Q1 2024 Hamilton Beach Brands Holding Co Earnings Call
Dee: Thank you for standing by. My name is Dee, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hamilton Beach Brands Holding Company first quarter 2024 earnings call and webcast. All lines have been placed on mute to prevent any background noise.
Thank you for standing by my name is D and I will be your conference operator today at this time I would like to welcome everyone to the Hamilton Beach brands holding company first quarter 2024 earnings call and webcast. All lines have been placed in mute to prevent any background noise. After the speakers' remarks, there will be a question and.
Dee: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Lou Ann Nabhan, Head of Investor Relations. Please go ahead.
Dee: I was just action if you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star. One again. Thank you I would now like to turn the call over at Zillow, One <unk> head of Investor Relations. Please go ahead.
Speaker Change: Thank you D and good morning, everyone welcome to our first quarter 'twenty 'twenty four earnings conference call and webcast yesterday. After the stock market closed we filed with the SEC our Form 10-Q for the quarter ending March 31, 'twenty 'twenty four and we issued our first quarter 2024 earnings release.
Lou Anne Nabhan: Thank you, Dee, and good morning, everyone. Yesterday, after the stock market closed, we filed with the SEC our Form 10-Q for the quarter ending March 31, 2024, and we issued our first quarter 2024 earnings release. Copies of both documents are available on our corporate website.
Speaker Change: Copies of both documents are available on our corporate website.
Lou Anne Nabhan: Our speakers today are Greg Trepp, Chief Executive Officer, Scott Tidey, President, and Sally Cunningham, Senior Vice President, Chief Financial Officer, and Treasurer. Our presentation today includes 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&A. Additional information regarding these risks and uncertainties is available in our 10-Q, our earnings release, and our annual report on Form 10-K for the year ended December 31, 2023. 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. Now, I will turn the call over to Greg.
Speaker Change: Our speakers today are Greg Trepp, Chief Executive Officer.
Lou Anne Nabhan: Got tidy, President and Sally Cunningham, Senior Vice President Chief Financial Officer and Treasurer.
Lou Anne Nabhan: Our presentation today includes 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&A additional information regarding these risks and uncertainties is available in our 10-Q.
Lou Anne Nabhan: Our earnings release, and our annual report on Form 10-K for the year ended December 31st 2023.
Lou Anne Nabhan: 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 and now I will turn the call over to Greg.
Gregory H. Trepp: Thank you, Lou Anne. Good morning, everyone.
Gregory H. Trepp: Hello, and good morning, everyone. Thank you for joining us.
Gregory H. Trepp: Thank you for joining us. Our agenda today is that I will make some opening comments. Scott will report on our strategic initiatives. And Sally will discuss our first quarter financial results. After that, we will take your questions.
Gregory H. Trepp: Our agenda today, you said I will make some opening comments Scott will report on our strategic initiatives Sally.
Gregory H. Trepp: Sally will discuss our first quarter financial results after that we will take your questions.
Gregory H. Trepp: We were pleased with our first quarter results, which were in line with our expectations. We are off to a solid start in 2024 after we delivered a strong performance in the second half of 2023 and built momentum that carried into this year. We are affirming our outlook for the full year 2024, and we believe there could be upside if consumer spending and retail sales continue to be as strong as they have been. While Sally will discuss our first quarter financial results in detail, I would like to make a few high-level comments.
Gregory H. Trepp: We were pleased with our first quarter results, which were in line with our expectations.
Gregory H. Trepp: We were off to a solid start in 2024. After we delivered a strong performance in the second half of 2023 and built momentum that carried into this year.
Gregory H. Trepp: We are affirming our outlook for the full year 2024, and we believe there could be upside if consumer spending and retail sales continue to be as strong as they have been.
Gregory H. Trepp: Well Sally will discuss our first quarter financial results in detail I would like to make a few high level comments.
Gregory H. Trepp: As we have reported, on February 2nd of this year, our Hamilton Beach Health subsidiary acquired a company called HealthBeacon, which is a medical technology company and a strategic partner of ours since 2021. Our first quarter includes two months of HealthBeacon results. We are very excited about this acquisition. Let me provide some brief context regarding our enthusiasm.
Gregory H. Trepp: As we have reported on February 2nd of this year, we're able to reach health subsidiary acquired a company called Health Beacon.
Gregory H. Trepp: Which is a medical technology company and a strategic partner of ours is 2021.
Gregory H. Trepp: Our first quarter includes two months of <unk> results.
Gregory H. Trepp: We are very excited about this acquisition. So let me provide some brief context regarding our enthusiasm three years ago, we determined that's a large and fast growing home health and wellness market.
Gregory H. Trepp: Three years ago, we determined that the large and fast-growing home health and wellness market was an attractive opportunity for our company. We took particular note of our emerging growth categories for home health care management; forming a partnership with HealthBeacon was our first venture into that space. HealthBeacon needed a partner to help it gain visibility and distribution in the U.S. market for its pioneering product. The partners worked together to launch a health care solution that enables patients to effectively manage at-home chronic conditions that require the use of injectable medication. The U.S. The system is sold principally through specialty pharmacies. These healthcare providers appreciate that our system supports patient adherence to their prescribed treatments, which in turn improves health outcomes. The revenue model is subscription-based.
Gregory H. Trepp: It's an attractive opportunity for our company.
Gregory H. Trepp: We took particular note of our emerging growth categories for home health care management.
Gregory H. Trepp: A partnership with help Beacon was our first venture into that space.
Gregory H. Trepp: Hell speak and needed a partner to help it gained visibility in distribution in the U S market for its pioneering product.
Gregory H. Trepp: We worked together to launch a health care solution.
Gregory H. Trepp: <unk> patients to effectively manage at home chronic conditions that require the use of injectable medications.
Gregory H. Trepp: The U S. The system is sold principally through specialty pharmacies.
Gregory H. Trepp: These health care providers appreciate that our system supports patient adherence to their prescribed treatments, which in turn improves health outcomes.
Gregory H. Trepp: New model subscription based.
Gregory H. Trepp: When HealthBeacon became available for purchase, we saw the opportunity to invest in a business that we believe has great potential to increase shareholder value over time. We are working to scale and expand the business. As we discussed in our last earnings call in March, our Hamilton Beach Health business, which includes HealthBeacon, is expected to have a modest operating loss in 2024 due to planned investments in the business, and as HealthBeacon continues in the startup phase. Hamilton Beach Health is expected to contribute to operating profit in 2025 and beyond. In the first quarter, HealthBeacon had $600,000 in revenue and $1.1 million in operating losses.
