Hamilton Beach Brands Holding (HBB) 1 Aug 242024 Q2 Earnings call transcript

Thank you for standing by. I am Augusto, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hamilton Beach Brands Holding Company Q2 Earnings Conference Call and Webcast. [Operator Instructions]. I would now like to turn the call over to Lou Anne Nabhan, Head of Investor Relations. ahead. go Please

with Good we Beach Augusto. on and and to earnings June documents we welcome Yesterday, for Both Form Thank quarter release. our the Second morning, corporate second Quarter our Hamilton ending filed closed, market Brands the XXXX, Call available SEC XXXX the website. our after XX-Q and you, XX, stock everyone, the issued Earnings are Webcast. XXXX Conference quarter

Scott are Tidey, Vice today Trepp, Greg Cunningham, Officer Executive Officer; and speakers Senior President; Our President, and Chief Sally Treasurer. Financial Chief

Our subject prepared from our presentation cause those uncertainties today actual includes risks could either in remarks forward-looking statements. or These statements that materially expressed to during are results the differ to and Q&A.

is statements, earnings our at XX-K not and now our to uncertainties any these Additional December may the available call year be obligation Greg. in if call, which conference release our Form over on information until XXXX. our regarding for forward-looking updated report all. the will XX, annual ended quarterly turn XX-Q risks update company to and these I The disclaims And next and

everyone. Thank joining for good you, morning, Thank us. Lou and Anne, you

that will today financial more I some agenda comments. that, make we Scott After results. is Our Sally will opening questions. your discuss brief in performance our our will detail. review will take

from and quarter done XX% effective second the we remaining strong third strong, delivered $XXX.X We above year, profit to gross increased since quarter a And job our have keeping gross marketplace. year with while very our team we quarter to our our quarter as significant in revenue began improvement of margin. in are record time, every a year-over-year profit last historical deliver competitive an pleased million was range has margin ago. of that second show the a Starting

year, gross was of profit year ago. XX.X% quarter XX% to The a margin second this compared

last from increased profit by driven quarter year the and primarily of in significantly profit $XX our second operating revenue expansion. and Our gross million growth was margin

XXXX inventory debt a progress levels. in achievement excess was significant the reducing corresponding began pandemic-related in Another that to more normalized and

of on focus net have this a all year. As elements working disciplined capital, progress further result of made we our

well of As strength the enter our from about million the results and in this the year our position $XX this for of it excellent XX, deliver and to feel we cash of to we June year of used operating full good shareholders. very year, are second generated business activities return value of as We positioned financial reinvest and believe half to we XXXX.

the Board assumed with this year. pleased him this transition am President I Finally, as progress elected since of role the in position February has that and to seen of the Scott

long-planned to it well. I process Our will turn Scott. And succession over proceeding now is very

are happy I'm the with we financial to Greg. this the that comments you, carried Thank and excellent that we results we pleased year momentum Greg's continued. reiterate have has into achieved

appliance kitchen Our deliver small enabled financial progress which initiatives. that continue by down with to have strategic been been this These initiatives has modestly growth has industry, outperformed continued success us our year. revenue driven has to the

revenue our the in increased heard, you've As by second quarter. XX%

Let impact growth. strong particularly revenue have me initiatives our had the discuss on that a

Beach consumer second quarter, and our products the for brands, market. In driving core of on flagship in core First, growth focus increased our our America XX%. the Hamilton Silex North revenue Proctor the

deep of innovation individual are across several product and that share We and market North to new our outstanding exceptional for overall strong directly attributed development. America categories. culture gained achievements capabilities in are have These

small Our company long of appliance everyday has living category. solutions the a innovative improve history that developing in

can our we or innovation we work We as needs we points, to consumers. and and develop refresh entirely pain hone then that delight consumer products existing Our new continuously products team skill set study tend richer even such with place of placements products retail. insights and/or easier are course, and We revenue consumer keep to products profit, a consumer unique yield proprietary -- to more benefits, longer. generate

Our with is goal, consumer to unique therefore, benefits. maximize innovation

coffee maker, machines offerings and FlexBrew other Our Advanced include in makers, category espresso coffee coffee X-and-X the new our kettles. new product

blenders, of Casadio New stand we In an motorized and appliances mixers and toaster new frost, include well group, and cookers, regular and hand models how juicers. have with roasters of item couldn't our about received heat infuser, specialty air our that fryer toasters, like do personal ovens more them. maker. We grill have our retailers griddles, consumers lineup a and and and new slow number excited including indoor be steering products a

increase is to our share core for growing our further goal Our brands.

