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December 31, 2023 Compared with December 31, 2022

Operating activities - Net cash provided by operating activities was $88.6 million compared to cash used for

operating activities of $3.4 million in 2022 primarily due to our focus on net working capital improvement. Net working
capital provided cash of $49.5 million in 2023 compared to a use of cash of $39.0 million in 2022. Net cash provided by
accounts payable was $37.5 million in 2023 compared to $69.9 million used in 2022. Net cash provided by inventory was
$30.8 million in 2023 compared to $26.4 million provided in 2022. Trade receivables used net cash of $18.8 million during
2023 compared to $4.5 million provided in the prior year due to timing of collections.

Investing activities - Net cash used for investing activities increased in 2023 compared to 2022 related to $1.6 million

in secure loan payments made to HealthBeacon and internal-use software development costs.

Financing activities - Net cash used for financing activities was $70.1 million in 2023 compared to cash provided by

financing activities of $5.6 million in 2022. The change is due to our focus on net working capital improvement and a
significant reduction in borrowings outstanding on the HBB Facility.

Capital Resources

The HBB Facility expires in June 2025. We expect to continue to borrow against the facility and make voluntary repayments
within the next twelve months. Repayment of the HBB Facility is due on June 30, 2025, therefore all borrowings are classified
as long term debt as of December 31, 2023. The obligations under the HBB Facility are secured by substantially all of HBB’s
assets.

As of December 31, 2023, the borrowing base under the HBB Facility was $148.1 million and borrowings outstanding
were $50.0 million. As of December 31, 2023, the excess availability under the HBB Facility was $98.1 million.

The maximum availability under the HBB Facility is governed by a borrowing base derived from advance rates against
eligible trade receivables, inventory and trademarks of the borrowers, as defined in the HBB Facility. Borrowings bear interest
at a floating rate, which can be a base rate, 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, 2023, for base rate loans and
SOFR loans denominated in U.S. dollars were 0.00% and 1.55%, respectively. The applicable margins,
effective December 31, 2023, for base rate loans and bankers’ acceptance loans denominated in Canadian dollars were 0.00%
and 1.55%, 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, 2023 was 4.25%, 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, we have entered into interest rate swap agreements for a
portion of the HBB Facility. Terms of the interest rate swap agreements require us to receive a variable interest rate and pay a
fixed interest rate.

The HBB Facility includes restrictive covenants, which, among other things, limit the payment of dividends, subject to
achieving availability thresholds. Dividends 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 at least $18.0 million. Dividend amounts 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 at least
$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, 2023, we were in compliance with all financial covenants
in the HBB Facility.

We maintain an arrangement with a financial institution to sell certain U.S. trade receivables on a non-recourse basis.

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Contractual Obligations, Contingent Liabilities and Commitments

Following is a table which summarizes the contractual obligations of Hamilton Beach Holding as of December 31, 2023:

Payments Due by Period

Contractual Obligations

Total

2024

2025

2026

2027

2028

Thereafter

Revolving credit agreements

$ 50,000 $

— $ 50,000 $

— $

Variable interest payments on HBB
Facility

3,537

2,474

Purchase and other obligations

214,549

214,364

Operating lease obligations

Finance lease obligations

59,769

414

8,306

1,063

6,517

—

5,970

—

5,677

—

5,519

27,780

—

Total contractual cash obligations

$ 328,269 $ 225,236 $ 57,734 $

6,116 $

5,837 $

5,566 $

27,780

Our variable interest payments are calculated based upon our anticipated payment schedule and the December 31, 2023 base
rate and applicable margins, as defined in the HBB Facility. A 0.25% increase in the base rate would increase our estimated
total annual interest payments on the HBB Facility by approximately $0.3 million.

Our 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 our operating and finance lease agreements, could cause an
acceleration of the payment schedule. No such event of default for us has occurred or is anticipated to occur.

Given the funded status of the two defined benefit pension plans, we do not expect to contribute to the pension plans in 2024.
Pension benefit payments are made from assets of the pension plans.

Off Balance Sheet Arrangements

We have 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 Exchange Act. 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) uncertain or
unfavorable global economic conditions and impacts from global military conflicts; (2) the Company’s ability to source and
ship products to meet anticipated demand; (3) the Company’s ability to successfully manage constraints throughout the global
transportation supply chain; (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) changes in
customers’ inventory management strategies; (16) 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 the Company’s products; (17) changes
mandated by federal, state and other regulation, including tax, health, safety or environmental legislation; (18) the Company’s
ability to identify, acquire or develop, and successfully integrate, new businesses or new product lines; and (19) other risk
factors, including those described in the Company’s filings with the Securities and Exchange Commission, including, but not
limited to, this Annual Report on Form 10-K. Furthermore, the future impact of unfavorable economic conditions, including
inflation, changing interest rates, availability of capital markets and consumer spending rates remains uncertain. In uncertain
economic environments, we cannot predict whether or when such circumstances may improve or worsen, or what impact, if
any, such circumstances could have on our 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

We enter into certain financing arrangements that require interest payments based on floating interest rates. As such, our
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, we have entered into interest rate swap agreements for a portion of its floating rate financing arrangements. We do not
enter into interest rate swap agreements for trading purposes. Terms of the interest rate swap agreements require us to receive a
variable interest rate and pay a fixed interest rate.

For the purpose of risk analysis, we use sensitivity analysis to measure the potential loss in fair value of financial instruments
sensitive to changes in interest rates. We assume that a loss in fair value is an increase to its liabilities. The fair value of our
interest rate swap agreements was a receivable of $4.0 million as of December 31, 2023. A hypothetical 10% relative decrease
in interest rates would cause a decrease of $0.2 million in the fair value of interest rate swap agreements and the resulting fair
value would be a receivable of $3.8 million. Additionally, a hypothetical 10% relative increase in interest rates would cause an
increase of $0.2 million in the fair value of interest rate swap agreements and the resulting fair value would be a receivable of
$4.2 million. Neither would have a material impact to our interest expense, net of $3.0 million as of December 31, 2023.

FOREIGN CURRENCY EXCHANGE RATE RISK

We operate internationally through our foreign operating subsidiaries and enter 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, our 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.

We use 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 us 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 the purpose of risk analysis, we use sensitivity analysis to measure the potential loss in fair value of financial instruments
sensitive to changes in foreign currency exchange rates. We assume that a loss in fair value is either a decrease to its assets or
an increase to its liabilities. The fair value of our foreign currency exchange contracts was a net payable of $0.5 million as of
December 31, 2023. Assuming a hypothetical 10% weakening of the U.S. dollar as of December 31, 2023, the fair value of
foreign currency-sensitive financial instruments, which represents forward foreign currency exchange contracts, would be
decreased by $2.5 million compared with its fair value as of December 31, 2023.

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, 2023 that would require disclosure pursuant to this Item 9.