Gregory H. Trepp: When healthy can became available for purchase we saw the opportunity to invest in our business that we believe has great potential to increase shareholder value over time, we are working to scale and expand the business.
Gregory H. Trepp: As we discussed in our last earnings call in March Our Hamilton Beach Health business, which includes health Beacon is expected to have a modest operating loss in 'twenty 'twenty four due to planned investments in the business.
Gregory H. Trepp: It does help speaking continues in the startup phase.
Gregory H. Trepp: Well to beach health is expected to contribute to operating profit in 2025 and beyond.
Gregory H. Trepp: In the first quarter health, because it has $600000 in revenue and $1 1 million in operating loss.
Gregory H. Trepp: In addition, we incurred transaction costs of approximately $1 million, which were included in our SG&A expenses and which will not recur. While our new revenue stream from HealthBeacon is small now, we expect it to increase steadily as this year unfolds and then more rapidly in future years. Looking at our total company results, revenue was flat compared to the same period last year, which was favorable compared to overall softness in the small kitchen appliance industry.
Gregory H. Trepp: In addition, we incurred transaction costs of approximately $1 million, which were included in our SG&A expenses, and which will not recur.
Gregory H. Trepp: While our new revenue stream from healthy can is small now we expect it to increase steadily as this year unfolds and then more rapidly in future years.
Gregory H. Trepp: Looking at our total company results revenue was flat to the same period last year, which was favorable compared to overall softness in the small kitchen appliance industry.
Gregory H. Trepp: Our gross profit margin increased significantly compared to a year ago as our team did an effective job keeping our gross margin strong while remaining competitive in the marketplace. SG&A was higher than a year ago. The increase was driven in part by the inclusion of HealthBeacons expenses and the transaction costs I mentioned. The other primary driver was an increase in employee-related costs, including higher non-cash stock incentive compensation, which was related to the increase in our stock price. The operating loss for the company as a whole was $900,000, a significant improvement compared to a loss of $1 million a year ago.
Gregory H. Trepp: Our gross profit margin increased significantly compared to a year ago as our team has done an effective job keeping our gross margin is strong while remaining competitive in the marketplace.
Gregory H. Trepp: SG&A was higher than a year ago.
Gregory H. Trepp: The increase was driven in part by the inclusion of health because expenses and the transaction costs I mentioned.
Gregory H. Trepp: The other primary driver was an increase in employee related costs, including higher noncash stock incentive compensation, which was related to the increase in our stock price.
Gregory H. Trepp: Operating loss for the company as a whole was $900000 a significant improvement compared to a loss of five $1 million a year ago. The.
Gregory H. Trepp: The improvement primarily reflected our gross profit margin expansion. Including the health beacon results that I mentioned, as well as a non-cash lease impairment related to the consolidation of warehouses, operating profit was $1.9 million, or a $7 million improvement compared to the first quarter of 2023, which underscores the underlying strength of our core Hamilton Beach Brands business. Also, in the first quarter, we continued to deliver improvement in our networking capital position. Cash from operations was nearly $20 million, and we further reduced net debt.
Gregory H. Trepp: The improvement primarily reflected our gross profit margin expansion.
Gregory H. Trepp: Excluding the health Beacon results that I mentioned as well as a noncash lease impairment related to the consolidation of warehouses operating profit was $1 $9 million or $7 million or a $7 million improvement compared to the first quarter of 2023, which underscores the underlying strength of our core Hamilton Beach brands.
Gregory H. Trepp: Business.
Gregory H. Trepp: Also in the first quarter, we continued to deliver improvement in our net working capital position cash.
Gregory H. Trepp: Cash from operations was nearly $20 million and we further reduce net debt.
Gregory H. Trepp: Before I turn the call over to Scott, let me say that we are very excited to have him in his new role as president of the company. As we've announced, our Board of Directors appointed Scott to his position on February 19th of this year. Scott's appointment is part of a long-standing succession plan, and he brings to his role more than 30 years of leadership experience with the company. Most recently, Scott was Senior Vice President, Global Sales, with oversight of all of our retail and commercial sales worldwide.
Speaker Change: Before I turn the call over to Scott, Let me say that we are very excited to have him in his new role as president of the company.
Gregory H. Trepp: As we've announced our board of directors appointed Scott to his position effective February 19th of this year.
Gregory H. Trepp: <unk> appointment is part of a long standing succession plan. He brings to his role more than 30 years of leadership experience with the company.
Gregory H. Trepp: Most recently, Scott with senior Vice President Global sales with oversight of all of our retail and commercial sales worldwide.
Gregory H. Trepp: While Scott's main responsibilities over the years have been in sales and marketing, he has been involved in most aspects of our business, including partnerships, sourcing, supply chain, engineering, quality, and more. He has been instrumental in the development and successful execution of our strategic initiatives to expand, diversify, and grow our business. In addition to Scott being the right person for the job of president, the time was right for Scott to be elevated to this role.
Gregory H. Trepp: Well Scott's main responsibilities over the years have been in sales and marketing. He has been involved in most aspects of our business, including partnerships sourcing supply chain engineering quality and more.
Gregory H. Trepp: He has been instrumental in the development and successful execution of our strategic initiatives to expand diversify and grow our business.
Gregory H. Trepp: In addition to Scott being the right person for the job of President at the time was right for Scott to be elevated to this role.
Gregory H. Trepp: Our company is on very solid footing and well positioned for future success. Over the past several years, even during challenging times, we have invested team and company resources in innovation, new product development, and our six strategic initiatives. Our team has always been laser focused on keeping our pipeline of freshened and all new products flowing. As a result, we have been able to build our business across a wide range of categories and a broad group of retail and commercial customers. The number of incremental placements that we secured last year and this year will benefit us throughout 2024. We look for Hamilton Beach Health to add further momentum over time.
Gregory H. Trepp: Our company is on very solid footing and well positioned for future success.
Gregory H. Trepp: Over the past several years, even during challenging times, we have invested team and company resources and innovation, new product development and our six strategic initiatives.
Gregory H. Trepp: Our team has always been laser focused on keeping our pipeline of freshened and all new products flowing.
Gregory H. Trepp: As a result, we have been able to build our business across a wide range of categories and a broad group of retail and commercial customers.
Gregory H. Trepp: A number of incremental placements that we secured last year and this year will benefit us throughout 'twenty 'twenty four we look for Hamilton Beach health to add further momentum over time.
Gregory H. Trepp: Presently, Scott and I are engaged in a thoughtful and smooth transition of the duties of President while I continue in my role as CEO. A significant recent accomplishment was organizational changes in the leadership of our sales and marketing team. These changes were also part of a longstanding succession plan. We had experienced leaders in place, ready to move up and assume broader responsibilities, enabling us to provide continuity of outstanding leadership for our sales and marketing team.
Gregory H. Trepp: Personally Scott and I are engaged in a thoughtful and smooth transition to the duties of president.
Gregory H. Trepp: I continue in my role as CEO.
Gregory H. Trepp: The significant recent accomplishment was organizational changes in the leadership of our sales and marketing teams. These.
Gregory H. Trepp: These changes were also part of a long standing succession plan.
Gregory H. Trepp: We've experienced senior leaders, we had experienced leaders in place ready to move up and assume broader responsibilities, enabling us to provide continuity of outstanding leadership for our sales and marketing teams with these changes in place.
Gregory H. Trepp: With these changes in place, Scott is starting to turn his attention to all aspects of our operation. Our company is fortunate to have an extraordinary team in place at all levels, starting with our functional leaders who serve on our executive committee. Combined with Scott's depth of experience, we are well-positioned to pursue our growth strategies and build long-term shareholder value. Now, I will turn the call over to Scott.
Gregory H. Trepp: Got it started to turn his attention to all aspects of our operations.
Scott: Our company is fortunate to have an extraordinary team in place at all levels, starting with our functional leaders who serve on our executive Committee.
Gregory H. Trepp: Combined with Scott steps of experience, we are well positioned to pursue our growth strategies and build long term shareholder value now I will turn the call over to Scott.
Scott: Thank you Greg I appreciate your comments good morning, everyone.
Scott Tidey: Thank you, Greg. I appreciate your comments. Good morning, everyone.
Scott Tidey: It is a great honor to be appointed president of our company. I am delighted to have the opportunity to collaborate with our outstanding global team to build on the successes we have achieved. The promotions and our sales and marketing groups that Greg mentioned were important steps. It was very gratifying to see senior leaders with whom I have worked for years assume greater responsibility. Aaron Israel, who has been with the company since 2000 and who has been serving as Senior Vice President of Strategy and Marketing, now also has oversight of our global commercial business. Wayne Albrecht, who joined the company in 2003 and has been serving as Vice President, North America, is now Senior Vice President, Global Consumer Sales. Aaron and Wayne are both very strong leaders.
Scott Tidey: It's a great honor to be appointed President of our company I'm delighted to have the opportunity to collaborate with our outstanding global team to build on the successes, we have achieved the promotions and our sales and marketing groups that Greg mentioned were important steps. It was very gratifying to see senior leaders with whom I have worked with for years assume greater responsibility.
Scott Tidey: Aaron Israel, who has been with the company since 2000, and who has been serving as senior Vice President of strategy and marketing now also has oversight of our global commercial business waned Albrecht who joined the company in 2003 and has been serving as vice President North.
Scott Tidey: It is now senior Vice President Global consumer sales, Karen and Wayne are both very strong leaders I have the utmost confidence in their ability to quickly settle into their new roles and do a fantastic job for us.
Scott Tidey: I have the utmost confidence in their ability to quickly settle into their new roles and do a fantastic job for us. I, too, was pleased with our first quarter performance and getting 2004 off to a good start. Our results reflected the progress of our six strategic initiatives. Our initiatives are designed to enable us to increase revenue, margins, and cash flow over time and build value for all of our stakeholders. Let me briefly discuss each of our strategic initiatives, what they are, our plans for growth, and how each initiative is performing.
Scott Tidey: I too was pleased with our first quarter performance and getting 2000 people were off to a good start.
Scott Tidey: So its reflected progress of our six strategic initiatives. Our initiatives are designed to enable us lease revenue margins and cash flow.
Scott Tidey: Over time and build value for all of our stakeholders let.
Scott Tidey: Let me briefly discuss each of our strategic initiatives what they are the plans for growth and how each initiative is performing.
Scott Tidey: I will first continue the discussion Greg began with respect to strategic initiatives to accelerate the growth of our new Hamilton Beach Health business. We are very excited to have become a participant in the home health care management business. Rapid growth is being driven by technology, innovation, and a growing shortage of medical staff that formerly treated certain conditions in office settings. These solutions improve accessibility to health care services for many people. They enable providers to identify changes in a patient's status and facilitate faster interventions.
Speaker Change: I will first continue the discussion Greg began with respect to strategic initiative to accelerate the growth of our new Hamilton Beach Health business.
Scott Tidey: We were very excited to have become a participant in the home health care management business.
Scott Tidey: <unk> growth is being driven by technology innovation and a growing shortage of medical staff that formerly treated certain conditions and office settings.
Scott Tidey: These solutions improve accessibility to health care services for many people they enable providers to identify changes in the patient status and facilitate faster innovate interventions. Most importantly, they enable patients to participate more actively in their health care journeys, leading to more favorable outcomes are.
Scott Tidey: Most importantly, they enable patients to participate more actively in their healthcare journeys, leading to more favorable outcomes. Our strategy is to combine our strengths, including our trusted brand name and our leadership in innovative product development. Engineering, Sourcing, Marketing, Sales, and Distribution with partner companies that have strengths in areas such as digital capabilities and patented technology. HealthBeacon brings a number of these strengths, including strong specialty pharmacy relationships, along with the know-how, software, patents, and intellectual property that are needed to support the system we provide to patients who are managing chronic disease.
Scott Tidey: Strategy is to combine our strengths, including our trusted brand name and our leadership and innovative product development engineering sourcing marketing sales and distribution with partner companies that have strengths in areas such as digital cable build capabilities and patented technologies.
Scott Tidey: Beacon brings a number of these strengths, including strong specialty pharmacy relationships, along with the know how software patents and IP that are needed to support the system. We provide the patients for managing chronic diseases. The primary system. We currently provide is called the smart sharp spend from Hamilton Beach L patients receive.
Scott Tidey: The primary system we currently provide is called the Smart Sharp Spin from Hamilton Beach Health. Patients receive a countertop device that we help design, source, and distribute. This device is connected to an app that uses patented technology to provide medication reminders, tracking, and 24-7 patient support. The countertop device has a protected container inside that serves as a receptacle for used sharps.
Scott Tidey: The countertop device that we helped design source and distribute.
Scott Tidey: This device is connected to an app that uses patented technology to provide medication reminders tracking and 24 seven patient support.
Scott Tidey: The countertop device is a protected container inside that serves as a receptacle for use sharps once the thing and then begins to fill up technology provides an alert for a new one to be sent automatically and the patient returns the container with a use sharps prepaid package for safety.
