HAMILTON BEACH BRANDS HOLDING COMPANY ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 RESULTS.

GLEN ALLEN, Va: Hamilton Beach Brands Holding Company (NYSE: HBB), which operates through its wholly-owned subsidiary Hamilton Beach Brands, Inc., today announced results for the fourth quarter and full year 2022.

Highlights

Q4 2022 revenue of $196.2 million was nearly flat to Q4 2021, as increased revenue in the global commercial, U.S. and Mexican consumer markets was offset by decreased revenue in the Latin American and Canadian markets

Q4 2022 operating profit was $11.3 million compared to $17.9 million in Q4 2021, reflecting short-term gross profit margin contraction, primarily due to holiday promotions, partially offset by lower SG&A expense

Full-year 2022 revenue of $640.9 million, the second highest in the history of Hamilton Beach Brands, compared to a record $658.4 million in 2021

Full-year 2022 operating profit was $38.8 million, including a $10.0 million insurance recovery, compared to $31.5 million in 2021

The Company effectively managed elevated inventory levels during the year and significantly reduced inventory and debt in Q4 2022

Demand for small kitchen appliances in 2023 is expected to decrease moderately compared to 2022, especially in the first half of the year, as consumers continue to calibrate spending in response to inflation and economic concerns

For the full year 2023, Hamilton Beach Brands expects total revenue to be flat to 2022 and operating profit to increase, excluding the insurance recovery in 2022

Fourth Quarter 2022 Compared to Fourth Quarter 2021

Total revenue of $196.2 million compared to $197.8 million in the fourth quarter of 2021. Lower unit volume was offset by higher prices and a favorable product mix. Revenue increased in the global commercial market and in the U.S. and Mexican consumer markets, while revenue decreased in the Latin American and Canadian consumer markets. Consumer revenue overall was below expectations due to softer than anticipated consumer pull-through and retailer reorders during the holiday selling season.

In the global commercial market, revenue increased $6.0 million, or 57.1%. This growth reflects 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. In the premium market, revenue increased 14.5%. Revenue in the ecommerce channel accounted for 44.9% of total revenue and increased 0.4%.

Gross profit was $34.1 million compared to $43.1 million. Gross profit margin was 17.4% compared to 21.8%. This short-term contraction was primarily due to holiday promotions offered in response to soft consumer consumption trends and other efforts to reduce inventory levels.

Selling, general and administrative expenses decreased to $22.8 million compared to $25.1 million, primarily due to lower environmental expense and lower expenses for temporary workers and outside services.

Operating profit was $11.3 million compared to $17.9 million.

Interest expense, net increased by $0.9 million to $1.7 million, due primarily to rising interest rates, as well as increased average borrowings outstanding under the Company's revolving credit facility.

Net income was $7.1 million, or $0.51 per diluted share, compared to net income of $12.6 million, or $0.90 per diluted share.

Full Year 2022 Compared to Full Year 2021

Total...