Table of Contents

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: As required by Exchange Act Rule 13a-15(b), Company management,
including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the
Company’s 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, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s
disclosure controls and procedures were effective as of December 31, 2023.

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 the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of
internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this evaluation,
management concluded that it maintained effective internal control over financial reporting as of December 31, 2023. The
Company’s effectiveness of internal control over financial reporting as of December 31, 2023 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 2023, 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 of the Company's directors or "officers" (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted,
modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is
defined in Item 408 of Regulation S-K, during the Company's fiscal quarter ended December 31, 2023.

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 our Directors will be set forth in the 2024 Proxy Statement under the subheadings “Part II —
Proposals To Be Voted On At The 2024 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
2024 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 our Directors, executive
officers and holders of more than ten percent of the Company’s equity securities will be set forth in the 2024 Proxy Statement
under the subheading “Part IV — Other Important Information — Delinquent Section 16(a) Reports,” which information is
incorporated herein by reference.

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

We have 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 our 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.

Table of Contents

Item 11. EXECUTIVE COMPENSATION

Information with respect to executive compensation will be set forth in the 2024 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 2024 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 2024 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 2024 Proxy Statement under the
heading “Part II — Proposals To Be Voted On At The 2024 Annual Meeting — Proposal 4 — Ratification of the Appointment
of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for 2024,” 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-35 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.

Amended and Restated Certificate of Incorporation of Hamilton Beach Brands Holding Company is incorporated by reference
to Exhibit 3.1 to Hamilton Beach Brands Holding Company’s Registration Statement on Form 8-A, filed by the Company on
September 22, 2017, Commission File Number 000-55845.

Amended and Restated Bylaws of Hamilton Beach Brands Holding Company are incorporated by reference to Exhibit 3.2 to
Hamilton Beach Brands Holding Company’s Registration Statement on Form 8-A, filed by the 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 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the Registration Statement on Form S-1, filed
by the Company on September 18, 2017, Commission File Number 333-220066.

Specimen of Hamilton Beach Brands Holding Company Class B Common Stock certificate is incorporated by reference to
Exhibit 4.2 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the Registration Statement on Form S-1, filed
by the Company on September 18, 2017, Commission File Number 333-220066.
Description of the Company's Securities is attached hereto as Exhibit 4.3.

3.1

3.2

4.1

4.2

4.3

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(10) Material Contracts.

10.1

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

Stockholders’ Agreement, dated as of September 29, 2017, by and among the Participating Stockholders’ (as defined therein),
Hamilton Beach Brands Holding Company, and the Depository (as defined therein) is incorporated by reference to Exhibit 10.4
to Hamilton Beach Brands Holding Company’s Current Report on Form 8-K, filed by the Company on October 4, 2017,
Commission File Number 001-38214.
Amendment to Stockholders’ Agreement, dated as of February 24, 2020, by and among the Depository, Hamilton Beach Brands
Holding Company, the new Participating Stockholders identified on the signature pages thereto and the Participating
Stockholders under the Stockholders’ Agreement, dated as of September 29, 2017, as amended, by and among the Participating
Stockholders, Hamilton Beach Brands Holding Company and the Depository is incorporated by reference to Exhibit 10.38 to
Hamilton Beach Brands Holding Company’s Annual Report on Form 10-K/A, filed by the Company on July 24, 2020,
Commission File Number 001-38214.
Amendment to Stockholders’ Agreement, dated as of December 21, 2020, by and among the Depository, Hamilton Beach
Brands Holding Company, the new Participating Stockholders identified on the signature pages thereto and the Participating
Stockholders under the Stockholders’ Agreement, dated as of September 29, 2017, as amended, by and among the Participating
Stockholders, Hamilton Beach Brands Holding Company and the Depository is incorporated by reference to Exhibit 19 filed
with Amendment No. 4 to the Statement on Schedule 13D, filed by the reporting persons named therein 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 Stockholders identified on the signature pages thereto and the Participating
Stockholders under the Stockholders’ Agreement, dated as of September 29, 2017, as amended, by and among the Participating
Stockholders, Hamilton Beach Brands Holding Company and the Depository is incorporated by reference to Exhibit 18 filed
with Amendment No. 2 to the Statement on Schedule 13D, filed by the reporting persons named therein 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 by reference to Exhibit 10.1 to NACCO Industries, Inc.’s Current
Report on Form 8-K, filed by NACCO Industries, Inc. on June 6, 2012, Commission File Number 001-09172.
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 by
reference to Exhibit 10.2 to NACCO Industries, Inc.’s Current Report on Form 8-K, filed by NACCO Industries, Inc. on June 6,
2012, Commission File Number 001-09172.
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 by
reference to Exhibit 10.3 to the NACCO Industries, Inc.’s Current Report on Form 8-K, filed by NACCO Industries, Inc. on
June 6, 2012, Commission File Number 001-09172.
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 by
reference to Exhibit 10.1 to NACCO Industries, Inc.’s Quarterly Report on Form 10-Q, filed by NACCO Industries, Inc. on
July 30, 2014, Commission File Number 001-09172.
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 by
reference to Exhibit 10.66 to NACCO Industries, Inc.’s Annual Report on Form 10-K, filed by NACCO Industries, Inc. on
March 9, 2015, Commission File Number 001-09172.
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 by reference to Exhibit 10.72 to NACCO Industries, Inc.’s Annual Report
on Form 10-K, filed by NACCO Industries, Inc. on March 2, 2016, Commission File Number 001-09172.
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 by reference to Exhibit 10.1 to NACCO Industries, Inc.’s Quarterly Report on
Form 10-Q, filed by NACCO Industries, Inc. on August 2, 2016, Commission File Number 001-09172.
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 to Hamilton Beach Brands Holding
Company’s Amendment No. 2 to the Registration Statement on Form S-1, filed by the Company on September 18, 2017,
Commission File Number 333-220066.
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 to Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed
by the Company on August 1, 2018, Commission File Number 001-38214.
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 to Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed by the Company
on July 24, 2020, Commission File Number 001-38214.

