US foodservice equipment manufacturer Hamilton Beach Brands Holding Group has released its first quarter and preliminary second quarter results.
This comes ahead of a full Q2 report which it expects to reveal in mid-August.
The company said that Q1 results for 2020 saw a 4.6% total revenue decrease compared to 2019, but noted that this was during the beginning of the coronavirus pandemic.
This figure was also skewed by its international figures, as the report noted that the US and Canada consumer market remained steady.
Operating profit increased modestly despite a decrease in revenue driven by cost management programs, the company said.
Q2 2020 total revenue is expected to increase approximately 5.5% compared to $131.1 million in Q2 2019, driven by strong demand for small kitchen appliances.
Operating profit is expected to be in the range of $10.5 million to $11.0 million compared to $3.2 million in Q2 2019.
Furthermore, net debt at June 30, 2020 decreased from $80.5 million to $40.2 million.
Meanwhile, the company revealed that it discovered certain accounting irregularities at its Mexico subsidiaries during the first quarter.
The company’s Audit Review Committee commenced an internal investigation with the assistance of outside counsel and other third party experts.
As a result of the investigation, the company concluded that certain former employees of one of the Mexico subsidiaries engaged in unauthorized transactions with the company’s Mexico subsidiaries that resulted in expenditures being deferred on the balance sheet beyond the period for which the costs pertained.
Consequently, the company recorded non-cash write-offs in its historical consolidated financial statements and restated its financial statements for the years ended December 31, 2019, 2018 and 2017 and each of the quarters during the years ended December 31, 2019 and 2018.
The company said it had filed an amended annual report on Form 10-K/A for the year ended December 31, 2019 with the Securities and Exchange Commission.
The latest financial update comes after a difficult couple of years for the company. Last year it closed all 160 of its stores to focus on the Hamilton Beach Brands side of its business.
Finally, Hamilton Beach Holdings reported that it had completed the dissolution of its Kitchen Collection stores on April 3.
The retail operation’s net losses and negative cash flow are no longer impacting the company.
Read more below about the company’s decision to close all 160 of its stores last year: