Hamilton Beach(HBB) - 2024 Q4 - Annual Report

Revenue and Profitability - Revenue for 2024 was $654.7 million, a 4.6% increase from$ 625.6 million in 2023, primarily driven by increased unit volume and a favorable product mix [140]. - Gross profit margin improved to 26.0% in 2024 from 23.0% in 2023, attributed to lower product and transportation costs [141]. - Net income increased by 21.9% to $30.8 million in 2024, compared to$ 25.2 million in 2023, with an effective tax rate dropping to 7.8% from 20.4% [140][146]. Expenses - Selling, general and administrative expenses rose by $18.3 million to$ 126.7 million, largely due to HealthBeacon expenses and increased employee-related costs [143]. Cash Flow and Liquidity - Cash and cash equivalents increased to $45.6 million in 2024 from$ 15.4 million in 2023, indicating improved liquidity [148]. - Net cash provided by operating activities was $65.4 million in 2024, down from$ 88.6 million in 2023, reflecting a normalization post-pandemic [154]. Debt and Financing - Interest expense decreased significantly by 79.6% to $0.6 million due to lower average borrowings and interest rates [144]. - The HBB Facility was amended to extend the term to December 2029, with a reduced credit facility of$ 125 million and an optional $25 million term loan [157]. - As of December 31, 2024, the excess availability under the HBB Facility was$ 57.3 million, with outstanding borrowings of $50.0 million [158]. - As of December 31, 2024, the weighted average interest rate applicable to the HBB Facility was 2.50% [160]. - The HBB Facility requires a fee of 0.20% per annum on the unused commitment [160]. - Total contractual cash obligations amount to$ 354,514,000, with $249,329,000 due in 2025 [165]. - A 0.25% increase in the Base Rate would increase estimated total annual interest payments on the HBB Facility by approximately$ 600,000 [165]. - HBB does not expect to make voluntary repayments under the HBB Facility in the next twelve months [163]. - HBB maintains compliance with all applicable financial covenants in the HBB Facility as of December 31, 2024 [162]. Financial Instruments - The fair value of interest rate swap agreements was a receivable of $4.0 million as of December 31, 2024 [174]. - A hypothetical 10% relative decrease in interest rates would decrease the fair value of interest rate swap agreements by$ 200,000 [174]. - The fair value of foreign currency exchange contracts was a net receivable of $800,000 as of December 31, 2024 [177]. - Assuming a hypothetical 10% weakening of the U.S. dollar, the fair value of foreign currency-sensitive financial instruments would decrease by$ 1.2 million [177]. Acquisition Impact - The acquisition of HealthBeacon contributed $4.3 million in revenue for 2024, adding a new revenue stream [140].