Scott Tidey: Once the bin begins to fill up, technology provides an alert for a new one to be sent automatically, and the patient returns the container with the used sharps in a prepaid package for safe disposal. While we've been working with the Tel Aviv team for the past three years, we are further integrating our team and resources. And that process is going very well. We are optimistic about expanding this business over time. We are working with existing specialty pharmacy customers to add patients to the roster of subscribers who use our system. We are also working to secure business relationships with additional specialty pharmacies. In addition, we are working to add new treatments to the program, thereby increasing the number of chronic conditions that are managed using our system.
Scott Tidey: Well, we've been working with <unk> team for the past three years, we are further integrating our team and resources and that process is going very well we are optimistic about expanding this business over time, we're working with existing specialty pharmacy customers to add patients to the roster of subscribers who use our system. We're also working to <unk>.
Scott Tidey: Cured businesses business with additional specialty pharmacies.
Scott Tidey: There, we're working to add new treatments to the program, thereby increasing the number of chronic conditions that are managed using our system.
Scott Tidey: We see the acquisition of HealthBeacon as the first step in increasing our participation in the home healthcare management business. We are in discussions with other prospective partners, particularly ones with unique technological capabilities, who could significantly benefit from collaborating with partners like us in our broad commercialization. Next, I will discuss our strategic initiative. Coor, Hamilton Beach, and Proctor Selleck's brands.
Scott Tidey: We see the acquisition of <unk> is the first step in increasing our participation in the home health care management business. We are in discussions with other prospective partners.
Scott Tidey: Particularly ones with unique technological capabilities, who could significantly benefit from collaborating with partners like us with our broad commercial leases.
Scott Tidey: Next I will discuss our strategic initiatives.
Scott Tidey: For Hamilton Beach, and Proctor Silex brands.
Scott Tidey: Our two core brands have served the needs of consumers for over 100 years. These two brands are known for quality, durability, and innovation. We participate in more than 50 categories.
Scott Tidey: Our two core brands that serve the needs of consumers for over 100 years. These two brands are known for quality durability and innovation.
Scott Tidey: We participate in more than 50 categories in the U S. Hamilton Beach is the number one selling brand based on units sold and the small clients in garment care industry.
Scott Tidey: In the U.S., Hamilton Beach is the number one selling brand based on units sold in the small appliance and garment care industry. And the e-commerce channel, Hamilton Beach and Procter Sellex, both have 4.4 average star ratings and favorable reviews. In recent years, we've rebranded Proctosolix as Simply Better.
Scott Tidey: And the E Commerce Channel Hamilton Beach, and Proctor Silex, both have four four average star ratings and favorable reviews and.
Scott Tidey: In recent years, we rebranded practice Alex is simply better. This product line is targeted to consumers, who deserve attractive who desire attractive, but practical practical product design and essential functionality without a lot of options and extras at the accessible.
Scott Tidey: This product line is targeted to consumers who desire attractive but practical product design and essential functionality without a lot of options and extras at an accessible price. In the first quarter of this year, unit volume for our core consumer brands increased 9.5%, and dollar sales were up nearly 2% compared to a year ago. This followed an impressive performance in 2003 when sales of these brands were flat in 2022, outperforming the industry by more than 5%.
Scott Tidey: In the first quarter. This year unit volume for our core consumer brands increased nine 5% in dollar sales were nearly 2% or nearly were up nearly 2% compared to a year ago. This followed an impressive performance in 2003 when sales of these brands were flat with 2020 to outperforming the industry.
Scott Tidey: By more than five.
Scott Tidey: But the industry has more than 5% decline.
Scott Tidey: Our goal for the Hamilton Beach and ProctorSolids brands is to further increase our growing share. We devote significant resources to investing in our core competencies that are critical to creating a competitive advantage and driving share. These include innovation, new product development, and digital marketing.
Scott Tidey: Our goal for the Hamilton Beach, and Proctor Silex brands is to further increase our growing share we devote significant resources to investing in our core competencies that are critical to creating a competitive advantage and driving share. These include innovation, new product development and digital marketing.
Scott Tidey: We refresh existing products and develop new ones based on consumer-driven research. Let me mention a few of the new product innovations we are launching this year. We have further evolved our popular line of flex-brew coffee makers. We pioneered the concept of a multi-use machine that brews a single cup or a carafe of coffee. Our latest model provides a faster brewing time. It can make hot or iced coffee using either pods or ground coffee. It is programmable and provides a removable reservoir that fits on the side or the back to enhance counter space.
Scott Tidey: We refresh existing products and develop new ones based on consumer driven research. Let me mentioned a few of the new product innovations we are launching this year.
Scott Tidey: We have further evolved our popular line of flex brew coffee makers, we pioneered the concept of a multi use machine that Bruce a single cup or a carafe of coffee. Our latest model provides a faster brewing time, it can make hot or iced coffee using either parts or ground coffee. It is programmable and provides a removable <unk>.
Scott Tidey: <unk> that fits on the side or the back two enhanced counter space. We expect this new line to be a strong contributor as we have already we already have broad support from major retailers.
Scott Tidey: We expect this new line to be a strong contributor, as we already have broad support from major retailers. Also, in the coffee category, we have added several new espresso machines, increasing our participation in a category that is fast growing. In the slow cooker category, we have answered the consumer's desire to start recipes using frozen foods, with new models that defrost first and then cook, saving cooks a lot of time.
Scott Tidey: Also in the coffee category, we have added several new espresso machines, increasing our participation in the category that is fast growing.
Scott Tidey: And a slow cooker category, we have answered the consumers' desire to start recipes using frozen foods with new models to Defrost first and then cook saving cooks a lot of time.
Scott Tidey: We have also further developed our extensive line of air fry toaster ovens, regular and personal blenders, and hand and stand mixers, all of which are particularly good sellers for us. Next, I'll discuss our progress in gaining share in the premium market. The premium part of the small appliance market accounts for more than 40% of the total industry dollars. We have been increasing our participation in the premium market by developing, licensing, and acquiring new brands. Our own premium brands include Westin and Hamilton Beach Professional. We license the brands for Qi Premium Garment Care Products, Clorox True HEPA Air Purifiers, and Brita Hub Countertop Electric Water Filtration Appliances.
Scott Tidey: We are also further evolved our extensive line of air Fry Toaster ovens regular and personal blenders and hand, and stand mixers, all of which are particularly good sellers for us.
Scott Tidey: Next I will discuss our progress to gain share in the premium market. The premium part of small appliance market accounts for more than 40% of the total industry dollars.
