Hamilton Beach 2007 Annual Report Download

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2007 Annual Report
Managing for long-term profit growth
NACCO
INDUSTRIES, INC.

Table of contents

  • Page 1
    NACCO I N D U S T R I E S , I N C . Managing for long-term profit growth 2007 Annual Report

  • Page 2
    ... trucks, including sales of related service parts. NACCO Housewares Group Hamilton Beach Brands ("HBB") Headquarters: Richmond, Virginia HBB is a leading designer, marketer and distributor of small electric household appliances, as well as commercial products for restaurants, bars and hotels. HBB...

  • Page 3
    ... outlet malls with 272 stores throughout the United States in 2007 . HBB: • Strong heritage brands with leading market shares • Strong relationships with leading retailers • Highly professional and experienced management team • Successful track record of product line expansion and new...

  • Page 4
    ...of Contents Selected Financial and Operating Data ...2 Letter to Stockholders...4 NACCO Materials Handling Group ...10 Hamilton Beach Brands...20 Kitchen Collection ...28 North American Coal...34 Supplemental Data ...42 Officers and Directors ...44 Form 10-K ...45 Corporate Information...Inside Back...

  • Page 5
    ... at North American Coal and Hamilton Beach Brands. Each subsidiary company will redouble its efforts to manage costs, drive innovation and improve sales and marketing professionalism. However, in this period of economic uncertainty, the In 2007, performance improved in a number of areas, although...

  • Page 6
    Managing for long-term profit growth Selected Financial and Operating Data NACCO Industries, Inc. and Subsidiaries 2007 Year Ended December 31 2006 2005 2004 (In millions, except per share data) 2003 Operating Statement...Share Data: Cash dividends ...$ Market value at December 31 ...$ ...

  • Page 7
    ... Flow Data: Operating Activities NACCO Materials Handling Group ...$ Hamilton Beach Brands ...Kitchen Collection ...North American Coal Corporation ...NACCO and Other ...Provided by operating activities ...$ Year Ended December 31 2006 2005 2004 (In millions, except employee data) 2003 34.6 19...

  • Page 8
    Managing for long-term profit growth To Our Stockholders Introduction Key profitability and growth programs in place at NACCO Materials Handling Group ("NMHG"), Hamilton Beach Brands ("HBB"), Kitchen Collection ("KC") and North American Coal ("NACoal") delivered substantial benefits in 2007. ...

  • Page 9
    ... asset sales, which occurred in 2006. In 2007, NACCO planned to spin off its Hamilton Beach Brands ("HBB") subsidiary to form a new public company, Hamilton Beach, Inc. However, due to extreme volatility and uncertainty in U.S. equity markets, in August 2007 the Company's Board of Directors decided...

  • Page 10
    ...the long-term financial performance of NMHG's owned retail operations, particularly in Australia. The important North American market contracted in 2007, as anticipated, and is expected to contract again in 2008, along with other markets in the Americas. The company is hopeful sales of new products...

  • Page 11
    ... higher-end chains. One of the keys to capturing that potential is the ability to offer customers unique, high-quality products at affordable prices. To help accomplish this goal, KC has established innovative product selection and merchandising programs, a highly successful Hamilton Beach® private...

  • Page 12
    ...from selling two electric draglines. Underlying performance at all of NACoal's mines was strong, although negatively affected by customer power plant outages. In the near term, further customer power plant outages are North American Coal NACoal remains the largest lignite miner in the United States...

  • Page 13
    ...of long-term benefit to the Company and its stockholders. The Company has also approved a program to use available NACCO funds to purchase NACCO stock, an action authorized by the Board of Directors in late 2007. Alfred M. Rankin, Jr. Chairman, President and Chief Executive Officer NACCO Industries...

  • Page 14
    Managing for long-term profit growth NACCO Materials Handling Group

  • Page 15
    ... were price increases and increased sales volumes of higher-margin lift trucks and parts. These improvements were partially offset by higher marketing and employee-related expenses, increased material and manufacturing costs and unfavorable foreign currency exchange rates. NMHG Retail's operations...

  • Page 16
    ... strengthened market positions. Industry Trends Lift truck customers increasingly require more dependable lift trucks and greater levels of service and expect manufacturers and dealers to deliver both at competitive prices. Therefore, maintaining low costs as well as outstanding quality, timeliness...

  • Page 17
    ..., while growth programs focus on increasing country and industry market share positions by addressing user needs with customized packages of products and services. restructuring its global manufacturing facilities and processes. The company has placed an intense focus on further implementation of...

  • Page 18
    ... expenses increased in 2007 due, in part, to several issues relating to specific components on new products utilized in unique customer applications. The company is working diligently to address these concerns and continues to deliver cost reductions and product quality improvements through its...

  • Page 19

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  • Page 21
    ... warehouse product line offering was significantly strengthened in 2007 with the introduction of a new Retail Reach truck in the Americas. In addition, a number of feature improvements were introduced in 2007, which allow the warehouse lift trucks to deliver more performance in targeted applications...

  • Page 22
    ...® and Yale® dealers, providing dealers with best practices and performance assessment tools in the areas of operational and financial management, lift truck and parts sales, service, rental and fleet management. NMHG also offers customized consulting assistance to help dealers implement these...

  • Page 23
    ...positioned to offer superior products, which are efficiently manufactured and distributed by outstanding dealers. Key profitability and growth programs, particularly in the areas of quality and efficiency, product flexibility and sales professionalism, are expected to improve prospects for long-term...

