NEW YORK, May 22, 2020 (GLOBENEWSWIRE) Pomerantz LLP announces that a class action lawsuit has been filed against Hamilton Beach Brands Holding Company (“Hamilton” or the “Company”) (NYSE: HBB) and certain of its officers. The class action, filed in United States District Court for the Eastern District of New York, and indexed under 20-cv-02323, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Hamilton securities between February 27, 2020, and May 8, 2020, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
Hamilton was founded in 1904 and is headquartered in Glen Allen, Virginia. The Company, together with its subsidiaries, designs, markets, and distributes small electric household and specialty housewares appliances. The Company sells its products through a network of mass merchandisers, e-commerce retailers, national department stores, variety and drug store chains, specialty home retailers, distributors, and other retail outlets.
As a holding company, Hamilton primarily operates through its subsidiaries, which are located throughout the U.S. and internationally, including Mexico. According to the Company’s most recent annual report on Form 10-K, Hamilton has two Mexican subsidiaries—Grupo HB/PS S.A. de C.V. and Hamilton Beach Brands de Mexico S.A. de C.V.
The complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about Hamilton’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (i) Hamilton had inadequate disclosure controls and procedures and internal control over financial reporting, particularly with respect to one of its Mexican subsidiaries; (ii) consequently, the Company’s accounting included certain irregularities with respect to the timing of recognition of selling and marketing expenses and the classification of certain expenditures within the statement of operations at this Mexican subsidiary, as well as potential misconduct with respect to the realizability of certain assets of the Mexican subsidiary; (iii) as a result of all the foregoing, Hamilton could not accurately attest to its financial results, particularly with respect to these metrics, and was consequently at an increased risk of delaying the filing of its periodic reports with the SEC; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On May 11, 2020, during pre-market hours, Hamilton announced that it could not timely file its 1Q20 10-Q because of “certain accounting irregularities with respect to the timing of recognition of selling and marketing expenses and the classification of certain expenditures within the statement of operations at its Mexican subsidiary.” Hamilton further stated that its “Audit Review Committee has commenced an internal investigation” regarding “the realizability of certain assets of the Mexican subsidiary.”
Following these disclosures, Hamilton’s stock price fell $1.03 per share, or 8.99%, to close at $10.43 per share on May 11, 2020.