Scott Tidey: We have been increasing our participation in the premium market by developing licensing and acquiring new brands our own premium brands include Western and Hamilton Beach professional we license the brands for cheap premium garment care products Clorox true Hepa Air Purifiers, and Britta hub countertop electric water filtration appliances.
Scott Tidey: Yes.
Scott Tidey: We have an exclusive multi-year agreement to design, sell, market, and distribute Artesian premium cocktail delivery machines. In March of last year, we announced a similar agreement with a company by the name of New Milk to provide the next generation of specialty appliances to create a variety of fresh plant-based milk products in the home and in commercial establishments. The New Milk Home Machine is available for purchase on NewMilk.com and will soon be available on Amazon.
Scott Tidey: We have an exclusive multi year agreement to design sell and market and distribute artesian premium cocktail delivery machines in March of last year, We announced a similar agreement with the company by the name of the new milk to provide the next generation of specialty appliances to create a variety of fresh plant based milk products in the home.
Scott Tidey: And in commercial establishments.
Scott Tidey: VAALCO machines available for purchase on new milk Dot com and will soon be available on Amazon.
Scott Tidey: Yeah.
Scott Tidey: We are incredibly pleased with the sales of our Qi Garment Care product. We recently introduced three new irons and a garment steamer featuring Cheese Lava technology, which they use in their curling and hairstyling irons. Lava is a great heat conductor, and we're excited to deploy this innovative technology in our product.
Scott Tidey: We are incredibly pleased with the sales of our Chi garment care products. We recently introduced three new irons and a garment steamer featuring cheese, LABA technology, which they use in their curling and hair styling irons.
Scott Tidey: Rob has a great heat conductor and we're excited to deploy this innovative technology and our products based on several new placements. We have secured we look for <unk> to be a meaningful contributor to our sales of premium products. This year.
Scott Tidey: Based on several new placements we have secured, we look for Qi to be a meaningful contributor to our sales of premium products this year. We are experiencing great momentum and significant point of sales gains with our line of Clorox air purifiers. We also plan to launch a Clorox humidifier this summer.
Scott Tidey: We are experiencing great momentum and significant point of sales gains with our line of Clorox Air Purifiers. We also plan to launch at Clorox Humidifier. This summer. We believe we are well positioned to drive our clorox brand business going forward.
Scott Tidey: We believe we are well positioned to drive our Clorox brand business going forward. In 2023, the premium market accounted for 15% of our total revenue. Last year, while sales of premium products overall decreased compared to 22, they increased 10% in the fourth quarter. Sales were down in the first quarter of this year, which we attribute to seasonality following our strong holiday selling period and, to a certain extent, the impact of inflationary pressures on consumer spending.
Scott Tidey: In 2023, the premium market accounted for 15% of our total revenue last year, while sales of premium products overall decreased compared to 22, they increased 10% in the fourth quarter sales.
Scott Tidey: Sales were down in the first quarter of this year, which we attribute to seasonality following a strong holiday selling period and to a certain extent the impact of inflationary pressures on consumer spending.
Scott Tidey: We remain confident in the opportunity to increase our partnership in the premium market and its potential to contribute to our revenue growth and margin expansion over time. Our growth plans include leveraging our current stable of brands, New Product Development, Digital Marketing, and Adding New Brands Through Additional Partnerships and Acquisitions. Next, I will discuss our strategic initiative to develop a leadership position in the global commercial market. This market has been up and down over the past few years due to the significant unfavorable impact of the pandemic.
Scott Tidey: We remain confident in the opportunity to increase our partnership in the premium market and its potential to contribute to our revenue growth and margin expansion over time.
Scott Tidey: Our growth plans include leveraging our current stable of brands, new product development digital marketing and adding new brands through additional partnerships and acquisitions.
Scott Tidey: Next I will discuss our strategic initiative to develop a leadership position in the global commercial market.
Scott Tidey: It has been up and down over the past few years due to the significant unfavorable impact of the pandemic.
Scott Tidey: In 2023, our revenue from commercial products decreased 15% compared to 2022, when revenue grew 50% and reached the highest level in our history. This extraordinary growth was driven by a rebound in demand in the food service and hospitality industries, following demand softness during the pandemic, when many restaurants and hotels were closed. In 2023, sales of our commercial products accounted for 8% of our total revenue. We are working hard to exceed our all-time high over the next few years.
Scott Tidey: In 2000 2023, our revenue from commercial products decreased 15% compared to 2022, when revenue grew 50% and reached the highest level in our history. This extraordinary growth was driven by a rebound in demand in the foodservice and hospitality industries falling demand softness during the pandemic when many restaurant.
Scott Tidey: And hotels were closed.
Scott Tidey: 2023 sales of our commercial products accounted for 8% of our total revenue.
Scott Tidey: We are working hard to exceed our all time high over the next few years, we were pleased to see the sales of our commercial products increased slightly in the first quarter of this year compared to a year.
Scott Tidey: We were pleased to see the sales of our commercial products increase slightly in the first quarter of this year compared to the year before. For this market, we provide commercial-grade countertop equipment to the food, service, and hospitality industries worldwide. Food service customers include traditional and fast food restaurants, as well as bars and cocktail lounges. For the hospitality industry, we provide small appliances to be used as room amenities and in breakfast bars. Geographically, we've prioritized North America, Europe, and Asia.
Scott Tidey: For this market, we provide commercial grade countertop equipment to the food service and hospitality industries worldwide.
Scott Tidey: Foodservice customers include traditional and fast food restaurants, as well as bars and cocktail lounges for the hospitality industry, we provide small appliances to be used as room amenities and and in breakfast bars geographically, we prioritize North America, Europe and Asia.
Scott Tidey: We currently do business with many of the leading food service and hotel chains. We are working to expand our business with existing customers and add new chains to our customer base. More recently, we have identified new opportunities with convenience stores and cruise lines. In food service, which is a more developed business for us, our core strength, going back many decades, has been the mixing and blending category. This year, we launched a new blender called the Summit Edge. It is powerful, providing excellent performance for ingredients that are difficult to blend. It is quiet and easy to use.
Scott Tidey: We currently do business with many of the leading foodservice and hotel chains, we are working to expand our business with existing customers and add new change to our current cost to our customer base more recently, we have identified new opportunities with convenience stores and cruise lines.
Scott Tidey: In foodservice, which is a more developed business for us our core strength going back for many decades has been the mixing and blending categories. This year, we have launched a new blender called the summit edge. It is powerful providing excellent performance for ingredients that are difficult to blend it is quiet and easy to use our company is known.