Table of Contents

10.15

10.16

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*

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 is incorporated by
reference to Exhibit 10.39 to Hamilton Beach Brands Holding Company’s Current Report on Form 8-K, filed by the Company
on November 23, 2020, Commission File Number 001-38214.
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 is incorporated by reference to
Exhibit 10.1 to Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed by the Company on May 5,
2021, Commission File Number 001-38214.
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 to Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed by the Company on November 3,
2021, Commission File Number 001-38214.
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 to
Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed by the Company on August 3, 2022,
Commission File No. 001-38214.
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 to Hamilton Beach Brands Holding Company’s Current Report on Form 8-K, filed by the Company on August 18, 2022,
Commission File No. 001-38214.
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 to Hamilton Beach Brands Holding Company’s Current Report on Form 8-K, filed by the Company on November 15,
2022, Commission File Number 001-38214.
The Hamilton Beach Brands, Inc. Annual Incentive Compensation Plan (Effective January 1, 2014) is incorporated by
reference to Exhibit 10.1 to NACCO Industries, Inc.’s Current Report on Form 8-K, filed by NACCO Industries, Inc. on May 9,
2014, Commission File Number 001-09172.
Amendment No. 1 The Hamilton Beach Brands, Inc. Annual Incentive Compensation Plan (Effective January 1, 2014) is
incorporated by reference to Exhibit 10.32 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the
Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number 333-220066.
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 to Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed
by the Company on October 30, 2018, Commission File Number 001-38214.
Hamilton Beach Brands, Inc. Long-Term Incentive Compensation Plan (Amended and Restated Effective March 1, 2015) is
incorporated by reference to Exhibit 10.2 to NACCO Industries, Inc.’s Current Report on Form 8-K, filed by NACCO
Industries, Inc. on May 18, 2015, Commission File Number 001-09172.
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 to Hamilton Beach Brands Holding Company’s Amendment No. 2
to the Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number
333-220066.
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 to Hamilton Beach Brands Holding Company’s Quarterly Report on Form 10-Q, filed
by the Company on October 30, 2018, Commission File Number 001-38214.
Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan (Effective September 29, 2017) is
incorporated by reference to Exhibit 10.34 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the
Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number 333-220066.
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 to Hamilton Beach Brands Holding Company’s Amendment No. 2
to the Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number
333-220066.
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 to Hamilton Beach Brands Holding Company’s Amendment
No. 2 to the Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number
333-220066.
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 to Hamilton Beach Brands Holding Company’s Quarterly
Report on Form 10-Q, filed by the Company on October 30, 2018, Commission File Number 001-38214.
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 Definitive Proxy
Statement on Form DEF 14A, filed by the Company on March 26, 2020, Commission File Number 001-38214.
Hamilton Beach Brands Holding Company Executive Long-Term Equity Incentive Plan, amended and restated effective March
1, 2022 is incorporated by reference to Exhibit 4.4 to the Hamilton Beach Brands Holding Company’s Registration Statement
on Form S-8, filed by the Company on May 18, 2022, Commission File Number 333-265031.

Table of Contents

10.33*

10.34*

10.35*

10.36*

10.37*

10.38*

10.39*

10.40*

10.41*

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 10.2 to Hamilton Beach Brands Holding Company’s Quarterly Report on
Form 10-Q, filed by the Company on May 5, 2021, Commission File Number 001-38214.
Hamilton Beach Brands Holding Company Supplemental Executive Long-Term Incentive Bonus Plan (Effective September 29,
2017) is incorporated by reference to Exhibit 10.38 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the
Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number 333-220066.
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 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to
the Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number 333-220066.
Hamilton Beach Brands Holding Company Non-Employee Director’s Equity Compensation Plan (Effective September 29,
2017) is incorporated by reference to Exhibit 10.35 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the
Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number 333-220066.

Hamilton Beach Brands Holding Company Non-Employee Directors’ Equity Compensation Plan (Amended and Restated
Effective May 18, 2021) is incorporated by reference to Exhibit 10.1 to Hamilton Beach Brands Holding Company’s Quarterly
Report on Form 10-Q, filed by the Company on August 4, 2021, Commission File Number 001-38214 .

The Hamilton Beach Brands, Inc. Excess Retirement Plan (As Amended and Restated Effective January 1, 2015) is
incorporated by reference to Exhibit 10.71 to NACCO Industries, Inc.’s Annual Report on Form 10-K, filed by NACCO
Industries, Inc. on March 9, 2015, Commission File Number 001-09172.
Amendment No. 1 to The Hamilton Beach Brands, Inc. Excess Retirement Plan (As Amended and Restated Effective January
1, 2015) is incorporated by reference to Exhibit 10.77 to NACCO Industries, Inc.’s Annual Report on Form 10-K, filed by
NACCO Industries, Inc. on March 2, 2016, Commission File Number 001-09172.
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 to Hamilton Beach Brands Holding Company’s Amendment No. 2 to the
Registration Statement on Form S-1, filed by the Company on September 18, 2017, Commission File Number 333-220066.
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 99 of Hamilton Beach Brands Holding Company’s
Current Report on Form 8-K, filed by the Company on December 28, 2018, Commission File Number 001-38214.

(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

Consent of Ernst & Young LLP.

(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 Sally M. Cunningham 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 Sally M. Cunningham

(97) Policy relating to recovery of erroneously awarded compensation

97.1

Policy relating to recovery of erroneously awarded compensation

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline 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

Item 16. Form 10-K Summary

None.

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/ Sally M. Cunningham

Sally M. Cunningham

Title

Date

Senior Vice President, Chief Financial Officer
and Treasurer (Principal Financial Officer)/
(Principal Accounting Officer)

March 6, 2024

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/ Sally M. Cunningham

Sally M. Cunningham

/s/ Mark R. Belgya

Mark R. Belgya

/s/ J.C. Butler, Jr.

J.C. Butler, Jr.

/s/ Paul D. Furlow

Paul D. Furlow

/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.

Chief Executive Officer (Principal Executive
Officer), Director

March 6, 2024

Senior Vice President, Chief Financial Officer
and Treasurer (Principal Financial Officer)/
(Principal Accounting Officer)

March 6, 2024

Director

Table of Contents

/s/ Thomas T. Rankin

Thomas T. Rankin

/s/ James A. Ratner

James A. Ratner

/s/ Clara R. Williams

Clara R. Williams

Signature

Title

Date

Director

March 6, 2024

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, 2023

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 Stockholders and the Board of Directors 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, 2023 and 2022, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended
December 31, 2023, 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, 2023, 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 6, 2024 expressed an unqualified opinion thereon.

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

Description of
the Matter

Valuation of customer price concession accrual
As described in Notes 1 and 9 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 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 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 6, 2024

F-4

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors 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,
2023, 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, 2023, 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 2023 consolidated financial statements of the Company and our report dated March 6, 2024 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 6, 2024

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) before income taxes

Income tax expense (benefit)

Net income (loss)

Basic earnings (loss) per share

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

2023

2022

2021

(In thousands, except per share data)

625,625 $

640,949 $

658,394

481,949

143,676

108,395

200

35,081

3,000

385

31,696

6,454

511,835

129,114

90,120

200

38,794

4,589

1,776

32,429

7,162

521,892

136,502

104,763

200

31,539

2,854

(272)

28,957

7,651

25,242 $

25,267 $

21,306

1.80 $

1.81 $

1.54

1.53

14,036

14,060

13,970

13,996

13,880

13,930

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.