significant We will including to core marketing. investing and advantage, development creating our innovation, product new a that to continue critical competitive digital resources in both competencies robust to are

Next, outstanding to another XX%, I the gain share the In market. of will in achievement. premium discuss premium progress sales quarter, second products increased our

in chief market. Our premium in of the to we license. brand brands and brand incredibly products is to is She sales premium our growth this contribution strong market. high-end beauty care make personal The Care continue a Garment one the that significant

for key have garment significant steamer innovation our and great is technology on chief place chief for deploy to benefit We This chief year, in we and new have emphasis a in products. excited garment product rubber Rubber three our introduced new reputation irons conductor, our We outstanding the of featuring steamers. this innovative we're leveraged development products. and brand irons this a technology.

Bartesian a to also brand placements lineup. and be four model original spirit our premium and as maker compared and include We are our exclusive to extending bottles to we year. expect and an This market a price. bottles to new a in Under that year, this cocktail of lower have duet products agreement, significant meaningful [indiscernible] with line come generated at been the two is contributor a incremental our has the sales this features the the premium available premium that performer model multiyear

yet Clorox agreements We've countertop our pleased our model. water Air filtration and a room license electric are Clorox a model largest systems. This Purifiers and our and as extending countertop air cordless Brita with Hub of also as Clorox introduce purifier been steam a well trademark will year, line sanitizer we humidifier. We lines our a premier with for

We to model we a fresh stores. next available team products opportunities additional products. Clorox our and generation is specialty product We're just provide revenue to milk sales on our create variety sites, compact plant-based multiyear newest Numilk of I'll our a our home brand, and The of introduced machine agreement. pursuing filters. also as that become has Brita Hub providing e-commerce stream Brita also the adding certain in year, retail exclusive a earnings. note Numilk, an are consumable appliances This premium part of from

development premium acquisitions. and new to also Professional development, market. Hamilton brands, digital owned perform new brands plan as partnerships and all brands product marketing Weston through Our We innovation adding premium in to our the of to as new with from continue well Bees continue support growth benefit well or the product additional

market. our lead the global the X.X%. initiative from commercial global Next, revenue our second In to commercial strategic quarter, in increased market

small that house. including categories exist worldwide. for on provide of in and that We and heritage are food advantage in the appliances the a categories, a as commercial products create in expansion mixing leading that hospitality provider industries typically into blending our the competitive developing new back We as focus the service well service food products of operations

have Increasing sales products growth drive are on Bartesian and new strategies is outside potential strength with restaurants, the Bartesian edge than commercial continue blenders, large implementing particularly sold U.S. XXX which commercial strong The and bars continued sales important big blender. hospitality hotel more And shops. have to Numilk chains leveraging revenue in rig is finally, of our and marketing. market this Numilk. XX% continue digital our with more in hotels processing partnerships we to year we the strength cruise food countries as than obtained Our launching Summit and such focused successfully the more were is coffee business Building we on build the also products of the from in e-commerce, new focus industry, with our our that with ships, sales a business include in increased focus. are immersion this leveraging in powerful becoming

for provide opportunities expansion and terms optimistic global significant future in of growth about We potential margin to the years. very are commercial in market revenue the

to initiative growth of our accelerate is the Beach Next Hamilton Health.

our While that market have there this business results, we a some new opportunities on technology, excited is and that increase we'd settings. still is opportunities investors points certain to our key for are pursuing Since and financial year treated this began of conditions we about the health highlight. not growth recap medical being the impact wellness driven let me is to accomplishments innovation material of yet staff In this I'd like shortage provides, by having and it been believe and Rapid us, understand. participation XXXX, fast-growing growth we office to to in in a growing market. the large like formally several home