Scott Tidey: Our company is known for our high-quality blenders. We believe the Summit Edge is our best blender yet. This product is shipping into several chains now and has received favorable reviews from customers across the globe. In recent years, we've been expanding into the back of the house with several new food processing products, including our line of Big Rig immersion blenders, rice cookers, and salmon. Some of the partners I mentioned in the discussion of the premium consumer products also have applications in our commercial.
Scott Tidey: For our high quality Blenders, we believe the summit edge is our best blunder yet this product is shifting into several changed now and has received favorable reviews from customers across the globe.
Scott Tidey: In recent years, we've been expanding into the back of the house with several new food processing products, including our line of Big rig immersion blenders Rice cookers.
Speaker Change: Damn mixers.
Scott Tidey: Some of the partners I mentioned in the premium.
Scott Tidey: And the discussion of the premium consumer products also have application in our commercial business. For example, we have <unk> created a commercial grade version of the artesian cocktail maker and the new milk plant based milk maker. The partition professional cocktail machine is selling well with both foodservice and hospitality customers.
Scott Tidey: For example, we have created a commercial grade version of the Bartesian cocktail maker and the new Milk plant-based milk maker. The Bartesian professional cocktail machine is selling well with both food service and hospitality customers. New Milk, the new Milk commercial machine, will become available later this year and has garnered particularly strong interest from coffee shops.
Scott Tidey: The new mill commercial machine will become available later this year and has garnered particularly strong interest from coffee shops.
Scott Tidey: We remain extremely optimistic about the potential for the global commercial market to provide significant opportunities for us in terms of revenue growth and margin expansion in the coming years. Next, I will discuss our initiative to accelerate our digital transformation. The e-commerce channel represents a strong and growing part of our business. Brand reputation, product features, innovation, and star ratings all play a critical role in driving online sales. These are all areas where we excel.
Scott Tidey: We remain extremely optimistic about the potential for the global commercial.
Scott Tidey: To provide significant opportunities for us in terms of revenue growth and margin expansion in the future years.
Scott Tidey: Next I will discuss our initiatives to accelerate our digital transformation.
Scott Tidey: The E Commerce channel represents a strong and growing part of our business brand reputation product features innovation and star ratings all play a critical role in driving online sales. These all are areas, where we excel we are investing in gaining share in the E Commerce channel in North America for retail products and <unk>.
Scott Tidey: We are investing in and gaining share in the e-commerce channel in North America for retail products and globally for commercial products. This includes investing in marketing tools to drive online visibility and sell-through for our brands and products, as well as implementing best practices for content, advertising, and fulfillment strategies. And in 2023, our total e-commerce sales, which includes both consumer and commercial products, represented 39% of our total revenue. The e-commerce channel is developed in the U.S. and Canada.
Scott Tidey: Globally for commercial products. This includes investing in marketing tools to drive online visibility and sell through for our brands and products as well as implementing best practices for content advertising and fulfillment strategies.
Scott Tidey: And in 2022 and 2023, our total E Commerce sales, which includes both consumer and commercial products represented 39% of our total revenue. The E. Commerce channel has developed in the U S and Canada. The E Commerce is becoming increasingly important to the sales of commercial products.
Scott Tidey: E-commerce is becoming increasingly important to the sales of commercial products, but they're still insignificant compared to the consumer product. If we consider only the sales of our U.S. consumer products, e-commerce sales in 2023 represented 48% of our total revenue. Our brands earned star ratings of 4.3 or better, and four of our brands earned 4.5 stars or better. Our products receive favorable reviews from customers, experts, and influencers. Our high-star rating is a result of our commitment to designing and engineering consumer-preferred products and implementing leading quality control standards.
Scott Tidey: But theres still insignificant compared to the consumer products.
Scott Tidey: If we consider only the sales of our U S consumer products E Commerce sales in 2023 represented 48% of our total revenue.
Scott Tidey: Our brands earn star ratings of $4, three or better and four of our brands earned four five stars or better.
Scott Tidey: Products receive favorable reviews from customers experts and Influencers High Star ratings are result of our commitment to designing and engineering consumer preferred products and implementing leading quality control standards given.
Scott Tidey: Given the role the internet plays in influencing consumers' brand preferences and purchasing decisions, we are committed to allocating significant resources to growing online sales and market share. Finally, I will discuss our strategic initiative to leverage partnerships and acquisitions. Identifying and securing businesses with a strategic fit to our portfolio is an important aspect of our growth strategy. We are actively engaged in the pursuit of additional trademark license agreements, strategic alliances, and acquisitions to drive growth in the market.
Scott Tidey: Given the role of the Internet plays in influencing consumers brand performed preferences and purchasing decisions. We are committed to allocating significant resources to growing online sales and share.
Scott Tidey: Finally, I will discuss our strategic initiative to leverage partnerships and acquisitions.
Scott Tidey: Unifying and securing businesses with a strategic fit to our portfolio is an important aspect of our growth strategy. We are actively engaged in the pursuit of additional trademark license agreements strategic alliances and the acquisitions to drive growth and and acquisitions to drive growth in our markets as.
Scott Tidey: As we have previously reported, our acquisitions include Weston and Health Beacon. Additionally, we have entered into several exclusive agreements with outstanding business partners that combine our strengths with advantages provided by other companies. As a result, we have entered new, large, and fast-growing markets and, in some cases, created new categories. Many of our collaborations serve both retail and commercial customers. In closing, it has been rewarding to see our team accomplish so much over the past few years.
Scott Tidey: As we have previously reported our acquisitions include Western and health Beacon, we've entered into several exclusive agreements with outstanding business partners that combine our strengths with advantages provided by other companies. As a result, we have entered new large and fast growing markets and in some cases created new categories. Many of our collab.
Scott Tidey: <unk> serve both retail and commercial customers.
Scott Tidey: In closing it has been rewarding to see our team accomplished so much over the past few years, we are well positioned for success over the long term, we expect to benefit from the many strengths which include our good thinking culture, our leadership in the small kitchen appliance industry, our portfolio of leading trusted brands are proven customer driven innovation.
Scott Tidey: We are well positioned for success over the long term. We expect to benefit from our many strengths, which include our good thinking culture, our leadership in the small kitchen appliance industry, our portfolio of leading trusted brands, our proven customer-driven innovation capabilities, and our strong relationships with all leading retailers. We are encouraged that consumer spending for small kitchen appliances remains resilient. We believe we are well positioned to build upon the momentum we carried into 2024 and deliver a solid performance for the year. Now, I will turn our discussion over to Sally.
Sally: Abilities, and our strong relationships with all leading retailers.