2023

Year Ended December 31
2022
(In thousands)

2021

25,242 $

25,267 $

21,306

1,859

653

(3,365)

—

1,631

103

370

(2,997)

1,865

4,450

2,085

346

(4,053)

629

1,251 $

2,325 $

726

(828)

320

—

386

2,210

419

3,233

26,493 $

27,592 $

24,539

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; 11,161 and 10,663 shares issued as of December 31,
2023 and 2022, respectively
Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 3,616
and 3,844 shares issued as of December 31, 2023 and 2022, 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

2023

2022

(In thousands)

15,370

928

135,434

126,554

9,457

286,815

27,401

39,423

6,253

1,292

2,581

14,613

6,324

115,135

156,038

12,643

284,744

27,830

44,000

6,253

1,492

3,117

14,348

7,166

384,702

388,950

99,704

14,948

6,232

6,155

12,549

139,588

50,000

41,937

5,910

237,435

—

112

70,401

(12,013)

99,398

(10,667)

147,267

61,759

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

384,702

388,950

Table of Contents

Operating activities
Net income (loss)

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS

Adjustments to reconcile net income (loss) 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 by (used for) operating activities

Investing activities

Expenditures for property, plant and equipment
Issuance of secured loan
Other

Net cash provided by (used for) investing activities
Financing activities

Net additions (reductions) to revolving credit agreements

Purchase of treasury stock

Cash dividends paid

Financing fees paid

Other financing

Net cash provided by (used for) financing activities

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

Cash, cash equivalents and restricted cash

Increase (decrease) for the year
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

2023

Year Ended December 31
2022
(In thousands)

2021

25,242 $

25,267 $

21,306

4,362
(906)
5,394
—
(358)

—
(18,768)
30,761
10,856
37,493
(5,440)
88,636

(3,419)
(1,605)
(150)

(5,174)

(60,916)

(3,074)

(6,082)

—

—
(70,072)
1,084

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)

14,474
1,905
16,379 $

(245)
2,150
1,905 $

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)

(1,550)

—

(5,468)

(114)

(134)
(7,266)
(33)

(1,286)
3,436
2,150

15,370 $
72
937
16,379 $

928 $
62
915
1,905 $

1,125
48
977
2,150

Table of Contents

HAMILTON BEACH BRANDS HOLDING COMPANY
CONSOLIDATED STATEMENTS OF EQUITY

Balance, January 1, 2021

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

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)

Balance, December 31, 2022

Net income (loss)

Issuance of common stock, net of conversions

Purchase of treasury stock

Stock compensation expense

Cash dividends, $0.435 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)

100 $

41 $ 58,485 $

(5,960) $

—

(1)

—

(2)

3,103

—

44,915 $
21,306

—

(5,468)

—

(17,476) $
—

—

2,428

805

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

107 $

38 $ 65,008 $

(8,939) $

80,238 $

(11,918) $

124,534

—

(2)

—

(1)

—

(3,074)

5,394

—

25,242

—

(6,082)

—

(750)

2,001

25,242

(3,074)

5,394

(6,082)

(750)

2,001

Balance, December 31, 2023

112 $

36 $ 70,401 $ (12,013) $

99,398 $

(10,667) $

147,267

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

Throughout this Annual Report on Form 10-K and the notes to consolidated financial statements, references to “Hamilton
Beach Holding”, “the Company”, “we”, “us” and “our” and similar references are to Hamilton Beach Brands Holding Company
and its subsidiaries on a consolidated basis unless otherwise noted or as the context otherwise requires. Hamilton Beach Brands
Holding Company is a holding company and operates through its indirect, wholly owned subsidiary Hamilton Beach Brands,
Inc., a Delaware corporation (“HBB”). HBB is the Company’s single reportable segment.

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, 2023, HBB is the Company’s single reportable operating segment. The Company’s reportable segment is
determined based on (1) financial information reviewed by the chief operating decision maker (“CODM”) (2) operational
structure of the Company which is designed and managed to share resources across the entire suite of products offered by the
business, and (3) 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.

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.

The Company maintains significant trade receivables balances with several large retail customers. As of December 31, 2023
and 2022, receivables from the Company’s five largest customers represented 72% and 73%, respectively, of HBB’s net trade
receivables. The Company’s significant credit concentration is uncollateralized; however, historically, minimal credit losses
have been incurred.

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)

Accounts payable - Supplier Finance Program

The Company has an agreement with a third-party administrator to provide an accounts payable tracking system which
facilitates a participating supplier’s ability to monitor and voluntarily elect to sell payment obligations owed by the Company to
the designated third-party financial institution. Participating suppliers can sell one or more of the Company’s payment
obligations at their sole discretion. The Company has no economic interest in a supplier’s decision to sell one or more of its
payment obligations. The Company’s rights and obligations with respect to such payment obligations, including amounts due
and scheduled payment terms, are not impacted by suppliers’ decisions to sell amounts under these arrangements. The
agreement has a limit of $60.0 million in payment obligations ($85.0 million during peak season from August to January).
There is no requirement to provide assets pledged as security or other forms of guarantees under the agreement. The Company
pays the third-party administrator based upon the original payment terms negotiated with participating suppliers. The payment
of these obligations by the Company is included in cash used in operating activities in the Consolidated Statement of Cash
Flows. As of December 31, 2023 and 2022, the Company has $55.0 million and $23.3 million, respectively, in outstanding
payment obligations that are presented in Accounts payable on the Consolidated Balance Sheets. Of these totals, the third-party
financial institution has made payments to participating suppliers to settle $48.9 million and $23.3 million, respectively, of our
outstanding payment obligations.

Transfer of Financial Assets

The Company has entered into an arrangement with a financial institution to sell certain U.S. trade receivables on a non-
recourse basis. Under the terms of the agreement, the Company receives cash proceeds and retains no rights or interest and has
no obligations with respect to the sold receivables. These transactions, which are accounted for as sold receivables, result in a
reduction in trade receivables because the agreement transfers effective control over and risk related to the receivables to the
buyer. Under this arrangement, the Company derecognized $128.7 million, $118.5 million and $140.7 million of trade
receivables during 2023, 2022 and 2021, respectively. The losses incurred on sold receivables in the consolidated results of
operations for the years ended December 31, 2023, 2022 and 2021 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

