Good day, everyone. My name is Kelly, and I'll be your conference operator for today. At this time, I'd like to welcome everyone to the Hamilton Beach Brands Holding Company Third Quarter 2022 Earnings Call. Today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star one on your telephone keypad. If you need to withdraw your question, you may also press star one again. At this time, I'd like to turn the conference over to Ms. Lou Anne Nabhan, Head of Investor Relations. Please go ahead, ma'am. Thank you, Kellyanne, and good morning, everyone. Welcome to our third quarter 2022 earnings conference call and webcast. Yesterday, after the market closed, we issued our earnings release and filed our 10-Q with the SEC. This information is available on our website. Our speakers today are Greg Trepp, President and Chief Executive Officer, and Michelle Mosier, Senior Vice President and Chief Financial Officer. Scott Tidey, Senior Vice President, Consumer Sales and Marketing, will participate in our Q&A. Our remarks today, including answers to questions, may contain forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed today. Information regarding these risks and uncertainties is available in our earnings release, 10-Q, and our annual report on Form 10-K for the year ended December 31st, 2021. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly conference call, if at all. Now I'll turn the call over to Greg. Thank you, Lou Anne. Good morning, everyone. Thank you for joining us. We're going to take the next few minutes to discuss our third quarter results, along with our outlook for the remainder of 2022. Our team continued to execute well in a challenging retail environment. We were pleased to deliver a 26% increase in operating profit as a result of gross profit margin expansion and lower SG&A. Gross profit margin expanded by 190 basis points, reflecting price increases that offset higher costs, a favorable product mix, and lower expenses for outside warehousing and labor compared to the prior year. Total revenue declined modestly as continued strength in our global commercial market partially offset lower sales in our consumer markets. Global commercial sales increased 36%, reflecting continued recovery in the food service and hospitality industries, as well as the sale of new products, which I will discuss in a moment. While consumer demand in the U.S. continues a trend of being down somewhat compared to 2021, it remains solid and continues to be up significantly compared to pre-pandemic levels. The revenue decrease in consumer markets in the third quarter was primarily due to many retailers remaining cautious in continuing their broad inventory rebalancing programs that began earlier this year. While our products have not been in an overstock position at retail, the broad rebalancing contributed to a shift in timing for some holiday orders for us, and in some cases, a reduction to pre-holiday build order quantities compared to historic levels. Holiday timing month-to-month can always be difficult to predict. We expect to capture some of the delayed orders in the fourth quarter. There was a slight softening on a sale movement in the third quarter, but that was only a small contributor. We expected sales in the Latin American market to be lower than last year as we comped very strong sales in 2021. We also expected that last year's revenue in China and Brazil would not repeat because we have changed our business to a licensing model in those markets, effective at the end of last year. In the third quarter, the amount attributable to this change was $1.9 million, and for the first nine months, it was $5.9 million. We continue to make progress with our strategic initiatives. These initiatives are ongoing programs that have helped us stay strong over the past several years. They are designed to increase revenue, expand operating margin, and generate strong cash flow over time. Our initiatives are focused on increasing sales in the e-commerce channel, leading in the global commercial market, gaining share in the premium market, expanding in the home, health, and wellness market, and driving growth of our core brands, Hamilton Beach and Proctor Silex. In the third quarter, e-commerce revenue increased 8% and accounted for 35% of our total. Brand reputation, product features, innovation, and star ratings all play a critical role in driving online sales, and these are all in areas where we excel. We are also investing in digital marketing and online selling capabilities as we work to accelerate our digital transformation. Our global commercial revenue in the third quarter increased 36%. This is partly due to strong post-pandemic demand. It is also due to our success in expanding our category coverage. Examples of new commercial products that are gaining traction include our MixStation, which makes milkshake treats, high-performance blenders, and our new Big Rig line of immersion blenders that we have introduced as part of our strategy to expand into back-of-the-house categories. We have secured incremental wins as we increase our focus on meeting the needs of global and regional chains. Revenue from our premium brands grew 35%. Growth was particularly strong for the extremely popular Bartesian