the a an uses an fill as to the through more model support. system Health other the XX/X products faster than These Health outcomes. patient trusted monitoring to to margin of protected identify we and that number called technologies health portfolio. its of a treated a automatically bin increase to combines in countertop significant home. technology of patented services. pharmacies. to patient from and adherence accessibility appreciate adding favorable service the to safe sharps New and changes digitally is In for begins and is existing expanded. conditions health ours. is Once other sold prescribed received a shareholder in and partner which provides using expertise, The firm in new acquired with and outcomes. to leadership patented patients for on technology XXXX, is Sharp manage the sharps. primary a a as and the Plc, as that believe of to used as require solutions resource medication got and engineering, to reminders, returns our it higher be inside attracting chronic subscription-based Hamilton and distribution in app time health brand, is remote decades in pharmacy The Spin improves one created potential an including start over used providers receptible HealthBeacon they at Smart and system the that with Hamilton their HealthBeacon's in Beach conditions our technology device acquisition home plans, and treatments, improving package scaled new to a with care importantly, Hamilton medications, Beach with container people. container health Hamilton of injectable Patients Health. disposals. patients Beach patient care enable We system to provide enable patient -- as care HealthBeacon of innovation, alert that a brand provides connected actively specialty health a management, February providers experience value up, many The that This prepaid device The use trusted relationships. turn or system. leading enable interventions. Most supports the that for developer sent and increasing devices They specialty and new are countertop of the such attractive customer the services HealthBeacon provide the patients tracking capabilities specialty has status participate of has investment our business medical therapeutic the facilitate the pharmacies development Growth number a is drawing that the connected strategic revenue Beach name digital product conditions more are treated customers, We increasing primarily

performance XXXX to and on to business Hamilton rewarding care to exploring collaborations Health Health expected beyond. first enter our is of We're XXXX further is the we team management it Hamilton XXXX in expected also to been in season. see Health expand due holiday half build is accomplish We carried in Beach as Beach positioned the well deliver to into have during HealthBeacon home its reiterate I discussion comments to discussed, to as turn will modest our Beach investments the unfold. to year's the profit over now start-up providing focus solutions. for very so this our Hamilton which upon continue and operating closing, much soon momentum our that expect are health has we to previously XXXX. advanced to year good additional I have In the As excited believe continues business [indiscernible] to Sally. the And we a a planned we year. phase. Greg's contribute

start will second I Scott. XXXX. our compared morning, Good of you, Thank the results with to second everyone. quarter XXXX quarter

placements Total to diluted Operating compared of than that Scott This $XXX,XXX a $XX.X quarter expense added ago. The price are revenue $XXX,XXX a the $XX expected and incremental morning, of on commensurate of and was to partially to quarter in split. or overall basis teams of revenue was favorable growth ago, improvement is per income debt reduction $X and $X.XX higher operating compensation mix. SG&A million million income, profit product HealthBeacon margin well advertising stock As favorable Latin related lower $XXX,XXX the our quarter is interest quarter. a second in expense year or tax a X.X%. compared compared last About revenue attributable ago, $XX.X and our decreases. record noncash consumer our significantly $X in totaled as volume placements gross where of immaterial. discussed. you and market, increased million. or significant Selling, $XXX.X also and compared increase and compared was in to expansion offset business. higher second was gross revenue performance. commercial was the market, second on XX-XX Revenue point to revenue expenses. weakness. profit profit we is Canadian mix, a profit American from HealthBeacon's pleased XX% is attributable to increased profit as More was increased $XX.X per our the in markets, to based in administrative total new new year XX.X% reflected which to increased global Quarter-over-quarter increased general income growth continues some the ago. Also XX% increased this $XX.X revenue a Income change and have which which XX% total XXX a costs In the with heard $XXX,XXX to year's decreased a price new our remainder million product expenses to related by of addition or the year the revenue Net Mexican average was interest market, XXXX. the which included experience is million incentive million net of half in in U.S. share to about our to acquisition, million second operating incremental reflecting margin Revenue year Gross have to levels attributable $X.XX expenses. $XXX,XXX to our strong appreciation expansion. with profit. Net a share, diluted compared of lower This million our

and our to balance turning sheet Now flow. cash

benefited collections $XX to $XX.X focus XXXX in The from Capital XXXX. first on of paid improvements, provided working through period million and value current million led and year XX, quarter For XXXX, cash We activities benefited a June our million and in that million ago. from activity. cash the share cash period by of $X.X expenditures net dividend compared HealthBeacon the flow X second to continued $XX.X the a acquisition million of provided was ended 'XX quarterly significant fund operating We the the prior this current quarter the ago. inventory compared to Net million year reduction shareholders during to return dividends DSO in our the were year of and the $X.X the repurchases. in allocated to months periods. 'XX strong $XX.X excess period provided capital year to

$XX January up XXXX, common X, company's stock million repurchase XX, program Our December and the Class the XXXX. of starting stock purchase has Board outstanding, of ending to A for approved a

