NYSE:HBB Hamilton Beach Brands Q3 2023 Earnings Report $13.93 -0.53 (-3.67%) Closing price 05/7/2025 03:59 PM EasternExtended Trading$13.92 0.00 (-0.04%) As of 05/7/2025 07:43 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Hamilton Beach Brands EPS ResultsActual EPS$0.74Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AHamilton Beach Brands Revenue ResultsActual Revenue$153.61 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AHamilton Beach Brands Announcement DetailsQuarterQ3 2023Date11/1/2023TimeN/AConference Call DateThursday, November 2, 2023Conference Call Time9:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Hamilton Beach Brands Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 2, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Day, everyone, and welcome to the Hamilton Beach Brands Holding Company Third Quarter 2023 Earnings Conference Call and Webcast. Today's call is being recorded. And I would now like to turn the conference over to Lou Anne Nabhan, Head of Investor Relations. Please go ahead. Speaker 100:00:14Thank you, Lisa, and good morning, everyone. Welcome to our 3rd Quarter 2023 Earnings Conference Call and Webcast. Yesterday after the market closed, we issued our Q3 2023 earnings release and filed our 10 Q with the SEC. Copies are available on our website. Our speakers today are Greg Trapp, President and Chief Executive Officer and Sally Cunningham, Senior Vice President and Chief Financial Officer. Speaker 100:00:40Joining us for Q and A will be Scott Tidy, Senior Vice President, Global Sales. Our presentation today does include forward looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in either the prepared remarks or during the Q and A. Additional information regarding these risks and uncertainties is available in our earnings release and in the Q4 of 2018. The company disclaims any obligation to update these forward looking Statements, which may not be updated until our next quarterly conference call, if at all. Speaker 100:01:20And now I'll turn the call over to Greg. Speaker 200:01:23Thank you, Lou Anne. Good morning, everyone. Thank you for joining us. I will take the next few minutes to provide an overview of our performance for the Q3 of 2023 and discuss our expectations for the remainder of the year. Then Sally will discuss our financials in more detail. Speaker 200:01:39After that, we will take your questions. We were pleased with our Q3 results. As expected, revenue returned to growth and increased nearly 2% compared to last year's Q3. Our gross profit margin expanded by 300 basis points to 26.1%. Lower average sales price Was offset by lower product costs and lower distribution and warehousing costs. Speaker 200:02:05Operating profit increased 54% to $14,400,000 compared to $9,400,000 in the Q3 of 2022, reflecting the gross margin expansion in flat SG and A. We also continue to deliver significant improvement in net working capital and free cash flow. Sally will discuss the actual results. Regarding our revenue results, in our consumer markets, overall revenue increased approximately 3%. By market, revenue increased in our Latin America and Mexican markets as a result of increased distribution across key retailers. Speaker 200:02:44Revenue decreased in our U. S. And Canadian markets as a result of softer demand in the small kitchen appliance category compared to last year. In our global commercial market, revenue decreased 11%. This decline is attributable to demand normalizing compared to the Q3 of 2022 When revenue grew nearly 36% due to strong post pandemic demand in the foodservice and hospitality industries. Speaker 200:03:11Additionally, the current year sales decline occurred in international markets, while sales in the U. S. Foodservice and Hospitality Industries performed well. As we have discussed in our previous calls this year, for the full year 2023, we expect a solid performance for the soft first half and a stronger second half, which is how the year has unfolded. Our expectations for the stronger second half were based on and an increase in placements and promotions across many of our North American customers. Speaker 200:03:44This year, we're introducing more than 40 new product platforms Across a wide variety of categories. These include products in high demand categories like single serve coffee, personal blenders, Ovens, grills, slow cookers, garment steamers and many others. Our team has done an outstanding job securing placements and promotions for our new products across A broad range of customers and channels. Our new products that are in the marketplace now are selling well overall. We have also gained market share this year that we expect will benefit us in the Q4 and in 2024. Speaker 200:04:20We believe our incremental placements, Planned holiday promotions, new products and increased market share position us well for a solid holiday selling season. I will comment on the small kitchen appliance industry in a moment, but at first I will note we are further encouraged that retail sales overall In the U. S. Have continued to grow year over year and consumer spending has been resilient. At the same time, Economists and retailers have expressed uncertainty regarding continued momentum due to inflation and high interest rates. Speaker 200:04:55Consequently, consumer spending for the small kitchen appliance industry and the overall marketplace remains challenging to predict. There are mixed signals with some data pointing towards solid trends, while others are indicating a potential softening is underway. Small appliance industry sales decreased modestly through September compared to the same period last year, but remained above pre pandemic levels. While we have seen no indication of a significant drop in spending on the small kitchen appliance category in the near future, We do expect it to end the year down slightly. As always, our final results will depend on the sell through at retail and retail replenishment orders. Speaker 200:05:38Given the uncertainty in the macroeconomic environment, we've adopted a slightly more conservative view regarding full year 2023 revenue and have slightly lowered our expectation from flat with 2022 to modestly below 2022. We could end up chasing demand depending on consumer spending, but we want to avoid generating increased levels of excess inventory by being too optimistic. Despite the slightly lower revenue outlook, we continue to expect operating profit to be above last year, excluding the non recurring $10,000,000 insurance Recovery in 2022. I also want to take a few minutes to discuss our longer term view. Since our spin off into an independent public company in 20 17, we have said that we operate our business for the long term. Speaker 200:06:26As a reminder, we have 6 strategic initiatives to drive long term growth. We continue to make progress with these initiatives that are designed to drive revenue growth, expand margin and generate strong cash flow over time. The initiatives are focused on increasing sales of innovative, higher priced, higher margin products in our core North American market. Across our initiatives, we have continued to expand our portfolio of leading trusted brands. We also continue our commitment to consumer driven innovation and launched 250 new product platforms in the last 5 years. Speaker 200:07:03We expect the momentum to continue in 2024. Let me briefly summarize each initiative. First, we want to gain share in the premium market. We have a growing number of Licensed brands in the premium market including Wolf Gourmet and Chi. More recently, we have established new partnerships with Bartesian and Newmilk. Speaker 200:07:23We acquired Westin Brands and created the Hamilton Beach Professional brand. In 2022, sales of our premium brands accounted for 15% of total revenue. We expect premium brand sales to be on track with or ahead of that amount in 2023. Next, we plan to expand in home health and wellness. We launched an initiative to expand our participation