cocktail machine, our CHI garment care products, and our line of Weston products. We have introduced a number of new premium products for the holiday selling season. These include new models in our Bartesian line, a CHI full-size handheld steamer, a Weston 2-in-1 indoor smoker slow cooker, and several new products in our Hamilton Beach Professional line. Our newest Wolf Gourmet product, an electric kettle introduced earlier this year, is selling very well. Revenue from our new home health and wellness products increased nearly 30% from a very small base as we just introduced new products into this market. We are pleased with the consumer reception to our new Clorox brand air purifiers. We're also creating a new category with a countertop Clorox steam sanitizer that consumers can use to kill bacteria on brushes, sponges, and other cleaning tools that still have a useful life. We look forward to introducing the first electric countertop water filtration products under the Brita brand in early 2023. In the home medical market, the injection care management system that we market and distribute under an exclusive agreement recently became Medicare and Medicaid eligible for certain applications, which is expected to drive increased adoption. We have also secured recent placements with specialty pharmacies. Sales of our core brands decreased in the third quarter. However, we expect growth for both brands in 2022. Hamilton Beach is a top three share brand in 26 categories. Hamilton Beach continues to be the No. one brand in units in the U.S. We're making great progress with our brand repositioning for Proctor Silex. Hamilton Beach and Proctor Silex average star rating across key e-commerce platforms remains strong at 4.4 each. For both brands, we have launched a number of exciting new products in multiple high demand categories for the holiday selling season. To name just a few examples of exciting new products for our Hamilton Beach brand, the Quantum Air Fryer Toaster Oven, a toaster oven with 47% faster air frying in a larger oven. Our team designed a patented technology that increases airflow and cooking performance and allows for a larger cooking cavity, expanding consumer food options to make in the oven. We believe this combination is unique in the marketplace. Our Big Mouth Juice & Blend is a 2-in-1 combination juicer and blender that significantly reduces time and complexity for juicing and making juice-based blended drinks. Our Portable Food Warmer is a new category we are creating that makes it easy for consumers to bring lunch to school or work in a post-COVID world. It features a bento-style food tray and includes a 12-volt car adapter as well as a 120-volt plug for reheating meals on the go. For Proctor Silex, we are very excited about our Quick Clean Food Processor, a simply better food processor that slices, shreds, chops, and purees, and then can be cleaned hands-free with our Quick Clean cycle. Good Housekeeping announced its 2022 Kitchen Gear and Coffee Awards just last week. The awards are based on innovation, performance, ease of use, and problem-solving attributes. We are very excited that our Bartesian Cocktail Machine, our new Proctor Silex Food Processor that I just described, and our Hamilton Beach Scoop Single-Serve Coffee Maker made Good Housekeeping's prestigious list. Switching topics to supply chain. We have experienced challenges for more than a year that have contributed to our elevated inventory levels. Fortunately, these issues have begun to moderate, and we expect to significantly reduce our inventory and debt levels by the end of this year and into the first quarter of 2023. Virtually all of our inventory is of very good quality. Many products have solid store placements or strong e-commerce order patterns, which will help us work the inventory down over the coming months. Although the forward look is favorable due to the size of our position on September 30th, I would like to review the factors that have been at play. In 2021, our third-party manufacturers in China required their customers to release purchase orders months earlier than they did before the pandemic. Even so, they struggled to meet demand. As we have previously discussed, last year, a large portion of our supply was produced late, resulting in deliveries in 2022 for goods we needed in 2021. During this year, we have adjusted our forecasts as demand patterns shifted. However, due to the purchase order lead time suppliers have required, product was already produced or committed to at higher forecasted levels. We have negotiated reduced lead times with many suppliers. We are now better able to adjust orders in a timely manner as demand ebbs and flows. While some product was produced late, some was produced on time but was delivered late due to the challenge of securing container space in the fall of 2021. Due to the increased transit times from our suppliers' factories to our distribution centers as a result of congestion across the transportation supply chain, we have owned inventory for a longer period of time before we can turn it. Retailers have experienced similar issues for product they manage on their own. Since stock levels are high across the store, retailers reduced open-to-buy dollars. While we expected the industry demand to flatten or decline slightly in 2022, we did not expect retailers to pull back on orders and allow low in-stocks to continue impacting order patterns for our products. Demand for small kitchen appliances is expected to remain solid and well ahead of pre-pandemic levels. Our industry has grown as consumers learn how to cook and make drinks at home during the pandemic. We're also benefiting from demographic trends, with millennials moving into a household formation phase of life in very large numbers. We believe more people are using a broader range of appliances more frequently. During inflationary times, many consumers stay home and cook more to save money. That is especially true now, given the significant increases in away-from-home meal costs. History tells us that during difficult economic times, people do not eliminate spending on essentials. Coffee makers, small appliances used to heat food, and many other small appliance products are regarded as essential. While we may experience slight ups and downs in the coming 18-24 months, we believe our industry will have solid underlying support that should prevent a significant and prolonged downturn. Our company has introduced a broad array of innovative new products this year that are available for the holiday selling season. Material costs are moderating, ocean shipping rates are dropping significantly, and container space availability has improved. We expect these trends to benefit Hamilton Beach, our retail partners, and consumers more in 2023. Based on what we know, we believe we are well-positioned to deliver a strong finish to the year. Now I'll turn the call over to Michelle, who will review our third quarter numbers in detail and discuss our outlook. Thank you, Greg, and good morning, everyone. Let me discuss our third quarter 2022 results compared to the third quarter of 2021, and then I'll discuss our outlooks. Net sales decreased 3.8% to $150.8 million compared to $156.7 million, primarily due to lower unit sales, partially offset by price increases and a favorable product mix. Lower sales volumes in our Latin American, Mexican, and U.S. consumer markets were partially offset by increases in our global commercial and Canadian consumer markets. Gross profit margin expanded to 23.1% compared to 21.2% last year. As Greg discussed, this expansion was due to pricing initiatives that offset higher product costs, favorable product mix, and lower expenses for outside warehousing and labor compared to last year. Selling, general, and administrative expenses decreased $400,000 to $25.4 million, primarily due to non-recurring expenses for last year's distribution center relocations. Operating profit increased to $9.4 million compared to $7.4 million, reflecting the gross margin expansion and lower SG&A. Interest expense net increased $600,000 due to rising interest rates, as well as an increased average borrowings outstanding under our revolving credit facility. Higher interest rates were partially offset by our interest rate swaps. Other expense includes currency losses of $400,000 in the current year compared to currency losses of $200,000 in the prior year. The currency losses arise from the remeasurement of liabilities related to inventory purchases by foreign subsidiaries denominated in US dollars. Also, in the third quarter of 2022, we reported a $300,000 pension settlement charge related to our U.S. defined benefit pension plan. For the quarter, net income increased to $5.9 million, or $0.43 per diluted share, compared to net income of $5.7 million, or $0.41 per diluted share. We repurchased 109,828 shares during the third quarter under our current stock repurchase program, which runs through December 31st, 2023, for an aggregate purchase price of $1.4 million. Year-to-date through September 30th, we repurchased a total of 261,049 shares at prevailing market prices for an aggregate purchase price of $3 million. Now I'll turn to our balance sheet and cash flows. For the nine months ended September 30th, 2022, net cash used for operating activities was $40.2 million compared to $4.1 million in the prior year. This increase was primarily due to net working capital, which was the use of cash of $62.1 million in 2022 compared to a use of $4.4 million in 2021. Trade receivables provided cash of $21.4 million compared to $26.5 million, which reflected the lower sales as well as improvement in days outstanding. Net cash used for inventory and accounts payable combined was $83.5 million in 2022 compared to $30.9 million in 2021. Capital expenditures through the third quarter of 2022 increased to 1 point Excuse me, decreased to $1.6 million compared to $9.1 million through the third quarter of 2021. The decreases mostly reflect non-recurring capital spending for our new distribution center last year. Net debt was $144.5 million compared to $113.5 million at September 30th, 2021, and $95.7 million at December 31st, 2021. As Greg discussed, we expect to significantly reduce inventory and debt levels by the end of the year. Now let me turn to our outlook. We expect that revenue in the fourth quarter will increase modestly compared to last year. We expect to benefit from some shift in timing of retailer