X During repurchased authorized market for shares months million XX, $X at price XXX June we purchase million, of aggregate XXXX, the prevailing XXX, ended for $XX prices an repurchase. leaving

on to repurchase total to cash XXXX. in minus million Net or was continue debt XX, quarter. $XX.X and We compared third shares million the debt $XX.X cash equivalents June

facility credit expires XX, revolving June XXXX. Our on

next including liabilities terms, balance status current amounts refinancing the as the facility. market pricing have defined the termination all the our annuity successfully completed In process the plan. funds maturity. that combination purchase and conditions, the payments outstanding third-party cash during we classified investments of will our on in during And transferred is Since arising thoughtful and of the be engaged have group not believe process. and commitments lump-sum it to conservative eligible current and unfavorable sufficient approved of Based U.S. refinancing plan our fund operating cash probable that from termination to which We overfunded refinancing refinanced plan of facility months. on the XXXX, of Benefit sheet. obligations needs the have pension insurance history accordingly, a on that future facility a be the current our settled before time, our obligations of under will will meet the been contract, provide our believe XX benefit operating its that benefit under converted we a Given the through debt, company. and available participants a to will be to we yet hand, flows liquidity Board

reflected quarter within a comprehensive termination of accumulated to be income termination, expect recognized The million the will deferred deferred as loss of finalize loss XX, XXXX. other $X.X the this year. in in We process is the net noncash third Upon charge June income. and as

Planned of surplus years plan importantly, the were other our will used awards. XX, the for plan, thereby from XXXX retirement surplus flow profit-sharing which otherwise existing few may would assets of XXXX. and the purposes, XXX(k) will over assets include We to for cash as $XX.X free these cash employee next that in our which benefits, benefit match been increasing free million use the fund December Plan in have and/or assets to More we company XXXX. the surplus use the

for our modestly to expected is to In below be turn me outlook. XXXX. kitchen Let the retail marketplace appliances XXXX, small

As Scott performance. reported, strategic initiatives revenue with will continue deliver our we expect enable us that to future above-market to progress

increase revenue look XXXX. little the year add XXXX, our As rest to expect year to outlook. towards a profit increase to modestly like of color to I'd to full the full of compared we as operating more we significantly and

profit starting each margin significantly As Greg remarks, profit. 'XX the opening reported operating his gross expanded in of and third we and quarter revenue, mentioned quarter since, in have

focus price cost demand, impact with the continued strategic have As of our favorable and progress management our because and on and of costs normalized initiatives.

move As half growth With of our comparisons results outlook, increase normalized that year to again, the we to into back began in the XXXX, revenue to respect the cycle will of third full quarter we expect begin our modestly. revenue XXXX.

the in placements in revenue created in our rebound level products. the significantly interest half well trends XXXX year-over-year inventory the momentum in of incremental growth second to the to patterns has revenue compared in will X.X%, back reflecting our of than increased rebound growth demand expect compelling retailer into normalized order rate year XXXX. our of half be In the the conservative new to half XXXX, consumer second stronger revenue as early response revenue The X.X% in soft by XXXX carried by in first unfavorable retailer as XXXX. These uncertainty as half decreased when of this we that and the due due management achieved XXXX, of half to to estimated half We these the first comparisons. first of

the reached QX expect Again, profit estimated half growth be stronger the Again, to the profit revenue half operating first million however, as recovery gross the have XXXX, of operating we normalized increase significantly margin by is X% first of compressed significantly compared In I trends and increased the first growth of started the the levels. of nonrecurrence demand than expected these the unfavorable decreased X.X% Operating as half. pricing XXXX, cycle to operating year as that decline in we we due margin rebounded XXXX. second in year cost referenced, expanded half second that to in full of XXXX. profit the for to operating half $XX by the just to profit margin a of growth XXXX. In profit. over Moving and profit insurance

In strategic and us profit expand XX.X%. our our historical enabled to efforts well to with our cost margin initiatives our progress management range above addition, gross

the prepared that profit of expect half We gross concludes of second the XXXX our half XXXX. second in be margin will That remarks. to comparable

the for now back operator Q&A. will We turn the line to

Instructions]. [Operator

to will I We to for pause turn just moment compile the Q&A a Mr. back roster. Trepp. call the

you. Thank

to margins cash today, As are you grow to strong avenues multiple we flow. heard and expand revenue, deliver pursuing continue

the term. committed company shareholder value Our to over increasing long is

year report our again year increase profit XXXX, gross significant expect That for deliver we finishing look margin the very and Thank strong We in operating revenue position. For reflecting to this for forward our a concludes to profit, a call. joining expansion. today. growth our in you

and that Thank today's you call. for concludes Ladies all joining. gentlemen,

You may disconnect. now