Sally: We're encouraged that consumer spending for the small kitchen appliances remains resilient and we believe we are well positioned to build upon the momentum we carried into 2024 and deliver solid performance for the year.
Scott Tidey: And now I will turn our discussion over to Sally.
Sally M. Cunningham: Thank you, Scott. Good morning, everyone.
Sally: Thank you Scott and good morning, everyone I will start with our first quarter 2024 results compared to the first quarter of 2023.
Sally M. Cunningham: I will start with our first quarter 2024 results compared to the first quarter of 2023. As you have heard this morning, we were pleased with our results, and they are in line with our expectations. Total revenue was $128.3 million, flat with last year's first quarter. However, revenue overall benefited from an 8% increase in unit volume and a favorable product mix. These benefits were offset by decreased selling prices versus a year ago. In our consumer market, revenue increased in our Mexican and Latin American markets, where our teams have added incremental placements and new business; revenue decreased in our U.S. and Canadian markets.
Sally: <unk> heard this morning, we were pleased with our results and they are in line with our expectations.
Sally M. Cunningham: Total revenue was $128 3 million flat to last year's first quarter.
Sally M. Cunningham: Revenue overall benefited from an 8% increase in unit volume and a favorable product mix.
Sally M. Cunningham: These benefits were offset by decreased selling prices versus <unk> versus a year ago.
Sally M. Cunningham: And our consumer market revenue increased and our Mexican and Latin American market, where our teams have added incremental placements and new business.
Sally M. Cunningham: <unk> decreased in our U S and Canadian markets.
Sally M. Cunningham: For the U.S. market, volume increased 5.7%, and we expect improvement in our U.S. market this year as the year unfolds and as we benefit from incremental placement. The market in Canada is experiencing some overall weakness that may continue for a while.
Sally M. Cunningham: For the U S market volume increased five 7% and we expect improvement in our U S market. This year this year as the year unfolds and as we benefit from incremental placement.
Sally M. Cunningham: The market in Canada is experiencing some overall weakness that may continue for a while.
Sally M. Cunningham: Our global commercial market revenue increased slightly in the first quarter, and we look for this business to enjoy a strong year. Also included in the first quarter was new revenue from our acquisition of HealthBeacon, which was immaterial. Our gross profit margin expanded by 710 basis points, reflecting lower product costs and a favorable mix, partially offset by the impact of a $700,000 non-cash lease impairment related to the consolidation of warehouses. Gross profit totaled $30.1 million, or 23.4% of total revenue, compared to $20.9 million, or 16.3% in the prior year.
Sally M. Cunningham: Our global commercial market revenue increased slightly in the first quarter and we look for this business to enjoy a strong year.
Sally M. Cunningham: Also included in the first quarter was new revenue from our acquisition of health Beacon, which was immaterial.
Sally M. Cunningham: Our gross profit margin.
Sally M. Cunningham: <unk> expanded by 710 basis points, reflecting lower product costs, and a favorable mix, partially offset by the impact of a seven.
Sally M. Cunningham: $100000 noncash leases.
Sally M. Cunningham: Related to the consolidation of warehouses.
Sally M. Cunningham: Gross profit totaled $30 1 million or 23, 4% of total revenue.
Sally M. Cunningham: Compared to $20 9 million or 16, 3% in the prior year.
Sally M. Cunningham: Selling, general, and administrative expenses increased to $30.9 million compared to $25.9 million in the first quarter of 2023. Approximately one half of the increase was driven by the inclusion of Health Beacon's SG&A expenses, along with associated M&A expenses. The other half of the increase was primarily due to higher employee-related expenses, including non-cash stock incentive compensation due to stock price appreciation.
Sally M. Cunningham: Selling general and administrative expenses increased to $30 9 million compared to $25 9 million in the first quarter of 2023.
Sally M. Cunningham: Approximately one half of the increase was driven by the inclusion of <unk> SG&A expenses.
Sally M. Cunningham: Along with associated M&A expense.
Sally M. Cunningham: The other half of the increase was primarily due to higher employee related expenses, including noncash stock incentive compensation due to stock price appreciation.
Sally M. Cunningham: Yeah.
Sally M. Cunningham: Operating loss was $0.9 million compared to an operating loss of $5.1 million a year ago. Included in the current quarter operating loss was Health Beacon's operating loss of $1.1 million, Health Beacon transaction costs of $1.0 million, and the non-cash lease impairment of $0.7 million. Net interest expense decreased by $1.1 million compared to a year ago. For the first quarter of 2024, interest expense was $200,000 versus $1.3 million. This decrease primarily reflects lower average borrowings outstanding under a revolving credit facility.
Sally M. Cunningham: Operating loss was <unk> 9 million compared to an operating loss of $5 1 million a year ago.
Sally M. Cunningham: Included in the current quarter operating loss was <unk> <unk> operating loss of $1 1 billion.
Sally M. Cunningham: I'll speak and transaction cost of $1 1 million and the noncash lease impairment of zero point $7 million.
Sally M. Cunningham: Net interest expense decreased by $1 1 million compared to a year ago.
Sally M. Cunningham: First quarter 2024 interest expense was 200000 versus $1 3 million.
Sally M. Cunningham: This decrease primarily reflects lower average borrowings outstanding under our revolving credit facility.
Sally M. Cunningham: The income tax benefit was $100,000 compared to a benefit of $1.6 million a year ago, consistent with the change in the operating. The net loss was $1.2 million, or $0.08 per diluted share, a significant improvement compared to a net loss of $4.8 million, or $0.34 per diluted share a year ago. Now turning to our balance sheet and cash flow. In 2023, we delivered a significant improvement in our networking capital and cash flow and ended the year with the highest level of cash from operating activities in our company's history.
Sally M. Cunningham: Income tax benefit was 100000 compared to a benefit of $1 6 million a year ago.
Sally M. Cunningham: Mr. It with the change in operating loss.
Sally M. Cunningham: Net loss was $1 2 million or <unk> <unk> per diluted share.
Sally M. Cunningham: <unk> improvement compared to a net loss of $4 8 million or <unk> 34 per diluted share a year ago.
Sally M. Cunningham: Now turning to our balance sheet and cash flows.
Sally M. Cunningham: In 2023, we delivered significant improvement in our net working capital and cash flow and ended the year with the highest level of cash from operating activities in our company's history.
Sally M. Cunningham: This achievement was due to our focus on networking capital improvement as we work through the remnants of the 2022 Global Supply Chain Challenges. We have now returned to more normalized positions for working capital and cash flow generation. Net cash provided by operating activities in the first quarter of 2024 was $19.7 million compared to $34.9 million provided for the same period last year. The decrease was primarily due to the timing of incentive compensation payments for the first quarter of 2024 that were paid in the second quarter of 2023. In addition, networking capital provided cash of $33.5 million compared to cash provided of $39.9 million in the last year's first quarter. With respect to investing activities, capital expenditures were $900,000 compared to $500,000 a year ago.