The Company and environmental consultants are investigating or remediating historical environmental contamination at some
current and former sites operated by the Company or by businesses has 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 its
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 its 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 $12.4 million, $11.8 million and
$8.6 million in 2023, 2022 and 2021, 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 (1) three years after the participant’s retirement date, or (2) the participant’s death or
permanent disability. The Company issued 169,227, 150,062 and 158,272 shares of Class A Common in the years ended
December 31, 2023, 2022 and 2021, respectively. After the issuance of these shares, there were 553,341 shares of Class A
Common available for issuance under this plan. Stock compensation expense related to the Executive Plan was $4.2 million,
$2.3 million and $2.1 million for the years ended December 31, 2023, 2022 and 2021, 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, 2023, $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, 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. 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 (1) ten years after the Quarter Date
with respect to which such Required Shares were issued or transferred, (2) the date of the director’s death or date the director
terminates service as a director due to permanent disability, (3) five years (or earlier with the approval of the Board) after the
director’s date of retirement from the Board, or (4) the date the director has both retired from the Board and has reached age 70.
Pursuant to this plan, the Company issued 100,238, 90,223 and 57,735 shares in the years ended December 31, 2023, 2022 and
2021, 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 2023 and 2022. Total shares issued under voluntary elections were 1,768 in 2021. After the issuance of
these shares, there were 93,408 shares of Class A Common available for issuance under this plan. Stock compensation expense
related to these awards was $1.2 million, $1.1 million and $1.1 million for the years ended December 31, 2023, 2022 and 2021,
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 has finance leases for certain equipment. The Company has elected not to record short-term leases
with initial terms of twelve months or less in its Consolidated Balance Sheets. Lease expense for operating leases is recognized
on a straight-line basis over the lease term. Lease expense for finance leases is recognized on a straight-line basis over the lease
term unless a purchase option is exercised to transfer title at the end of the lease term in which case the expense is amortized
over the useful life of the asset. 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 its
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. The Company’s
estimated incremental borrowing rate reflects a secured rate based on recent debt issuances, its estimated credit rating, lease
term, as well as publicly available data for instruments with similar characteristics.

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)

Treasury Stock

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

Income Taxes

Tax law requires certain items to be included in the tax return at different times than the items are reflected in the financial
statements. Some of these differences are permanent, such as expenses that are not deductible for tax purposes, and some
differences are temporary, reversing over time, such as depreciation expense. These temporary differences create deferred tax
assets and liabilities using currently enacted tax rates. The objective of accounting for income taxes is to recognize the amount
of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of
events that have been recognized in the financial statements or tax returns. The effect of a change in tax rates on deferred tax
assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. 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.

Accounting Standards Adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)," which requires an entity to
recognize and present financial assets at the net amount expected to be collected. This guidance replaces the current incurred
loss impairment methodology for recognizing credit losses for financial assets and requires consideration of a broader range of
reasonable and supportable information for estimating credit losses. The Company considers a combination of factors, such as
historical losses, the aging of trade receivables, customers’ financial strength, credit standing and payment and default history in
determining the appropriate estimate of expected credit losses. The Company adopted ASU 2016-13 and related amendments
for the fiscal year beginning January 1, 2023; however, the adoption of this guidance did not have a material impact on the
Company’s financial condition, results of operations or cash flows.

In September 2022, the FASB issued ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of
Supplier Finance Program Obligations.” The new accounting rules create certain disclosure requirements for a buyer in a
supplier finance program. The new accounting rules require qualitative and quantitative disclosures including key terms of the
program, balance sheet presentation of related amounts, and the obligation amount the buyer has confirmed as valid to the
finance provider, including a rollforward of the obligation. Only the amount of the obligation outstanding is required to be
disclosed in interim periods. The accounting rules do not impact the recognition, measurement, or financial statement
presentation of supplier finance program obligations. The Company adopted this guidance in the first quarter of 2023. The new
accounting rules did not have an impact on the Company’s financial condition, results of operations or cash flows. The
Company included a new disclosure in accordance with the new accounting rules. The annual requirement for the rollforward
of the obligation is not effective until the fiscal year beginning January 1, 2024. The Company is planning to adopt at this time.

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)

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment
Disclosures,” which updates reportable segment disclosure requirements on an annual and interim basis. The amendments are
effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December
15, 2024. Early adoption is permitted. Updates should be applied retrospectively to all prior periods presented in the financial
statements. The Company is currently in the process of evaluating the impact of the new requirements but does not expect the
adoption of this guidance to have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,”
which enhances income tax disclosure requirements primarily involving more detailed disclosure for income taxes paid and the
effective tax rate reconciliation. The amendments are effective for annual periods beginning after December 15, 2024. Early
adoption is permitted. The amendments should be applied prospectively but retrospective application is permitted. The
Company is currently in the process of evaluating the impact of the new requirements but does not expect the adoption of this
guidance to have a material impact on the Company’s consolidated financial statements.

NOTE 2 - 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

2023

2022

226 $

10,885

9,704

33,626

14,981

3,177

72,599

45,198

27,401 $

226

11,617

9,713

32,660

14,921

959

70,096

42,266

27,830

Depreciation expense from property, plant and equipment, net for the years ended December 31, 2023, 2022 and 2021 was $4.2
million, $4.7 million, and $4.7 million, respectively.

NOTE 3 - Intangible Assets

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

Balance as of December 31, 2023
Trademarks

Balance as of December 31, 2022

Trademarks

Gross Carrying
Amount

Accumulated
Amortization

Net
Balance

$
$

3,100 $
3,100 $

(1,808) $
(1,808) $

1,292
1,292

3,100

(1,608)

3,100 $

(1,608) $

1,492

Amortization expense for intangible assets was $0.2 million for each of the years presented in the consolidated statements of
operations.

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)

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 6.5 years.

NOTE 4 - Current and Long-Term Financing

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

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

Total outstanding borrowings:

Revolving credit agreements

Total outstanding borrowings

December 31

2023

2022

$ 50,000

$ 110,895

$ 50,000

$ 110,895

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

$ 148,097

$ 149,227

Unused available borrowings

Weighted average stated interest rate on total borrowings

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

$ 98,097

38,332

6.84 %

4.25 %

3.80 %

3.49 %

Including swap settlements, interest paid on total debt was $3.0 million, $4.5 million and $2.8 million during 2023, 2022 and
2021, respectively. Interest capitalized was not material in 2023, 2022 and 2021.

HBB has a $150.0 million senior secured floating-rate revolving credit facility (the “HBB Facility”) that expires in June 2025.
Repayment of the HBB Facility is due on June 30, 2025, therefore all borrowings are classified as long-term debt as of
December 31, 2023. 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, 2023, 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, 2023, for base rate loans and SOFR loans denominated in U.S. dollars
were 0.00% and 1.55%, respectively. The applicable margins, effective December 31, 2023, for base rate loans and bankers’
acceptance loans denominated in Canadian dollars were 0.00% and 1.55%, 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.

Dividends 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.
Dividend amounts 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-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 - 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. The Company also incorporates the effect of HBB and counterparty credit risk into the valuation.

Other Fair Value Measurement Disclosures

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

There were no transfers into or out of Levels 1, 2 or 3 during the years ended December 31, 2023 and 2022.

NOTE 6 - Derivative Financial Instruments

Foreign Currency Derivatives

HBB held forward foreign currency exchange contracts with total notional amounts of $16.9 million and $11.3 million as of
December 31, 2023 and 2022, respectively, denominated primarily in Canadian dollars and Mexican pesos. The fair value of
these contracts approximated a payable of $0.5 million as of December 31, 2023 and a receivable of $0.1 million as of
December 31, 2022.

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 as of December 31, in millions:

Interest rate swaps

Delayed start interest rate swaps

Notional Amount
2022
2023

Average Fixed Rate
2022
2023

25.0 $

50.0

25.0 $

—

25.0 $

50.0

1.6 %

1.4 %

1.8 %

0.9 %

— %

1.6 %

Remaining Term at
December 31, 2023
Extending to January 2024

Extending to January 2028

Extending to January 2029

The fair value of HBB’s interest rate swap agreements was a receivable of $4.0 million as of December 31, 2023 and a
receivable of $5.4 million as of December 31, 2022. 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,
2023 are expected to continue to be effective as hedges.

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)

The following table summarizes the fair value of derivative instruments as of December 31, as recorded in the Consolidated
Balance Sheets:

Asset Derivatives

Liability Derivatives

Balance sheet location

2023

2022

Balance sheet location

2023

2022

Prepaid expenses and other
current assets
Other non-current assets

Prepaid expenses and other
current assets

$ 511 $ 837 Other current liabilities

$ — $ —

3,501

4,539 Other long-term liabilities

—

174 Other current liabilities

538

101

$ 4,012 $ 5,550

$ 538 $ 101

Interest rate swap agreements

Current

Long-term

Foreign currency exchange contracts

Current

Total derivatives

NOTE 7 - Leasing Arrangements

On January 1, 2022, the Company adopted ASU 2016-02, “Leases (Topic 842)”, which at commencement of the Company’s
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’s leases have remaining lease
terms of one month to 11 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 the Company will exercise that option.

The assets associated with the Company’s 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.

Operating lease cost

Finance lease cost

Amortization of leased assets

Interest on lease liabilities

Finance lease cost
Variable lease cost (1)
Short term lease cost (2)

Total lease cost

December 31

2023

2022

8,380 $

7,841

354,024

280

362,727 $

—

357,569

834

366,244

(1) Primarily related to production specific tooling assets provided by third-party suppliers which are included in product purchases.
(2) Leases with an initial term of 12 months or less

During the second quarter of 2023, the Company recognized a $0.5 million impairment charge related to the consolidation of
warehouses and the intention to sub-lease to a third-party, which is included within cost of sales in the Consolidated Statement
of Operations. The impairment was measured using a discounted cash flow based on the marketed rate of the warehouse and the
time expected to identify a sub-lessor.

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 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 of operating leases –
non-cash activity

Right-of-use assets obtained in exchange for lease obligations of finance leases –
non-cash activity

December 31

2023

2022

8,429 $

981 $

377 $

7,750

5,430

—

The following table reconciles the undiscounted future lease payments for operating and finance leases to the lease liabilities
recorded in the Consolidated Balance Sheet as of December 31, 2023:

Undiscounted Future Lease
Payments

2024

2025

2026

2027

2028

Thereafter

Total lease payments

Less: impact of discounting

Present value of lease payments

The following table summarizes the weighted-average lease term and discount rate.

Weighted average remaining lease term - operating leases

Weighted average remaining lease term - finance leases
Weighted average discount rate - operating leases (1)
Weighted average discount rate - finance leases (1)

December 31

2023

2022

9.0

4.5

5.0 %

7.6 %

8,398

6,609

6,062

5,768

5,566

27,780

60,183

12,091

48,092

9.7

0.0

4.8 %

— %

(1) The discount rates used to present value the lease liabilities are based on estimates of the Company’s incremental borrowing rate.

As of December 31, 2023, the Company did not have any additional material operating or finance leases that had not yet
commenced.

NOTE 8 - Stockholders' Equity and Earnings Per Share

Capital Stock

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

The Company’s 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-22

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

2023

2022

5,000

—

70,000

11,161

877

30,000

3,616

5,000

—

70,000

10,663

626

30,000

3,844

(1)
(2)
plan.

Class B Common converted to Class A Common were 228 shares during 2023 and 156 shares 2022.
The Company issued Class A Common of 270 during 2023 and 240 during 2022 related to the Company’s stock compensation

Stock Repurchase Program

In November 2023, 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 January 1, 2024 and ending December 31, 2025. The Company's previously
authorized share buyback program was approved by the Company’s Board in February 2022 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 years ended December 31, 2023 and 2022, the Company repurchased 250,772 and 261,049 shares for an aggregate
purchase price of $3.1 million and $3.0 million, respectively. There were no share repurchases during the year ended
December 31, 2021.

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)

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, 2021

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

Other comprehensive income (loss)

Reclassification adjustment to net income (loss)

Tax effects

Balance, December 31, 2023

Earnings per share

Foreign
Currency

Deferred Gain
(Loss) on Cash
Flow Hedging

Pension Plan
Adjustment

Total

(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

(8,924) $

4,158 $

(7,152) $

2,792

—

(280)

(4,529)

2,231

564

141

474

(142)

3,207

1,211

(1,185)

(14,243)

(359)

2,596

(11,918)

(1,596)

2,705

142

(6,412) $

2,424 $

(6,679) $

(10,667)

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

Diluted earnings (loss) per share

NOTE 9 - Revenue

2023

2022

2021

14,036

13,970

13,880

14,060

13,996

13,930

1.80 $

1.81 $

1.80 $

1.81 $

1.54

1.53

The Company’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 the Company may repair or replace, in its discretion, products returned under
warranty. Accordingly, the Company determined that no separate performance obligation exists.

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

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)

A description of revenue sources and performance obligations for the Company are as follows:

Consumer and Commercial product revenue
Transactions with both consumer and commercial customers generally originate upon the receipt of a purchase order from a
customer, which in some cases are governed by master sales agreements, specifying product(s) that the customer desires.
Contracts for product revenue have an original duration of one year or less, and payment terms are generally standard and based
on customer creditworthiness. Revenue from product sales is recognized at the point in time when control transfers to the
customer, which is either when a product is shipped from the Company’s facility, or delivered to customers, depending on the
shipping terms. The amount of revenue recognized varies primarily with price concessions and changes in returns. The
Company offers price concessions to its customers for incentive offerings, special pricing agreements, price competition,
promotions or other volume-based arrangements. The Company evaluated such agreements with its customers and determined
returns and price concessions should be accounted for as variable consideration.

Consumer product revenue consists of sales of small electric household and specialty housewares appliances to traditional
brick-and-mortar and ecommerce retailers, distributors and directly to the end consumer. A majority of this revenue is in North
America.

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

License revenue
From time to time, the Company enters into exclusive and non-exclusive licensing agreements which grant the right to use
certain of the Company’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, the Company 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. The Company recognizes revenue at the
later of when the subsequent sales occur or when the performance obligation is satisfied (over time).