in the large and fast growing Home Health and Wellness Market in 2021. Speaker 200:07:52We entered into a trademark licensing agreement with Clorox and launched a new line of premium air purifiers under the Clorox brand in 2022. We entered into a licensing agreement with Brita in 2022. In early 2023, we launched a new category for electric countertop water filtration under the name Brita Hub. This electric count top appliance creates fresh, great tasting water much faster than traditional pitchers. We've also begun to participate in the home medical market where several trends are converging that we believe We can drive strategic opportunities for us. Speaker 200:08:33The aging population in our country is creating a large pool of individuals who are living with and managing Chronic health conditions. Many younger people are doing so as well. There is also a growing shortage of primary care physicians, Nurses and other medical clinicians for these and other reasons, including advances in technology, The healthcare industry is implementing new solutions that enable patients to manage many of their healthcare needs at home. Often these solutions combine a connected medical device and digital communications, which can provide key information to patients or report information back to medical providers. We believe Our company can help both the patients and the medical providers through solutions created under the Hamilton Beach Health banner. Speaker 200:09:23Over the past few years, we've had discussions with many companies in the home medical market about prospective collaborations. A few years ago, we met with a company called HealthBeacon, which is based in Dublin. HealthBeacon is a digital therapeutics company that has created a patent protected FDA cleared system for managing injectable medications, which are used to treat a broad range of chronic conditions in the home. Their system is a connected countertop medical device that combines with a digital support system to help patients manage their adherence to their prescribed treatment. Device also provides for the safe disposal of sharps. Speaker 200:10:02HealthBeacon was seeking a relationship with a company that could help them market and distribute their system in the large U. S. And Canadian markets. In June of 2021, we entered into an exclusive multiyear commercial relationship to do that. March 2022, we introduced the SmartSharp Spin from Hamilton Beach Health powered by HealthBeacon in the U. Speaker 200:10:24S. Healthpeak has an agreement with a major specialty pharmacy company and there is a strong pipeline of prospects. As HealthBeacon prepared to deploy the system to market, they experienced delays. Unfortunately, this has caused HealthBeacon to experience financial pressures and ultimately a cash squeeze. Last Friday, HealthBeacon entered examinership, an Irish statutory framework for restructuring companies in financial difficulty. Speaker 200:10:51Hamilton Beach Brands has entered into a facility agreement with HealthBeacon under which we will make secured loans to HealthBeacon up to a total of €1,850,000 or approximately $2,000,000 to fund its operations during the examinership, which is a period up to 100 days. Due to our existing commercial relationships with HealthBeacon and our knowledge of current and prospective specialty pharmacy orders, We believe HealthBeacon should be able to stabilize and continue to operate. Now let me turn to how we are working to increase our leadership in the global commercial market. We are a leading participant in the global commercial market, serving the foodservice and hospitality industries with small kitchen appliances. We continue to develop products that support our competitive advantage in the core blending and mixing categories and we have expanded into new categories as well. Speaker 200:11:47We continue to increase our relationship with the regional and global chains. In 2022, sales of our commercial products accounted for 10% of our total revenue. Our sales of commercial products increased 50% in 2022 as businesses in the foodservice and hospitality industries engaged And significant post pandemic restocking. While we do not expect that growth rate to continue, we do expect the commercial products As we expand into new markets, we continue to drive the growth of core brands continue to invest in driving the growth of our flagship brands Hamilton Beach and Procter Silex in our core North American market. Hamilton Beach remains the number one unit brand in the U. Speaker 200:12:38S. Our rebranding of Procter Silex as Simply Better has gained traction in the marketplace. We are accelerating our digital transformation for the benefit of all the markets we serve. We continue to make significant investments in our well developed e commerce capability And digital marketing. Through the 1st 9 months of this year, e commerce sales accounted for 36.5% of our total sales, up from 35% in the same period last year. Speaker 200:13:07In addition to organic growth, we plan to also leverage partnerships and acquisitions. We are actively engaged in the pursuit of additional trademark licensing agreements, strategic alliances and acquisitions to drive growth in all of our markets. For all these reasons, we believe we are well positioned to deliver strong results and increase shareholder value in the years to come. Let me conclude by sharing some early thoughts about 2024. Over the past few years, our strong team has managed through an extraordinary operating environment due to a wide variety of factors such as tariffs, pandemic driven historic surge in demand, disruptions across the supply chain and spiking then falling product and container costs. Speaker 200:13:54Early this year, we were still working through the remnants of that environment. At this time, however, Most suppliers have returned to normal lead times and transit times have returned to normal. Our biggest challenge in the short term is understanding the expected retailer and consumer demand. Retailers reduced their on hand inventory levels earlier this year. The point of sale trends are down slightly, but are still above pre pandemic levels. Speaker 200:14:21While our revenue is now increasing over 2022, we continue to receive orders that are slightly lower than expected. Economists and retailers are focused Whether consumers will be able to remain as resilient as they have been. Consequently, we expect retailers to remain cautious in the near term. At the same time, we are excited about favorable feedback from retailers regarding our products and brands. Our investments in our brands and innovation as well as our leading shares in many categories are all benefits. Speaker 200:14:53We are in the process of filing our 2024 plan. We expect to provide more details regarding our outlook for next year when we announce our Q4 results. And now I will turn our discussion over to Sally. Speaker 300:15:07Thank you, Greg. Good morning, everybody. I will start with our Q3 2023 results compared to the Q3 of 2022. Net sales increased to $153,600,000 in the Q3 of 2023 compared to $150,800,000 last year due to increased unit volume that was partially offset by lower average sales price. Gross profit for the quarter was $40,100,000 or 26.1 percent of total revenue compared to $34,800,000 or 23.1% in the prior year. Speaker 300:15:45The increase was due to lower product costs and lower distribution and warehousing costs offset by lower average sales price. Selling, general and administrative expenses were relatively flat year over year at $25,600,000 compared to $25,400,000 last year, with increased personnel related expenses offset by a non recurring insurance recovery this year. Operating profit increased significantly to for $4,400,000 for the Q3 of 2023 compared to $9,400,000 last year, reflecting gross profit expansion and relatively flat SG in G and A. Net interest expense decreased by $700,000 to $600,000 for the Q3 of 2023 versus $1,300,000 last year. This