Sally M. Cunningham: This achievement was due to our focus on networking capital improvement as they work through the remnants of the 2022 global supply chain challenges.
Sally M. Cunningham: We have now returned to more normalized position for working capital and cash flow generation.
Sally M. Cunningham: Net cash provided by operating activities in the first quarter of 2024 was $19 7 million compared to $34 9 million provided for the same period last year.
Sally M. Cunningham: The decrease was primarily due to the timing of incentive compensation payments. During the first quarter of 2024 that were paid in the second quarter of 2023.
Sally M. Cunningham: In addition, net working capital provided cash of $33 5 million compared to cash provided of $39 9 million in last year's first quarter.
Sally M. Cunningham: With respect to investing activities capital expenditures were 900000 compared to 500000 a year ago.
Sally M. Cunningham: We invested $7.5 million in the acquisition of HealthBeacon using cash on hand. However, this amount was partially offset by the repayment of a secured loan we provided to HealthBeacon during their examinership, decreasing our net investment to $5.8 million. We allocated our strong cash flow primarily to reduce net debt and return value to shareholders through the quarterly dividend, which paid a total of $1.5 million. On March 31st, 2024, net debt, or debt minus cash and cash equivalents, was $23.7 million compared to $77.1 million on March 31st, 2023.
Sally M. Cunningham: We invested $7 5 million and the acquisition of health begin using cash on hand.
Sally M. Cunningham: That was partially offset by the repayment of a secured loan we provided to help beacon during their examinership process decreasing our net investment to $5 8 million.
Sally M. Cunningham: Okay.
Sally M. Cunningham: We allocated our strong cash flow primarily to reduce net debt and return value to shareholders through the quarterly dividend, which paid a total of $1 5 million.
Sally M. Cunningham: On March 31, 2024, net debt our debt minus cash and cash equivalent was $23 7 million compared to $77 1 million on March 31 2023.
Sally M. Cunningham: In November 2023, our board approved a stock repurchase program for the purchase of up to $25 million of the company's Class A common stock outstanding as of January 1, 2024 and ending on December 31, 2025. There were no share repurchases during the three months ended March 31, 2024, leaving the full $25 million authorized for repurchase.
Sally M. Cunningham: In November 2023, our board approved a stock repurchase program for the purchase of up to $25 million of the company's class a common stock outstanding as of January one 2024, and ending on December 31 2025.
Sally M. Cunningham: There were no share repurchases during the three months ended March 31 2024, leaving.
Sally M. Cunningham: Leaving the full 25 million authorized for repurchase.
Sally M. Cunningham: Now turning to our outlook, we are affirming our expectations for the full year 2024. The retail marketplace for small kitchen appliances is expected to be modestly below 2023 and still higher than pre-pandemic sales levels. We believe that progress with our strategic initiatives will enable us to deliver above-market revenue performance just as we did last year. For the full year 2024, we expect our total revenue to increase modestly compared to the full year 2023.
Sally M. Cunningham: Now turning to our outlook we are.
Sally M. Cunningham: Affirming our expectations for the full year 2024.
Sally M. Cunningham: The retail marketplace for small kitchen appliances is expected to be modestly below 2023, and still higher than pre pandemic sales level.
Sally M. Cunningham: We believe that progress with our strategic initiatives will enable us to deliver above market revenue performance just as we did last year.
Sally M. Cunningham: For the full year 2024, we expect our total revenue to increase modestly compared to full year 2023.
Sally M. Cunningham: As Greg said, we believe there could be an upside to our revenue results, depending on consumer spending and retail sales remaining as strong as they have been so far this year. Operating profit for the full year 2024 is expected to increase moderately compared to 2023 based on the expansion of the gross profit margin. Our outlook includes our previously reported expectation that Hamilton Beach Health will have a modest operating loss in 2024. That concludes our prepared remarks. We will now turn the line back to the operator for Q&A. Thank you.
Sally M. Cunningham: As Greg said, we believe there could be an upside to our revenue results, depending on consumer spending and retail sales remaining as strong as they have been so far this year.
Sally M. Cunningham: Operating profit for the full year 2024 is expected to increase moderately compared to 2023 based on the expansion of gross profit margin.
Sally M. Cunningham: Our outlook includes our previous previously reported expectations. The Hamilton Beach Health will have a modest operating loss in 2024.
Sally M. Cunningham: That concludes our prepared remarks, we will now turn the line back to the operator for Q&A.
Dee: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question or listen via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking questions.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in I would like to ask a question. Please press star one and our California <unk> raise your hand in China Q. If you would like to withdraw your question simply press Star. One again, if you are called upon to answer. Your question you are listening via loud speaker on your device. Please.
Dee: Pick up a handset and ensure that your phone is not been yet when asking questions.
Dee: Again, it is star 1 to ask a question. Again, to those who would like to ask questions, you may press star 1 on your telephone and wait for a name to be announced. If there are no questions at this time, I would now like to turn the conference back to Greg Trepp for closing remarks.
Dee: And if I want to ask a question.
Dee: Okay.
Dee: Yeah.
Gregory H. Trepp: Against those who would like to ask question you May Press Star one on your telephone and wait for any goodbye announce.
Dee: Okay.
Dee: Okay.
Dee: Okay.
Gregory H. Trepp: There are no no question at this time I would now like to turn the conference back to Greg.
Gregory H. Trepp: For closing remarks.
Gregory H. Trepp: Thank you. Today we welcome Scott on our call as our new company president. We are excited about the many opportunities we believe we have to increase revenue, expand margins, and deliver strong cash flow over the long term. We have 2024 off to a good start and will continue to build on that momentum as we carry into this year as the upside potential to our current outlook.
Gregory H. Trepp: Thank you today, we welcome Scotts participation on our call is our new company President.
Gregory H. Trepp: We are excited about the many opportunities. We believe we have to increase revenue expand margins and deliver strong cash flow over the long term.
Gregory H. Trepp: <unk> 2024 off to a good start and we'll continue to build on that momentum that we carried into this year as the upside potential to our current outlook that concludes our report for today. Thank you again for joining our call.
Dee: That concludes our report for today. Thank you again for joining us. Ladies and gentlemen, that concludes today's call. Thank you all for joining us.
Dee: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Outro Music
Dee: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Dee: Okay.
Dee: [music].