Hamilton Beach Brands Holding CoHBB
Hamilton Beach Brands Holding Co Leases Disclosure
Leasing Arrangements
Lessee
At commencement of the Company’s leases, right-of-use assets and corresponding liabilities are recognized based on the present value of future lease payments over the lease term. Some of the Company’s leases, primarily those for real estate assets, may contain both lease and non-lease components. The Company has elected to combine and account for lease and non-lease components as a single lease component. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets and lease expense for these leases are recognized on a straight-line basis over the lease term. The Company’s leases have remaining lease terms of one month to 12 years, some of which include options to extend the leases for up to 5 years. The renewal option is included in the lease term if it is concluded that it is reasonably certain that the Company will exercise that option.
The assets associated with the Company’s leases primarily consist of real estate and equipment. Real estate leases are comprised of warehouses, global headquarters and sales offices. Equipment leases include office and warehouse equipment as well as Company specific tooling used by third-party suppliers in the production process. Payments under these lease arrangements may be fixed or variable.
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost | $ | 7,172 | $ | 8,112 | ||||
| Finance lease cost | ||||||||
| Amortization of leased assets | 74 | 72 | ||||||
| Interest on lease liabilities | 22 | 28 | ||||||
| Finance lease cost | 96 | 100 | ||||||
Variable lease cost (1) | 318,309 | 368,948 | ||||||
Short term lease cost (2) | 46 | 52 | ||||||
| Total lease cost | $ | 325,623 | $ | 377,212 | ||||
(1) Amounts primarily reflect product purchases that are associated with production related tooling.
(2) Leases with an initial term of 12 months or less
The Company recognized a $0.7 million impairment charge in 2024 related to the consolidation of warehouses, which is included within cost of sales in the Consolidated Statements of Operations and relates to the Home and Commercial Products segment. The impairment was measured using a discounted cash flow based on the marketed rate of the warehouse and the time expected to identify a sub-lessor.
The following table presents supplemental cash flow and non-cash information related to leases:
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities – operating cash flows from leases | $ | 8,066 | $ | 8,799 | ||||
| Right-of-use assets obtained in exchange for lease obligations of operating leases – non-cash activity | $ | 3,397 | $ | 2,624 | ||||
| Right-of-use assets obtained in exchange for lease obligations of finance leases – non-cash activity | $ | 6 | $ | 73 | ||||
The following table reconciles the undiscounted future lease payments for operating and finance leases to the lease liabilities recorded in the Consolidated Balance Sheet as of December 31, 2025:
| Undiscounted Future Lease Payments | |||||
| 2026 | $ | 7,530 | |||
| 2027 | 7,079 | ||||
| 2028 | 6,661 | ||||
| 2029 | 6,493 | ||||
| 2030 | 5,791 | ||||
| Thereafter | 16,889 | ||||
| Total lease payments | 50,443 | ||||
| Less: impact of discounting | 8,530 | ||||
| Present value of lease payments | $ | 41,913 | |||
The following table summarizes the weighted-average lease term and discount rate.
| December 31 | ||||||||
| 2025 | 2024 | |||||||
| Weighted average remaining lease term in years - operating leases | 7.3 | 8.3 | ||||||
| Weighted average remaining lease term in years - finance leases | 2.6 | 3.6 | ||||||
Weighted average discount rate - operating leases (1) | 5.2 | % | 5.1 | % | ||||
Weighted average discount rate - finance leases (1) | 7.3 | % | 7.3 | % | ||||
(1) The discount rates used to present value the lease liabilities are based on estimates of the Company’s incremental borrowing rate.
As of December 31, 2025, the Company did not have any additional material operating or finance leases that had not yet commenced.
Lessor
The Company leases connected devices to specialty pharmacy networks and pharmaceutical companies. The lease payments are assessed per unit on a monthly basis. The devices are leased on a month-to-month basis and therefore are short-term leases. These leases are classified as operating leases. There are no options to purchase the device at the end of the term. The devices are classified as property, plant and equipment, net on the Consolidated Balance Sheets. Total lease revenue was $5.7 million and $3.2 million for the years ended December 31, 2025 and 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Mar 6, 2024 | |
| 2022 | Mar 9, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.