decrease reflects significantly lower average debt outstanding, partially offset by with higher interest rates. Speaker 300:16:47Other expense net was flat compared to last year and included currency losses of $400,000 this year. The effective tax rate for the Q3 was 21.6% compared to 22.8% in last year's same period. The lower rate in the Q3 of 2023 was due to a discrete benefit on foreign income in the current year. Net income for the quarter was $10,300,000 or $0.74 per diluted share compared to net income of $5,900,000 or $0.43 per diluted share in last year's Q3. Now turning to our balance sheet and cash flows. Speaker 300:17:30Year to date net cash provided by operating activities increased nearly $109,000,000 to 68,700,000 compared to an outflow of $40,200,000 in the prior year period. Significant improvement was driven by our focus on networking capital improvement. We continue to reduce inventory, which declined more than $84,000,000 versus the prior year period, reflecting our inventory reduction and control actions. Accounts payable was $116,100,000 compared to $111,500,000 last year, primarily due to the timing of purchases. And trade receivables were $102,200,000 compared to $97,800,000 reflecting our higher sales. Speaker 300:18:18We allocated our strong cash flow primarily to reduce debt as well as return value to shareholders through the quarterly dividend and repurchase of stock. At the end of the 3rd quarter, net debt was 49,700,000 compared to $144,500,000 in the same period last year. During the Q3, we paid $1,500,000 in regular cash dividends and repurchased 82,676 shares at prevailing market prices for an aggregate purchase price of $900,000 Capital expenditures were $2,400,000 for the 9 months ended September 30, 2023 and compared to $1,600,000 for the same period last year. This increase primarily related to internal use software development costs. Now turning to our outlook for the full year 2023. Speaker 300:19:12As Greg reported, we expect total revenue to be modestly below for full year 2022. Operating profit is expected to increase compared to 20 22, excluding the $10,000,000 insurance recovery in 2022. Cash flow before financing is expected to increase significantly compared to 2022 as a result of our improvements in net working capital. Our outlook could change if consumer demand and retailer replenishment orders are softer than currently expected. This concludes our prepared remarks. Speaker 300:19:46We will now turn the line back to the operator for Q and A. Operator00:19:51Thank you. We'll take our question from Adam Bradley with AJB Capital. Please go Speaker 400:20:13ahead. Hey, Greg and Sally. How are you? Good morning, Adam. Hey. Speaker 400:20:20So solid quarter, strong profitability through gross margins. So that was great to see and Great to see the free cash flow improving with net working capital. Just a couple of questions. I'll start with 1 or 2 and then get back into the queue. Looking longer term, it's helpful for investors when you share your strategic initiatives. Speaker 400:20:44As you kind of look out over the next, say, 3 years or whatever your outlook is, Where do you see the greatest opportunities for dollar sales growth from your strategic initiatives? Just speaking kind of broadly. Speaker 200:21:01Sure. Thank you, Adam, for the question. And I think what I feel good about is we do have a nice mix of initiatives. They all have high potential. We feel really good about all of them. Speaker 200:21:17And As we've experienced and as folks know that some of those things will grow at different rates than others. So I think right now that If I think about the core business, Hamblobes and Proctercilex, given the fragmentation in the market that has significant upside, It's hard to get that growth, but it has upside. Certainly, the commercial market has Global it's a global business that we're expanding in a number of categories that has strong growth potential. The premium business is a third of the market dollars. And so while this has moved up in our mix as a weight of our mix, We've got a long way to go to get a top share in the premium segment. Speaker 200:22:03And then home health and wellness areas is really all new to us. So it's one of those Positions that we're in that we feel really good that every year we're investing in have high growth potential. They all won't reach their full potential and some of them will take longer than others. But I do feel like The core probably has the highest growth opportunity and then I think sort of followed very closely by The other markets I mentioned, the home health, commercial and premium. Speaker 400:22:34All right. Well, yes, thanks for that. So I'll ask one more follow-up and then I'll get back into the queue. It was a very strong gross margin quarter. In fact, I looked back through historic numbers, I can't find another quarter with 26% gross margin. Speaker 400:22:50So, great job on that for investors. Can you tell us a little bit more about what's driving this? I think you mentioned in the Q and in your release that it's driven by mix. If we overlay that to the strategic initiatives, is it premium? Is it more of a cost Feng, can you just give us a little more color on gross margin? Speaker 400:23:15And to give it more context, Gross margin is the historically for Hamilton Beach has been the single greatest driver of profitability and the one that's most variable. And helping investors understand what really drives that would give us a better line of sight into the company's performance. Speaker 200:23:36Sure. Great. Good question, Adam. Thank you. And that's certainly expanding our gross margin percentage is a big focus of us, So the management here and the initiatives that we're focused on have the potential to do that help us with that goal. Speaker 200:23:53I will say that As costs skyrocketed higher over the past 2 years, particularly last year, we worked very, very hard to pass along those costs. We were not trying to Do anything other than to offset our cost to retailers and consumers, but it is very hard to keep up with And as they've dropped pretty quickly, we have adjusted our prices to be competitive, But also we have not had to pass them all along yet. We also have nice movement in some of our Initiatives some of our premium products and commercial and other areas to play an important role in our gross margin percentage. So I think right now, there's been enough movement up and down that it is difficult to know over the long term how much of that we'll be able to be consistent about? These are very, very strong numbers. Speaker 200:24:50In the past, what we've said is We believe we are confident we can stay in our historical range of gross margin percent and our goal is to move higher than that historical range. So really our biggest focus is let's run our business where we drive top line, we deliver gross margin in or slightly above our historical range And we control our costs and that should drive our profit percentage and dollar expansion pretty nicely. So What I would say is, we'll see how the volatility and the cost structure sells out over the coming quarters. We're going to stay competitive And hold on as much margin as we can, so we'll see how that plays out in the coming year. Speaker 400:25:36All right. Now I'll jump back in the And wait my turn for the next question. Thanks for that. Speaker 200:25:42Great. Thank you, Operator00:25:58And we do have follow-up questions from Adam Bradley with AJB Capital. Speaker 400:26:03All right. So kind of following on that, your I think your press release or the Q talked about Your gross margin being driven in part by savings from warehouse and distribution and I know You guys took on a big project to relocate and now you have a newer and better distribution warehouse system. Can you tell us a little bit about or can you quantify the savings from it at least to start? Like how should investors look at that On a go forward basis and how much of