On July 31, 2024, Hamilton Beach Brands Holding Co (HBB, Financial) released its 8-K filing announcing its second quarter 2024 results. Hamilton Beach Brands Holding Co, through its subsidiaries, is engaged in consumer, commercial, and specialty small appliances and specialty retail. It designs, markets, and distributes small branded electric household and specialty housewares small appliances, as well as commercial products for restaurants, bars, and hotels.
Performance Overview
Hamilton Beach Brands Holding Co (HBB, Financial) reported a significant increase in revenue and profit for Q2 2024 compared to the same period in 2023. Total revenue for the quarter was $156.2 million, a 14.0% increase from $137.1 million in Q2 2023. This growth was driven by higher volume and a favorable product mix, with notable increases in the US, Mexican, and Latin American consumer markets, as well as the global commercial market. However, revenue decreased in the Canadian consumer market.
Gross profit for the quarter was $40.5 million, or 25.9% of total revenue, compared to $27.4 million, or 20.0%, in the prior year period. The 590 basis point expansion in gross profit margin was primarily due to lower product costs and a favorable product mix.
Financial Achievements
Operating profit saw a substantial increase, reaching $10.0 million compared to $0.7 million in Q2 2023. This improvement was largely attributed to the expansion in gross profit. Net income for the quarter was $6.0 million, or $0.42 per diluted share, compared to $0.1 million, or $0.01 per diluted share, in the same period last year.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $156.2 million | $137.1 million |
| Gross Profit | $40.5 million | $27.4 million |
| Operating Profit | $10.0 million | $0.7 million |
| Net Income | $6.0 million | $0.1 million |
Balance Sheet and Cash Flow
For the six months ended June 30, 2024, net cash provided by operating activities was $37.1 million compared to $57.3 million in the prior year period. The decrease was primarily due to significant excess inventory reduction activities in 2023. Capital expenditures remained consistent at $1.5 million for both periods. The company allocated its strong cash flow to fund the acquisition of HealthBeacon and return value to shareholders through dividends and share repurchases.
On June 30, 2024, net debt was $12.8 million, a significant reduction from $57.8 million on June 30, 2023. The company paid $3.1 million in dividends during Q2 2024 and repurchased 220,212 shares of its Class A common stock for an aggregate purchase price of $4.0 million.
Strategic Initiatives and Outlook
Hamilton Beach Brands Holding Co (HBB, Financial) continues to focus on its six strategic initiatives aimed at driving revenue growth, expanding margins, and generating strong cash flow over time. These initiatives include driving core growth, gaining share in the premium market, accelerating growth of Hamilton Beach Health, leading in the global commercial market, accelerating digital transformation, and leveraging partnerships and acquisitions.
The company expects a modest increase in revenue and a significant increase in operating profit for the full year 2024 compared to 2023, driven by gross margin expansion. The termination of its over-funded US defined benefit pension plan is expected to be completed in Q3 2024, potentially freeing up cash flow in 2025 and 2026.
Hamilton Beach Brands Holding Co (HBB, Financial) remains committed to its strategic initiatives and is optimistic about its ability to deliver above-market revenue performance and significant operating profit growth in the coming years.
Explore the complete 8-K earnings release (here) from Hamilton Beach Brands Holding Co for further details.