  • Page 24
    Managing for long-term profit growth Hamilton Beach Brands

  • Page 25
    ...-Off and New Company Name In April 2007, NACCO Industries announced a plan to spin off its Hamilton Beach/Proctor-Silex business to establish an independent public company named Hamilton Beach, Inc. Due to volatility and uncertainty in capital markets, the NACCO Board of Directors decided in late...

  • Page 26
    ...from new products with new brand names. Overall, the market growth rate in small kitchen appliances is likely to be slightly negative to very low due to economic uncertainties, including a significantly weakened housing market in the United States. Strong relationships with the leading retailers are...

  • Page 27
    ... company's U.S. consumer sales were from products introduced in the previous three years. The revolutionary Hamilton Beach® BrewStation® Below left to right: Hamilton Beach® professional stainless steel iron, Hamilton Beach® digital 2-slice toaster, Hamilton Beach® 6-speed classic hand mixer...

  • Page 28
    [24]

  • Page 29
    ... counter of almost every soda fountain across America. Today, the Hamilton Beach® Commercial brand name is associated with a wide variety of products found in commercial kitchens, restaurants, bars and hotels. It remains a leading brand in commercial blenders and spindle mixers in the United States...

  • Page 30

  • Page 31
    .... New brand initiatives could enhance HBB's position broadly, help HBB target specific markets, such as higher-end consumers, or help HBB serve specific retailers with key names that strengthen their brand offerings. Overall, HBB's brand programs represent a critically important part of the company...

  • Page 32
    Managing for long-term profit growth Kitchen Collection

  • Page 33
    ... Chef® stores bring the best products, at a great value, to cooking and food enthusiasts across the U.S. Industry Trends The retail environment continues to be extremely competitive. Widespread Chinese sourcing allows many retailers to offer value-priced kitchen products. Labor and rent costs are...

  • Page 34
    ... ability to aggressively manage both vendor and store costs is accomplished through four established programs. Corporate expense management. As part of the LGC integration and synergy plan, KC closed LGC's existing headquarters in Shrewsbury, New Jersey in April 2007 and integrated those operations...

  • Page 35
    ...utilizes mall profiling information and segmentation analysis to assess new outlet mall locations as well as improve profitability at existing outlet malls. As a result, the company manages its outlet stores differently depending on whether an outlet mall has high-end retail tenants, is located near...

  • Page 36

  • Page 37
    ... LGC acquisition, and the company sees high-growth potential for the LGC store format in traditional malls. While KC developed and tested several formats of its own for use in this segment, the LGC store format - with its higher-end offerings, gourmet foods, home entertaining products and gifts - is...

  • Page 38
    Managing for long-term profit growth The North American Coal Corporation

  • Page 39
    ... $30 million from the sale of two draglines. Vision and Goals NACoal's vision is to be the leading low-cost miner of lignite coal used in power generation, coal gasification and coal-to-liquids plants and to provide selected value-added mining services for companies in the aggregates business...

  • Page 40
    ... return the land to its previous, and in many cases improved, condition. Key Programs to Leverage Low-Cost Mining Expertise Highly disciplined and experienced management teams in place at existing mines strive for continuous improvements in safety and mining efficiency. The key projects supporting...

  • Page 41
    ... employee relations improves productivity and employee retention, thereby reducing costs and enhancing profitability. Contract structure. Most of NACoal's mining contracts minimize exposure to the market price of coal. These carefully structured coal supply agreements establish the specific services...

  • Page 42
    ... above that of 2007, volumes in 2009 and beyond are now forecasted to be at levels below the company's previous expectations. It is NACoal's hope that marketing efforts directed beyond NACoal's current customers will result in new business opportunities and a return to previously anticipated mining...

  • Page 43

  • Page 44
    ..., in partnership with two other industry leaders, has formed a company called American Lignite Energy to explore North Dakota coal-based energy products. Utilizing lignite coal beneficiation technologies. Over the past few years, a process to use waste heat from power plants to dry and enhance the...

  • Page 45
    ... increased customer power plant outages, lower limerock deliveries and lower royalty income, resulting from the completion of third parties mining certain reserves during 2007, are all expected to affect NACoal's 2008 performance. The company also expects higher costs due to lower production levels...

  • Page 46
    ... of 2007's quarter ends) ...Total 2007 average capital employed ...Return on total capital employed target percentage...Return on total capital employed target = target net income before interest expense, after tax ...2007 net income, as reported...Plus: 2007 interest expense, as reported ...Less...

  • Page 47
    ... income generation because management believes it provides useful information with respect to earnings in a form that is comparable to the Company's cost of capital employed, which includes both equity and debt securities. * Tax rate of 38% represents the Company's marginal tax rate as compared with...

  • Page 48
    ... Vice President; President, Hyster Company Raymond C. Ulmer Vice President, Finance Americas Europe, Africa and Middle East: Officers of The North American Coal Corporation Robert L. Benson President and Chief Executive Officer Bob D. Carlton Vice President-Financial Services Douglas L. Darby Vice...

  • Page 49
    ...profit growth Corporate Information Annual Meeting The Annual Meeting of Stockholders of NACCO Industries, Inc. will be held on May 14, 2008, at 9 a.m. at the corporate office located at: 5875 Landerbrook Drive Cleveland, Ohio 44124 Investor Relations Contact Investor questions may be addressed to...

  • Page 50
    NACCO Industries, Inc. 5875 Landerbrook Drive • Cleveland, Ohio 44124 An Equal Opportunity Employer Printed in U.S.A.