the gross margin capture here was due to warehousing and distribution? Speaker 200:26:45We're not going to break it out specifically, Adam, but just directionally, I will say that, again, with the Pandemic, surgeon in labor, surgeon, gas prices, The whole supply chain went crazy last year as you all know. And so we also do Have moved to a facility that we are very excited about and we continue to work on ways to be more efficient in all aspects of our distribution System. So I think we are improving on the efficiencies of our system compared to the year before and the year before that. The market costs have become more normalized. There's still some pressures in certain areas. Speaker 200:27:30But overall, I think it's I think it is a combination of our new facility, our team getting settled in there and then the market conditions being more favorable as we go forward. So I'd say, to me, the key driver was the change in Product costs and inbound freight costs and an important but lesser influence was the distribution of the outbound costs in terms of the margin change. Speaker 400:28:01Okay. So thanks, Sally. Speaker 300:28:03Go ahead. This is Sally. Hey, the only thing that I'll add to that, right, is You've obviously seen as through our networking capital, the significant reduction in inventory, right? And so from a think about distribution and warehousing, there's a direct If you have less inventory on hand, you have lower warehousing costs, right? And to the point where this time last year or this year, I guess, I would say, we've consolidated warehouses, right? Speaker 300:28:26So we're actively working to keep our inventory levels lower, so we can keep our warehouses So you'll see that as a continued theme going forward too. Speaker 400:28:37All right. So thanks for that color. That gives Investors Speaker 200:28:41like me Speaker 400:28:41a little bit of a better window into performance. So along the lines of net working capital as Follow on to that. So first of all, just tremendous performance in unwinding the net working capital position that had Been built up over time. Historically, your business has been one that assuming normality in supply chain Or at least stability, let's call it now, I don't know, stability. It's a you're a cash generating business due to your kind of asset light nature. Speaker 400:29:15So as we look at your strategic initiatives and your opportunities and now Cash production rather than consumption through networking capital. Can you tell us a little bit more about the capital allocation plan for Hamilton Beach? I know you have laid out dividends and acquisitions, but just kind of your view over the next 3 years of where the best places to build value Are in terms of capital allocation? Speaker 300:29:46Yes. This is Sally again. That's a great question. I think that's Something that we're working through right now as we're thinking through our 2024 plan and our kind of 3 to 5 year strategic plan. I mean, Obviously, we've allocated the cash flow to reduce debt, right? Speaker 300:30:04And we're getting it down to a comfortable level. I think we've talked about 1.5 to 2 times EBITDA, right, is our comfortable debt level. And so as we look out, I think we'll continue to have The viewpoint that we want to allocate free cash flow to our strategic initiatives and opportunistically to M and A where it makes sense. Specifically, which initiatives, I think we're still working through right now, but certainly we want them to be growth drivers. Speaker 400:30:33Yes. And I guess it seems like some of the strategic initiatives are maybe more capital intensive than others. But overall, The M and A space, it's a tough time to sell business and a better time to buy one right now. Can you tell us a little bit more about what you're seeing in the market? And your overall view of acquisitions, are they do you look for more bolt on that you can easily integrate? Speaker 400:30:58Or are you looking if you found something that was big, Would you go after it? Just I know it's tough to be hypothetical, but I think investors want to understand what the thinking is at least And if opportunity is available, how you might respond? Speaker 200:31:18So Adam, on the how opportunities are Presenting themselves are bubbling up. I do think that this environment is putting pressure on those folks that were Not well positioned or overextended or whatever might cause a company to go into Pressure situation. So this is definitely a time when having done the blocking, tackling the important work during the pandemic It puts the company in a better position post pandemic. I feel really good the team here did that. So I do think there will be An increase in opportunities for us to look at. Speaker 200:32:01It has been still relatively quiet, but there's been a little bit of activity on the front of opportunities presenting themselves. But we're going to look at anything and everything that makes sense for us and evaluate it. I'll say, more likely it's going to be a bolt on sort of opportunity, but we have a very sophisticated Board Who views they're really focused on driving long term shareholder value. So there was something that was more a larger Opportunity to combine or buy or do something in the long term, they would definitely look at whatever opportunity presented itself. So In the end, I think I'm assuming we're going to see something here in the coming year to at least evaluate Whether it makes sense for us or not, we'll be really focused on, is it the right price for the opportunity in front of us. Speaker 400:32:58Okay. Well, thank you for that. I think we got I think that answers my question in kind of general terms. So I appreciate it. Speaker 200:33:06Great. Thank you for your questions, Adam. Operator00:33:09Thank you. And there are no further questions at this time. I'd like to turn the call back over to our CEO, Greg any additional or closing remarks. Speaker 200:33:18Thank you. Today, we discussed our commitment to building long term shareholder value, supported by our many competitive advantages and our strategic initiatives. We benefit from our leadership in the small kitchen appliance industry, It has a long history of strong durable demand. Our team is experienced with strong industry, customer and consumer knowledge. We have a strong portfolio of well known trusted brands anchored by our flagship brands Hamilton Beach and Procter Silex. Speaker 200:33:46We are a proven innovator. Our retailer relationships span a broad group of customers in brick and mortar, omnichannel and e commerce channels. We have an asset light global infrastructure. We plan to leverage all of these strengths in 2024 and beyond. That concludes our report for today. Speaker 200:34:03Thank you again for joining our call. Operator00:34:06Thank you. And that does conclude today's presentation. Thank you for your participation and you may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallHamilton Beach Brands Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Hamilton Beach Brands Earnings HeadlinesHamilton Beach Brands Holding Company (NYSE:HBB) Q1 2025 Earnings Call TranscriptMay 3, 2025 | msn.comHamilton Beach Brands Holding Co (HBB) Q1 2025 Earnings Call Highlights: Strong Revenue Growth ...May 1, 2025 | finance.yahoo.comThe Trump Dump is starting; Get out of stocks now?The first 365 days of the Trump presidency… Will be the best time to get rich in American history.May 8, 2025 | Paradigm Press (Ad)Q1 2025 Hamilton Beach Brands Holding Co Earnings Call TranscriptMay 1, 2025 | gurufocus.comHamilton beach brands outlines 2025 initiatives amid tariff challenges and diversification effortsApril 30, 2025 | msn.comHAMILTON BEACH BRANDS HOLDING COMPANY ANNOUNCES FIRST QUARTER 2025 RESULTSApril 30, 2025 | prnewswire.comSee More Hamilton Beach Brands Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Hamilton Beach Brands? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Hamilton Beach Brands and other key companies, straight to your email. Email Address About Hamilton Beach BrandsHamilton Beach Brands (NYSE:HBB) Company, together with its subsidiaries, designs, markets, and distributes small electric household and specialty housewares appliances in the United States and internationally. It offers air fryers, blenders, coffee makers, food processors, indoor electric grills, irons, juicers, mixers, slow cookers, toasters, and toaster ovens. The company also provides consumer products under the Hamilton Beach and Proctor Silex brands; products under the Hamilton Beach Professional in the premium market; farm-to-table and field-to-table food processing equipment under the Weston brand; countertop appliances under the Wolf Gourmet brand; garment care products under the CHI brand; cocktail delivery system under the Bartesian brand; air purifiers under the Clorox and TrueAir brands; and water filtration systems under the Brita brand. In addition, it offers injection care management system under the Hamilton Beach Health brand; and commercial products under the Hamilton Beach Commercial and the Proctor Silex Commercial brands, as well as supplies private label products. The company sells its products through a network of mass merchandisers, e-commerce retailers, national department stores, variety store and drug store chains, specialty home retailers, distributors, restaurants, fast food chains, bars, hotels, and other retail outlets. Hamilton Beach Brands Holding Company was founded in 1904 and is headquartered in Glen Allen, Virginia.View Hamilton Beach Brands ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Disney Stock Jumps on Earnings—Is the Magic Sustainable?Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release? 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There are 5 speakers on the call. Operator00:00:00Day, everyone, and welcome to the Hamilton Beach Brands Holding Company Third Quarter 2023 Earnings Conference Call and Webcast. Today's call is being recorded. And I would now like to turn the conference over to Lou Anne Nabhan, Head of Investor Relations. Please go ahead. Speaker 100:00:14Thank you, Lisa, and good morning, everyone. Welcome to our 3rd Quarter 2023 Earnings Conference Call and Webcast. Yesterday after the market closed, we issued our Q3 2023 earnings release and filed our 10 Q with the SEC. Copies are available on our website. Our speakers today are Greg Trapp, President and Chief Executive Officer and Sally Cunningham, Senior Vice President and Chief Financial Officer. Speaker 100:00:40Joining us for Q and A will be Scott Tidy, Senior Vice President, Global Sales. Our presentation today does include forward looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in either the prepared remarks or during the Q and A. Additional information regarding these risks and uncertainties is available in our earnings release and in the Q4 of 2018. The company disclaims any obligation to update these forward looking Statements, which may not be updated until our next quarterly conference call, if at all. Speaker 100:01:20And now I'll turn the call over to Greg. Speaker 200:01:23Thank you, Lou Anne. Good morning, everyone. Thank you for joining us. I will take the next few minutes to provide an overview of our performance for the Q3 of 2023 and discuss our expectations for the remainder of the year. Then Sally will discuss our financials in more detail. Speaker 200:01:39After that, we will take your questions. We were pleased with our Q3 results. As expected, revenue returned to growth and increased nearly 2% compared to last year's Q3. Our gross profit margin expanded by 300 basis points to 26.1%. Lower average sales price Was offset by lower product costs and lower distribution and warehousing costs. Speaker 200:02:05Operating profit increased 54% to $14,400,000 compared to $9,400,000 in the Q3 of 2022, reflecting the gross margin expansion in flat SG and A. We also continue to deliver significant improvement in net working capital and free cash flow. Sally will discuss the actual results. Regarding our revenue results, in our consumer markets, overall revenue increased approximately 3%. By market, revenue increased in our Latin America and Mexican markets as a result of increased distribution across key retailers. Speaker 200:02:44Revenue decreased in our U. S. And Canadian markets as a result of softer demand in the small kitchen appliance category compared to last year. In our global commercial market, revenue decreased 11%. This decline is attributable to demand normalizing compared to the Q3 of 2022 When revenue grew nearly 36% due to strong post pandemic demand in the foodservice and hospitality industries. Speaker 200:03:11Additionally, the current year sales decline occurred in international markets, while sales in the U. S. Foodservice and Hospitality Industries performed well. As we have discussed in our previous calls this year, for the full year 2023, we expect a solid performance for the soft first half and a stronger second half, which is how the year has unfolded. Our expectations for the stronger second half were based on and an increase in placements and promotions across many of our North American customers. Speaker 200:03:44This year, we're introducing more than 40 new product platforms Across a wide variety of categories. These include products in high demand categories like single serve coffee, personal blenders, Ovens, grills, slow cookers, garment steamers and many others. Our team has done an outstanding job securing placements and promotions for our new products across A broad range of customers and channels. Our new products that are in the marketplace now are selling well overall. We have also gained market share this year that we expect will benefit us in the Q4 and in 2024. Speaker 200:04:20We believe our incremental placements, Planned holiday promotions, new products and increased market share position us well for a solid holiday selling season. I will comment on the small kitchen appliance industry in a moment, but at first I will note we are further encouraged that retail sales overall In the U. S. Have continued to grow year over year and consumer spending has been resilient. At the same time, Economists and retailers have expressed uncertainty regarding continued momentum due to inflation and high interest rates. Speaker 200:04:55Consequently, consumer spending for the small kitchen appliance industry and the overall marketplace remains challenging to predict. There are mixed signals with some data pointing towards solid trends, while others are indicating a potential softening is underway. Small appliance industry sales decreased modestly through September compared to the same period last year, but remained above pre pandemic levels. While we have seen no indication of a significant drop in spending on the small kitchen appliance category in the near future, We do expect it to end the year down slightly. As always, our final results will depend on the sell through at retail and retail replenishment orders. Speaker 200:05:38Given the uncertainty in the macroeconomic environment, we've adopted a slightly more conservative view regarding full year 2023 revenue and have slightly lowered our expectation from flat with 2022 to modestly below 2022. We could end up chasing demand depending on consumer spending, but we want to avoid generating increased levels of excess inventory by being too optimistic. Despite the slightly lower revenue outlook, we continue to expect operating profit to be above last year, excluding the non recurring $10,000,000 insurance Recovery in 2022. I also want to take a few minutes to discuss our longer term view. Since our spin off into an independent public company in 20 17, we have said that we operate our business for the long term. Speaker 200:06:26As a reminder, we have 6 strategic initiatives to drive long term growth. We continue to make progress with these initiatives that are designed to drive revenue growth, expand margin and