holiday build orders from this year's third quarter. Our placements are strong for the holiday selling season, and we have introduced many new and exciting products across all of our brands. Results will depend on consumer pull-through and retailer reorders throughout the holiday selling season, which could be affected by inflation, rising interest rates, and consumer sentiment. For the full year 2022, we have adjusted our outlook from a modest increase in revenue to slight decline following our third quarter results. We continue to expect full year operating profit to increase significantly compared to 2021, including the $10 million insurance recovery that we recognized in the first quarter of this year. That concludes our prepared remarks. We'll now turn the line back to the operator for Q&A. Thank you. Again, at this time, if you do have a question, that will be star one. We'll hear first today from Peter Benedict with Baird. Hey, guys. Good morning. Thanks for all the info. Just following up quickly there on the fourth quarter visibility. Just curious how much visibility you have in there. I mean, it sounds like there's clearly some dependence on reorders and sell-through. Just, I don't know. I mean, is that a more material part of the equation for 4 Q this year than it typically is? Just trying to understand kind of that comment and that dynamic for 4 Q. Sure. Hey, good morning, Peter. Yeah, I think it's sort of the more normal aspect of the holiday season. Certainly there's a lot of strange things going out there in the retail world, as you well know. Generally speaking, what happens is we'll get a large order in to load stores or to load warehouses for an e-commerce player. Consumers will either buy early or buy late, or it'll be higher or lower than their retailers' expectations. What will happen is we'll start getting, you know, reorders. The timing could be early if it's a nice start to the season or if consumers are delayed and wait for deals and those sorts of things. We sort of miss a turn. This is a time of year where it really depends on the consumer pull and the retailer reorder. That's a pretty normal thing. I think as we stand here at the end of October, you know, things are going along still in line with the outlook we just gave in terms of how it's unfolding so far. You know, as you well know, it will sort of make or break things over here in the next four to six weeks. We'll have to see how it goes. Sure. No, that makes sense. Like, Thanks, Greg. On inventory, I know you said you expect that to come down pretty significantly. Not sure if you can add any color there. How do we think about maybe the optimal level of inventory or where you think you can get it? I don't know what kind of metrics you wanna use, but you know, day sales or something along those lines. I'm just trying to understand the magnitude of inventory reduction we might expect as we look to the end of this year and into early next year. Okay. We track and monitor our inventory, you know, every SKU and you know, we're able to sort of have the visibility to understand when it's based on the forecast, when it will be used up, when it will turn. We have, you know, given at the level we're at, we've been having multiple meetings per week to review kind of how things are going, what adjustments we're making to purchases or suppliers, what else can we do to move things along. It's obvious, as you can guess, a pretty high focus for us. I think based on the forecast, which is updated, you know, weekly throughout the week, but a full review weekly, we sort of revisit when we think we're gonna run down our inventory. Right now, we still feel good that we'll come down the hill through the end of the year and down to better levels in the first part of next year, kinda sorta maybe late first quarter, sometime in the second quarter. We think next year we should be positioned to get back to four turns a year in our inventory. If all, you know, if the forecast is good and our business goes like we think, that will be the case. That number also as you know, Peter, Lunar New Year is a little early this year, so people are buying up. Some of that might have to ship, you know, before year-end, which will end up on our books. If we can delay it a little bit into next year, we'll do that, but it's kinda hard to thread that needle too much. I think really what we'll end up to do is probably feel, hopefully, if forecast holds up, we'll be in pretty good shape come, like I said, late first quarter, sometime in early second quarter. No, that's great. That's super helpful. Maybe just something on the input cost and outlook. You talked about some of the factors that are starting to ease up on the supply chain. Just kind of like where are you guys, or what's the cycle with line reviews with your retail partners? You know, when do those tend to happen? Have you been hearing any requests from those retailers to start to claw back some of the higher costs that have been kind of in the system over the last couple of years? Has that happened yet? If not, when do you think that might start to happen? I guess, given your experience in the business, how has that tended to play out? Hey, Peter, this is Scott. Yeah, a couple things