The following table presents the Company’s revenue on a disaggregated basis for the year ending:

Consumer products

Commercial products

Licensing

Total revenues

Year Ended

December 31

2023

2022

2021

568,006

573,898

612,795

52,327

5,292

61,455

5,596

40,978

4,621

625,625

640,949

658,394

Walmart Inc. and its global subsidiaries accounted for approximately 27%, 26% and 28% of the Company’s revenue in 2023,
2022 and 2021, respectively. Amazon.com, Inc. and its subsidiaries accounted for approximately 24%, 23% and 22% of The
Company’s revenue in 2023, 2022 and 2021 respectively. The Company’s five largest customers accounted for approximately
64%, 61% and 61% of its revenue in 2023, 2022 and 2021, respectively.

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 - Contingencies

The Company is involved in various legal and regulatory proceedings and claims that have arisen in the ordinary course of
business, including product liability, patent infringement, asbestos related claims, environmental and other claims. Although it
is difficult to predict the ultimate outcome of these proceedings and claims, the Company believes the ultimate disposition of
these matters will not have a material adverse effect on the financial condition, results of operation or cash flows of the
Company. Any costs that the Company estimates will be paid as a result of these claims are accrued when the liability is
considered probable and the amount of such costs can be reasonably estimated. If a range of amounts can be reasonably
estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued.
The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount
cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies
where an unfavorable outcome is probable or reasonably possible and which are material, the Company discloses the nature of
the contingency and, in some circumstances, an estimate of the possible loss.

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

Environmental matters

The Company is investigating or remediating historical environmental contamination at some current and former sites operated
by it or by businesses it acquired. Based on the current stage of the investigation or remediation at each known site, the
Company 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.

The Company’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 the Company’s estimate of the time required to remediate the sites changes. The Company’s
current estimates may differ materially from original estimates.

As of December 31, 2023 and December 31, 2022, the Company had accrued undiscounted obligations of $3.4 million and $3.2
million respectively, for environmental investigation and remediation activities. The increase in the amount accrued as of
December 31, 2023 compared to December 31, 2022 is due to a change in the expected type and extent of investigation and
remediation activities associated with some of the sites. The Company 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, 2023, the Company 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, the Company has a $1.3 million asset associated with the reimbursement of costs associated with two
sites, which is included in prepaid expenses and other current assets (current portion) and other non-current assets.

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)

NOTE 11 - Income Taxes

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

Income (loss) before income taxes

Domestic

Foreign

Income tax expense (benefit)

Current income tax expense (benefit):

Federal

State

Foreign

Total current

Deferred income tax expense (benefit):

Federal

State

Foreign

Total deferred

2023

2022

2021

24,008 $

34,400 $

27,187

7,688

(1,971)

1,770

31,696 $

32,429 $

28,957

3,412 $

6,297 $

1,452

2,496

7,360

910

(9)

(1,807)

(906)

2,463

(1,970)

6,790

(669)

(153)

1,194

372

6,454 $

7,162 $

2,520

1,015

2,006

5,541

1,815

556

(261)

2,110

7,651

The Company made $3.1 million, $5.3 million and $6.4 million federal income tax payments during 2023, 2022 and 2021,
respectively, to the IRS. The Company made foreign and state income tax payments of $3.2 million, $4.0 million and $2.6
million during 2023, 2022 and 2021, respectively. Income tax refunds totaled $0.1 million in 2023 and $0.5 million in 2022.
No income tax refunds were received in 2021.

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

Income (loss) before income taxes

$ 31,696

$ 32,429

$ 28,957

Statutory taxes at 21%

6,656

21.0 % $

6,810

21.0 % $

6,081

21.0 %

2023

2022

2021

State and local income taxes

Valuation allowances

Other non-deductible expenses
Credits

Effect of foreign operations

Unrecognized tax benefits

Other, net

Income tax provision

1,224

3.9 %

1,850

5.7 %

1,357

0.1 %

402
(860)

1.3 %
(2.7) %

(946)

(3.0) %

642

384
(900)

(526)

2.0 %

1.2 %
(2.8) %

(1.6) %

422

1.3 %

(1,179)

(3.6) %

297

579
(681)

(399)

687

4.7 %

1.0 %

2.0 %
(2.4) %

(1.4) %

2.4 %

(457)

(1.5) %

0.2 %

(270)

(0.9) %

6,454

20.4 % $

7,162

22.1 % $

7,651

26.4 %

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)

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

Lease liabilities

Inventory

Accrued expenses and reserves

Other employee benefits

Other

Total deferred tax assets

Less: Valuation allowances

Deferred tax liabilities

Right-of-use lease assets

Accrued pension benefits

Depreciation and amortization

Total deferred tax liabilities

Net deferred tax asset

December 31

2023

2022

2,206 $

2,208

1,420

3,131

316

302

9,583

(2,780)

6,803

3,349

803

4,222

2,581 $

2,195

2,219

1,216

1,696

2,835

1,155

11,316

(2,153)

9,163

3,130

2,847

6,046

3,117

Certain items have been reclassified from their prior year classifications to conform to the current year presentation. These
reclassifications had no effect on net income or stockholder's equity as previously reported.

As of December 31, 2023 and 2022, respectively, the Company maintained valuation allowances with respect to certain
deferred tax assets relating primarily to operating losses in certain non-U.S. jurisdictions that the Company believes are not
likely to be realized.

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

Non-U.S. net operating loss

December 31, 2023

Net deferred tax
asset

Valuation
allowance

Carryforwards
expire during:

2,780 $

2,780

2024 - Indefinite

December 31, 2022

Net deferred tax
asset

Valuation
allowance

Carryforwards
expire during:

1,923 $

1,923

2023 - 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.

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)

As of December 31, 2023, the cumulative unremitted earnings of the Company’s foreign subsidiaries are approximately $19.3
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, 2023, 2022 and 2021. Approximately $1.4 million, $0.2 million and $3.8 million of these gross amounts as of December 31,
2023, 2022 and 2021, 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.

Balance as of January 1

256 $

3,855 $

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

Additions based on tax positions related to the current year

Reductions for lapse of statute of limitations

Reductions due to settlements with taxing authorities

Balance as of December 31

769

493

(71)

—

(3,476)

(194)

—

1,447 $

256 $

4,114

(110)

—

(189)

3,855

2023

2022

2021

The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The
Company recognized no income or expense as of December 31, 2023. The Company recognized income of $1.5 million related
to the reversal of interest and penalties as of December 31, 2022. The Company recognized expense of $1.1 million related to
interest and penalties as of December 31, 2021. There were no accruals for interest and penalties as of December 31, 2023 and
2022. The total amount of interest and penalties accrued was $1.9 million as of December 31, 2021.

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 Company is generally open for examination of foreign
jurisdictions for the tax year 2017 and beyond. In addition, the Company has extended the U.S. federal statute of limitations for
tax years 2017 through 2019 related to a specific issue. Other than the extension related to a specific issue, 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 12 - 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.