generate strong cash flow over time. The initiatives are focused on increasing sales of innovative, higher priced, higher margin products in our core North American market. Across our initiatives, we have continued to expand our portfolio of leading trusted brands. We also continue our commitment to consumer driven innovation and launched 250 new product platforms in the last 5 years. Speaker 200:07:03We expect the momentum to continue in 2024. Let me briefly summarize each initiative. First, we want to gain share in the premium market. We have a growing number of Licensed brands in the premium market including Wolf Gourmet and Chi. More recently, we have established new partnerships with Bartesian and Newmilk. Speaker 200:07:23We acquired Westin Brands and created the Hamilton Beach Professional brand. In 2022, sales of our premium brands accounted for 15% of total revenue. We expect premium brand sales to be on track with or ahead of that amount in 2023. Next, we plan to expand in home health and wellness. We launched an initiative to expand our participation in the large and fast growing Home Health and Wellness Market in 2021. Speaker 200:07:52We entered into a trademark licensing agreement with Clorox and launched a new line of premium air purifiers under the Clorox brand in 2022. We entered into a licensing agreement with Brita in 2022. In early 2023, we launched a new category for electric countertop water filtration under the name Brita Hub. This electric count top appliance creates fresh, great tasting water much faster than traditional pitchers. We've also begun to participate in the home medical market where several trends are converging that we believe We can drive strategic opportunities for us. Speaker 200:08:33The aging population in our country is creating a large pool of individuals who are living with and managing Chronic health conditions. Many younger people are doing so as well. There is also a growing shortage of primary care physicians, Nurses and other medical clinicians for these and other reasons, including advances in technology, The healthcare industry is implementing new solutions that enable patients to manage many of their healthcare needs at home. Often these solutions combine a connected medical device and digital communications, which can provide key information to patients or report information back to medical providers. We believe Our company can help both the patients and the medical providers through solutions created under the Hamilton Beach Health banner. Speaker 200:09:23Over the past few years, we've had discussions with many companies in the home medical market about prospective collaborations. A few years ago, we met with a company called HealthBeacon, which is based in Dublin. HealthBeacon is a digital therapeutics company that has created a patent protected FDA cleared system for managing injectable medications, which are used to treat a broad range of chronic conditions in the home. Their system is a connected countertop medical device that combines with a digital support system to help patients manage their adherence to their prescribed treatment. Device also provides for the safe disposal of sharps. Speaker 200:10:02HealthBeacon was seeking a relationship with a company that could help them market and distribute their system in the large U. S. And Canadian markets. In June of 2021, we entered into an exclusive multiyear commercial relationship to do that. March 2022, we introduced the SmartSharp Spin from Hamilton Beach Health powered by HealthBeacon in the U. Speaker 200:10:24S. Healthpeak has an agreement with a major specialty pharmacy company and there is a strong pipeline of prospects. As HealthBeacon prepared to deploy the system to market, they experienced delays. Unfortunately, this has caused HealthBeacon to experience financial pressures and ultimately a cash squeeze. Last Friday, HealthBeacon entered examinership, an Irish statutory framework for restructuring companies in financial difficulty. Speaker 200:10:51Hamilton Beach Brands has entered into a facility agreement with HealthBeacon under which we will make secured loans to HealthBeacon up to a total of €1,850,000 or approximately $2,000,000 to fund its operations during the examinership, which is a period up to 100 days. Due to our existing commercial relationships with HealthBeacon and our knowledge of current and prospective specialty pharmacy orders, We believe HealthBeacon should be able to stabilize and continue to operate. Now let me turn to how we are working to increase our leadership in the global commercial market. We are a leading participant in the global commercial market, serving the foodservice and hospitality industries with small kitchen appliances. We continue to develop products that support our competitive advantage in the core blending and mixing categories and we have expanded into new categories as well. Speaker 200:11:47We continue to increase our relationship with the regional and global chains. In 2022, sales of our commercial products accounted for 10% of our total revenue. Our sales of commercial products increased 50% in 2022 as businesses in the foodservice and hospitality industries engaged And significant post pandemic restocking. While we do not expect that growth rate to continue, we do expect the commercial products As we expand into new markets, we continue to drive the growth of core brands continue to invest in driving the growth of our flagship brands Hamilton Beach and Procter Silex in our core North American market. Hamilton Beach remains the number one unit brand in the U. Speaker 200:12:38S. Our rebranding of Procter Silex as Simply Better has gained traction in the marketplace. We are accelerating our digital transformation for the benefit of all the markets we serve. We continue to make significant investments in our well developed e commerce capability And digital marketing. Through the 1st 9 months of this year, e commerce sales accounted for 36.5% of our total sales, up from 35% in the same period last year. Speaker 200:13:07In addition to organic growth, we plan to also leverage partnerships and acquisitions. We are actively engaged in the pursuit of additional trademark licensing agreements, strategic alliances and acquisitions to drive growth in all of our markets. For all these reasons, we believe we are well positioned to deliver strong results and increase shareholder value in the years to come. Let me conclude by sharing some early thoughts about 2024. Over the past few years, our strong team has managed through an extraordinary operating environment due to a wide variety of factors such as tariffs, pandemic driven historic surge in demand, disruptions across the supply chain and spiking then falling product and container costs. Speaker 200:13:54Early this year, we were still working through the remnants of that environment. At this time, however, Most suppliers have returned to normal lead times and transit times have returned to normal. Our biggest challenge in the short term is understanding the expected retailer and consumer demand. Retailers reduced their on hand inventory levels earlier this year. The point of sale trends are down slightly, but are still above pre pandemic levels. Speaker 200:14:21While our revenue is now increasing over 2022, we continue to receive orders that are slightly lower than expected. Economists and retailers are focused Whether consumers will be able to remain as resilient as they have been. Consequently, we expect retailers to remain cautious in the near term. At the same time, we are excited about favorable feedback from retailers regarding our products and brands. Our investments in our brands and innovation as well as our leading shares in many categories are all benefits. Speaker 200:14:53We are in the process of filing our 2024 plan. We expect to provide more details regarding our outlook for next year when we announce our Q4 results. And now I will turn our discussion over to Sally. Speaker 300:15:07Thank