around that. Yeah. You know, we're definitely, as Greg indicated, we're seeing this cost coming down. You know, from a timing perspective, you know, with our e-commerce retailers- It's pretty dynamic. There's no set, you know, cycles for them to change out. It's changing every day, every week. You know, we kind of look at where our pricing is relative to the competition, and then it, you know, comes a business decision as to where we wanna be from a margin perspective and how that aligns to our cost. From our brick-and-mortar retailers, there, you know, there are, as you know, more traditional changes in their assortments. You know, so some of those larger retailers were already talking about the fall resets today. Then some of the, what we would call mid-tier retailers, we're talking about the spring resets at this point. Now I'll tell you that you know, the discussion around the cost, we've been pretty transparent that we, you know, as costs were increasing, and a lot of that was tied to containers, that we would be adjusting and remaining competitive with them as costs decreased. Those, you know, those conversations are active. It really kind of varies, you know, based on the container cost relevant to the size of the SKU and to the retailer and to the amount of inventory that we have or the amount of inventory that they have from a timing perspective. We kind of look at that, you know, in the detail by SKU with customers. If you look at Canada, you know, there's a little bit of headwind with them on the currency side of things. While costs are coming down, the currency is kind of working against us, so those conversations have been a little bit quieter. Yes, we are, you know, we wanna be competitive. We're gonna be dynamic. We're gonna look at our latest container rates and our latest negotiated pricing. We're gonna, you know, work with our retailers on what's a appropriate time that works to keep our gross margins, but also keeps us competitive in the POG. Got it. No, that's great. My last question, just strategically, how do you guys think about the initiatives or even just from an M&A standpoint or potential M&A standpoint, taking advantage of a downturn in the global economy? I mean, the sector has been pretty resilient, I guess, in past recessions, but just how do you think about strategically, maybe the next 12-18 months, if the economy is as tough as some people think it might get? Sure. This is Greg, Peter. That is a tough one to predict. I say what I feel really good about is that, you know, the things that we've brought onto our team here with, you know, Brita and Clorox and HealthBeacon, Bartesian, those things are, you know, really we're very excited about those, and they're gonna benefit us, they should benefit us nicely in 2023. From our standpoint, it's been very quiet for a pretty good part of this year on the M&A front, you know, on the inbound, you know, opportunities. As you know, for a period of time there, we were seeing stuff everywhere all the time. It's been pretty quiet. I think what will be interesting is I think this environment is gonna stress those folks that were kinda skating by. You know, we would very much like to find the right strategic opportunity in our retail or commercial business and add that to our portfolio. I will say we've got to get our house in order on the inventory and debt level, which hopefully will happen in the first quarter like we've talked about. If that happens and our debt level improves, I hope we assume our business will hold up fine. Sure it'll be a little bit of a rollercoaster ride like it always is, but if things hold up for us well, if something comes along, we'd be very interested in taking a hard look at something. Got it. Okay, perfect. That's all I've got. Thanks so much, guys. I appreciate the color. Thanks for your questions, Peter. Once again, for questions, that is star one at this time. We'll pause for just a moment. With no other questions at this time, I'd like to turn things back to our CEO, Mr. Greg Trepp, for closing remarks. Thank you. As we work to deliver a strong finish to this year, we remain well positioned to benefit from our strong portfolio of leading brands. We are focused on executing well on our strategic initiatives. Our commercial business is experiencing record growth, and the strong order flows continue. We have a broad array of innovative new products that should drive growth of our core Hamilton Beach and Proctor Silex brands. The small appliance market is projected to stay strong and above pre-pandemic levels. We have many reasons for optimism based on what we know at this time. We are, however, in uncertain times. It is not known how inflation and rising interest rates are going to play out in the macro environment in the global economy. As always, our actual results will depend on consumer pull-through and retailer reorders. It takes an incredible focus to manage through these sorts of times. I'm very grateful to our team for all of their hard work, diligence, and good thinking, which they continue to demonstrate every day. That concludes our presentation. Thank you again for joining our call. Again, that does conclude today's conference. Thank you for joining us. You may now disconnect.