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)

During 2022, the Board approved the termination of our U.S. defined benefit pension plan (the “Plan”) with an effective date of
September 30, 2022. The termination process is still ongoing and is expected to be completed in 2024. Benefit obligations
under the Plan will be settled through a combination of lump sum payments to eligible plan participants and the purchase of a
group annuity contract, under which future benefit obligations will be transferred to a third-party insurance company. The
Company currently expects that all surplus assets remaining after the Plan termination will be transferred to a qualified
replacement plan. The deferred loss within Accumulated Other Comprehensive Income will be recognized fully when the plan
is terminated or as settlements occur, which would trigger accelerated recognition.

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

2023

2022

2021

5.01 %

5.34 %

4.00 %

4.63 %

5.15 %

6.00 %

5.34 %

3.22 %

6.44 %

5.15 %

2.90 %

4.75 %

2.46 %

1.87 %

7.25 %

2.90 %

2.38 %

4.75 %

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

2023

2022

2021

674 $

478 $

338

(1,082)

(1,820)

(2,033)

358

—

520

347

591

—

(50) $

(475) $

(1,104)

162 $

127 $

(258)

118

(261)

(16)

22 $

(150) $

118

(260)

(79)

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)

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

Total recognized in other comprehensive loss (income)

Non-U.S. Plan

Current year actuarial loss (gain)

Amortization of actuarial (loss) gain

Total recognized in other comprehensive loss (income)

2023

2022

2021

(33) $

5,558 $

(2,228)

—

(358)

(347)

(520)

—

(591)

(391) $

4,691 $

(2,819)

(108) $

(114) $

(118)

(226) $

(98) $

(742)

(63)

(805)

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 as of December 31:

Change in benefit obligation

Projected benefit obligation at beginning of year

14,495 $

3,238 $

17,004 $

4,607

2023

2022

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

674

(350)

162

186

478

(952)

(1,903)

(265)

(1,497)

—

(538)

—

12,916 $

3,401 $

14,495 $

12,916 $

3,401 $

14,495 $

127

(979)

(265)

—

(252)

3,238

Fair value of plan assets at beginning of year

26,294 $

4,401 $

33,019 $

5,772

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:

765

(1,903)

—

551

(265)

—

(142)

109

(4,690)

(1,497)

(538)

—

(598)

(265)

—

(178)

(330)

25,156 $

4,654 $

26,294 $

4,401

12,240 $

1,253 $

11,799 $

1,163

Deferred costs

12,240 $

1,253 $

11,799 $

1,163

Components of accumulated other comprehensive loss consist of:

Actuarial loss

Deferred taxes

(8,910) $

(95) $

(9,301) $

(321)

2,265

2,378

(6,645) $

(32) $

(6,923) $

(229)

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)

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 2024.

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

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:

2024

2025

2026

2027

2028

2029-2033

U.S. Plan

Non-U.S. Plan

13,241 $

—

13,241 $

237

244

252

263

262

1,235

2,493

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.

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 were based upon the rates of return earned or expected to be earned by investments in the
equivalent benchmark market indices for each of the asset classes.

Expected returns for U.S. pension plans are based on a calculated market-related value for U.S. pension plan assets. Under this
methodology, asset gains and losses resulting from actual returns that differ from the Company’s expected returns are
recognized in the market-related value of assets ratably over three years. Expected returns for non-U.S. pension plans are based
on fair market value for non-U.S. pension plan assets.

The pension plans maintain investment policies that, among other things, establish a portfolio asset allocation methodology
with percentage allocation bands for individual asset classes. The investment policies provide that investments are reallocated
between asset classes as balances exceed or fall below the appropriate allocation bands.

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 is the actual allocation percentage and target allocation percentage for the U.S. pension plan assets as of
December 31:

Fixed income securities

Money market

2023
Actual
Allocation

2022
Actual
Allocation

Target Allocation
Range

96.2 %

3.8 %

95.9 % 95.0% - 100.0%

4.1 %

0.0% - 5.0%

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

Canadian equity securities

Non-Canadian equity securities

Fixed income securities

Money market

2023
Actual
Allocation

2022
Actual
Allocation

Target Allocation
Range

31.4 %

31.2 %

37.4 %

— %

40.0 % 25.0% - 35.0%

40.6 % 25.0% - 35.0%

19.4 % 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

2023

2022

2023

2022

—

24,202

954

—

25,213

1,081

1,193

1,720

1,741

—

1,060

2,488

853

—

25,156

26,294

4,654

4,401

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 (1) the effect of actual operating profit results
compared with targeted operating profit results and (2) the age and/or compensation of the participants. Total costs, including
Company contributions, for these plans were $5.0 million in 2023, $5.2 million in 2022 and $5.0 million in 2021.

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)

NOTE 13 - Data by Geographic Region

Revenue and property, plant and equipment related to 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

2023

2022

2021

U.S.

Other

Consolidated

493,711 $

131,914 $

625,625

23,068 $

4,333 $

27,401

504,449 $

136,500 $

640,949

24,207 $

3,623 $

27,830

524,093 $

134,301 $

658,394

26,604 $

3,881 $

30,485

No single country outside of the U.S. comprised 10% or more of HBB’s revenue from unaffiliated customers. There is one
single country outside of the U.S. that comprised 10% or more of HBB’s property, plant and equipment, net.

NOTE 14 - Subsequent Events

On February 2, 2024, the Company acquired HealthBeacon PLC (“HealthBeacon”), a medical technology firm and strategic
partner of the Company, for 6.9 million euros (approximately $7.5 million). As a result, the secured loans made under the
Facility Agreement with HealthBeacon were extinguished. As of December 31, 2023, the outstanding loan balance including
accrued interest was 1.5 million euros ($1.6 million) and is included in prepaid expenses and other current assets. The funding
of the loan by the Company is included in cash used in investing activities in the Consolidated Statement of Cash Flows.

F-34

Table of Contents

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
HAMILTON BEACH BRANDS HOLDING COMPANY
YEAR ENDED DECEMBER 31, 2023, 2022 AND 2021

Description

2023

Reserves deducted from asset accounts:

Allowance for doubtful accounts

Deferred tax valuation allowances

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

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)

957 $

79 $

— $ —

(A)

2,153 $

— $

(621) (C)

1,036 $

(79) $

— $ —

(A)

2,095 $

568 $

— $

510

(C)

1,144 $

(179) $

— $

(71) (A)

2,102 $

170 $

— $

177

(C)

1,036

2,780

957

2,153

1,036

2,095

(A)

(B)

(C)

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.

F-35

Y
N
A
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N
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B
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Corporate Information

Annual Meeting
The Annual Meeting of Stockholders of Hamilton Beach
Brands Holding Company will be held on May 9, 2024, 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
hamiltonbeach.com
proctorsilex.com
hamiltonbeachcommercial.com
westonbrands.com
wolfgourmet.com
chisteam.com
bartesian.com
cloroxhomeappliances.com
brita.com/countertop-devices
numilk.com
smartsharpsbin.com

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

An Equal Opportunity Employer