you, Greg. Good morning, everybody. I will start with our Q3 2023 results compared to the Q3 of 2022. Net sales increased to $153,600,000 in the Q3 of 2023 compared to $150,800,000 last year due to increased unit volume that was partially offset by lower average sales price. Gross profit for the quarter was $40,100,000 or 26.1 percent of total revenue compared to $34,800,000 or 23.1% in the prior year. Speaker 300:15:45The increase was due to lower product costs and lower distribution and warehousing costs offset by lower average sales price. Selling, general and administrative expenses were relatively flat year over year at $25,600,000 compared to $25,400,000 last year, with increased personnel related expenses offset by a non recurring insurance recovery this year. Operating profit increased significantly to for $4,400,000 for the Q3 of 2023 compared to $9,400,000 last year, reflecting gross profit expansion and relatively flat SG in G and A. Net interest expense decreased by $700,000 to $600,000 for the Q3 of 2023 versus $1,300,000 last year. This decrease reflects significantly lower average debt outstanding, partially offset by with higher interest rates. Speaker 300:16:47Other expense net was flat compared to last year and included currency losses of $400,000 this year. The effective tax rate for the Q3 was 21.6% compared to 22.8% in last year's same period. The lower rate in the Q3 of 2023 was due to a discrete benefit on foreign income in the current year. Net income for the quarter was $10,300,000 or $0.74 per diluted share compared to net income of $5,900,000 or $0.43 per diluted share in last year's Q3. Now turning to our balance sheet and cash flows. Speaker 300:17:30Year to date net cash provided by operating activities increased nearly $109,000,000 to 68,700,000 compared to an outflow of $40,200,000 in the prior year period. Significant improvement was driven by our focus on networking capital improvement. We continue to reduce inventory, which declined more than $84,000,000 versus the prior year period, reflecting our inventory reduction and control actions. Accounts payable was $116,100,000 compared to $111,500,000 last year, primarily due to the timing of purchases. And trade receivables were $102,200,000 compared to $97,800,000 reflecting our higher sales. Speaker 300:18:18We allocated our strong cash flow primarily to reduce debt as well as return value to shareholders through the quarterly dividend and repurchase of stock. At the end of the 3rd quarter, net debt was 49,700,000 compared to $144,500,000 in the same period last year. During the Q3, we paid $1,500,000 in regular cash dividends and repurchased 82,676 shares at prevailing market prices for an aggregate purchase price of $900,000 Capital expenditures were $2,400,000 for the 9 months ended September 30, 2023 and compared to $1,600,000 for the same period last year. This increase primarily related to internal use software development costs. Now turning to our outlook for the full year 2023. Speaker 300:19:12As Greg reported, we expect total revenue to be modestly below for full year 2022. Operating profit is expected to increase compared to 20 22, excluding the $10,000,000 insurance recovery in 2022. Cash flow before financing is expected to increase significantly compared to 2022 as a result of our improvements in net working capital. Our outlook could change if consumer demand and retailer replenishment orders are softer than currently expected. This concludes our prepared remarks. Speaker 300:19:46We will now turn the line back to the operator for Q and A. Operator00:19:51Thank you. We'll take our question from Adam Bradley with AJB Capital. Please go Speaker 400:20:13ahead. Hey, Greg and Sally. How are you? Good morning, Adam. Hey. Speaker 400:20:20So solid quarter, strong profitability through gross margins. So that was great to see and Great to see the free cash flow improving with net working capital. Just a couple of questions. I'll start with 1 or 2 and then get back into the queue. Looking longer term, it's helpful for investors when you share your strategic initiatives. Speaker 400:20:44As you kind of look out over the next, say, 3 years or whatever your outlook is, Where do you see the greatest opportunities for dollar sales growth from your strategic initiatives? Just speaking kind of broadly. Speaker 200:21:01Sure. Thank you, Adam, for the question. And I think what I feel good about is we do have a nice mix of initiatives. They all have high potential. We feel really good about all of them. Speaker 200:21:17And As we've experienced and as folks know that some of those things will grow at different rates than others. So I think right now that If I think about the core business, Hamblobes and Proctercilex, given the fragmentation in the market that has significant upside, It's hard to get that growth, but it has upside. Certainly, the commercial market has Global it's a global business that we're expanding in a number of categories that has strong growth potential. The premium business is a third of the market dollars. And so while this has moved up in our mix as a weight of our mix, We've got a long way to go to get a top share in the premium segment. Speaker 200:22:03And then home health and wellness areas is really all new to us. So it's one of those Positions that we're in that we feel really good that every year we're investing in have high growth potential. They all won't reach their full potential and some of them will take longer than others. But I do feel like The core probably has the highest growth opportunity and then I think sort of followed very closely by The other markets I mentioned, the home health, commercial and premium. Speaker 400:22:34All right. Well, yes, thanks for that. So I'll ask one more follow-up and then I'll get back into the queue. It was a very strong gross margin quarter. In fact, I looked back through historic numbers, I can't find another quarter with 26% gross margin. Speaker 400:22:50So, great job on that for investors. Can you tell us a little bit more about what's driving this? I think you mentioned in the Q and in your release that it's driven by mix. If we overlay that to the strategic initiatives, is it premium? Is it more of a cost Feng, can you just give us a little more color on gross margin? Speaker 400:23:15And to give it more context, Gross margin is the historically for Hamilton Beach has been the single greatest driver of profitability and the one that's most variable. And helping investors understand what really drives that would give us a better line of sight into the company's performance. Speaker 200:23:36Sure. Great. Good question, Adam. Thank you. And that's certainly expanding our gross margin percentage is a big focus of us, So the management here and the initiatives that we're focused on have the potential to do that help us with that goal. Speaker 200:23:53I will say that As costs skyrocketed higher over the past 2 years, particularly last year, we worked very, very hard to pass along those costs. We were not trying to Do anything other than to offset our cost to retailers and consumers, but it is very hard to keep up with And as they've dropped pretty quickly, we have adjusted our prices to be competitive, But also we have not had to pass them all along yet. We also have nice movement in some of our Initiatives some of our premium products and commercial and other areas to play an important role in our gross margin percentage. So I think right now, there's been enough movement up and down that it is difficult to know over the long term how much of that we'll be able to be consistent about? These are very, very strong numbers. Speaker 200:24:50In the past, what we've said is We believe we are confident we can stay in our historical range of gross margin percent and our goal is to move higher than that historical range. So really our biggest focus is let's run our business where we drive top line, we deliver gross margin in or slightly above our historical range And we control our costs and that should drive our profit percentage and dollar expansion pretty nicely. So What I would say is, we'll see how the volatility and the cost structure sells out over the coming quarters. We're going to stay competitive And hold on as much margin as we can, so we'll see how that plays out in the coming year. Speaker 400:25:36All right. Now I'll jump back in the And wait my turn for the next question. Thanks for that. Speaker 200:25:42Great. Thank you, Operator00:25:58And we do have follow-up questions from Adam Bradley with AJB Capital. Speaker 400:26:03All right. So kind of following on that, your I think your press release or the Q talked about Your gross margin being driven in part by savings from warehouse and distribution and I know You guys took on a big project to relocate and now you have a newer and better distribution warehouse system. Can you tell us a little bit about or can you quantify the savings from it at least to start? Like how should investors look at that On a go forward basis and how much of the gross margin capture here was due to warehousing and distribution? Speaker 200:26:45We're not going to break it out specifically, Adam, but just directionally, I will say that, again, with the Pandemic, surgeon in labor, surgeon, gas prices, The whole supply chain went crazy last year as you all know. And so we also do Have moved to a facility that we are very excited about and we continue to work on ways to be more efficient in all aspects of our distribution System. So I think we are improving on the efficiencies of our system compared to the year before and the year before that. The market costs have become more normalized. There's still some pressures in certain areas. Speaker 200:27:30But overall, I think it's I think it is a combination of our new facility, our team getting settled in there and then the market conditions being more favorable as we go forward. So I'd say, to me, the key driver was the change in Product costs and inbound freight costs and an important but lesser influence was the distribution of the outbound costs in terms of the margin change. Speaker 400:28:01Okay. So thanks, Sally. Speaker 300:28:03Go ahead. This is Sally. Hey, the only thing that I'll add to that, right, is You've obviously seen as through our networking capital, the significant reduction in inventory, right? And so from a think about distribution and warehousing, there's a direct If you have less inventory on hand, you have lower warehousing costs, right? And to the point where this time last year or this year, I guess, I would say, we've consolidated warehouses, right? Speaker 300:28:26So we're actively working to keep our inventory levels lower, so we can keep our warehouses So you'll see that as a continued theme going forward too. Speaker 400:28:37All right. So thanks for that color. That gives Investors Speaker 200:28:41like me Speaker 400:28:41a little bit of a better window into performance. So along the lines of net working capital as Follow on to that. So first of all, just tremendous performance in unwinding the net working capital position that had Been built up over time. Historically, your business has been one that assuming normality in supply chain Or at least stability, let's call it now, I don't know, stability. It's a you're a cash generating business due to your kind of asset light nature. Speaker 400:29:15So as we look at your strategic initiatives and your opportunities and now Cash production rather than consumption through networking capital. Can you tell us a little bit more about the capital allocation plan for Hamilton Beach? I know you have laid out dividends and acquisitions, but just kind of your view over the next 3 years of where the best places to build value Are in terms of capital allocation? Speaker 300:29:46Yes. This is Sally again. That's a great question. I think that's Something that we're working through right now as we're thinking through our 2024 plan and our kind of 3 to 5 year strategic plan. I mean, Obviously, we've allocated the cash flow to reduce debt, right? Speaker 300:30:04And we're getting it down to a comfortable level. I think we've talked about 1.5 to 2 times EBITDA, right, is our comfortable debt level. And so as we look out, I think we'll continue to have The viewpoint that we want to allocate free cash flow to our strategic initiatives and opportunistically to M and A where it makes sense. Specifically, which initiatives, I think we're still working through right now, but certainly we want them to be growth drivers. Speaker 400:30:33Yes. And I guess it seems like some of the strategic initiatives are maybe more capital intensive than others. But overall, The M and A space, it's a tough time to sell business and a better time to buy one right now. Can you tell us a little bit more about what you're seeing in the market? And your overall view of acquisitions, are they do you look for more bolt on that you can easily integrate? Speaker 400:30:58Or are you looking if you found something that was big, Would you go after it? Just I know it's tough to be hypothetical, but I think investors want to understand what the thinking is at least And if opportunity is available, how you might respond? Speaker 200:31:18So Adam, on the how opportunities are Presenting themselves are bubbling up. I do think that this environment is putting pressure on those folks that were Not well positioned or overextended or whatever might cause a company to go into Pressure situation. So this is definitely a time when having done the blocking, tackling the important work during the pandemic It puts the company in a better position post pandemic. I feel really good the team here did that. So I do think there will be An increase in opportunities for us to look at. Speaker 200:32:01It has been still relatively quiet, but there's been a little bit of activity on the front of opportunities presenting themselves. But we're going to look at anything and everything that makes sense for us and evaluate it. I'll say, more likely it's going to be a bolt on sort of opportunity, but we have a very sophisticated Board Who views they're really focused on driving long term shareholder value. So there was something that was more a larger Opportunity to combine or buy or do something in the long term, they would definitely look at whatever opportunity presented itself. So In the end, I think I'm assuming we're going to see something here in the coming year to at least evaluate Whether it makes sense for us or not, we'll be really focused on, is it the right price for the opportunity in front of us. Speaker 400:32:58Okay. Well, thank you for that. I think we got I think that answers my question in kind of general terms. So I appreciate it. Speaker 200:33:06Great. Thank you for your questions, Adam. Operator00:33:09Thank you. And there are no further questions at this time. I'd like to turn the call back over to our CEO, Greg any additional or closing remarks. Speaker 200:33:18Thank you. Today, we discussed our commitment to building long term shareholder value, supported by our many competitive advantages and our strategic initiatives. We benefit from our leadership in the small kitchen appliance industry, It has a long history of strong durable demand. Our team is experienced with strong industry, customer and consumer knowledge. We have a strong portfolio of well known trusted brands anchored by our flagship brands Hamilton Beach and Procter Silex. Speaker 200:33:46We are a proven innovator. Our retailer relationships span a broad group of customers in brick and mortar, omnichannel and e commerce channels. We have an asset light global infrastructure. We plan to leverage all of these strengths in 2024 and beyond. That concludes our report for today. Speaker 200:34:03Thank you again for joining our call. Operator00:34:06Thank you. And that does conclude today's presentation. Thank you for your participation and you may now disconnect.Read morePowered by