Hamilton Beach 2007 Annual Report Download - page 15

[11]
2007 Results
In 2007, NACCO Materials Handling Group (“NMHG”)
continued to make strides toward achieving its long-term
financial objectives. However, the company also faced certain
market and economic challenges. While European, Chinese
and South American markets strengthened in 2007, the critical
North American market declined. Although new product
programs moved forward successfully, material costs continued
to increase and the U.S. dollar weakened further relative to
several key currencies. Consolidated net income increased
13.6 percent to $39.3 million in 2007. However, 2007 net
income included charges totaling $8.0
million, or $4.9 million net of taxes of
$3.1 million, related to announced
manufacturing restructuring
programs, while 2006 net income
included a charge of $17.6 million, or
$10.7 million net of taxes of $6.9
million, incurred as a result of the
company’s early retirement of its
10% Senior Notes due 2009 and a
reduction in income tax expense of
$7.9 million related to the recognition
of a tax benefit for previously recorded capital losses.
NMHG Wholesale generated net income of $48.2 million
in 2007 compared with net income of $43.7 million in 2006, a
10.3 percent increase on 11.4 percent sales growth. Revenues
improved to $2.6 billion in 2007 primarily as a result of favorable
foreign currency movements in Europe from a weakening of
the U.S. dollar and an increase in higher-priced unit and
parts sales volumes resulting from an increased worldwide
lift truck market. Shipments grew to 90,899 units in 2007
compared with shipments of 87,789 units in 2006. Backlog
increased to approximately 30,500 units at December 31, 2007
from approximately 27,200 units at December 31, 2006.
Net income improved primarily as a result of the absence
of the charge for the early retirement of debt and lower interest
expense. Also contributing to the improvement 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 (net
of eliminations) reported a net loss of
$8.9 million on revenues of $137.8
million in 2007 compared with a net
loss of $9.1 million on revenues of
$170.6 million in 2006. Programs put
in place in mid-2007, which realigned
activities performed by the Asia-
Pacific Wholesale and Retail groups,
affected operations positively in the
fourth quarter, resulting in significant
progress toward the goal of achieving
at least break-even results in the Asia-Pacific retail operations
in the latter half of 2007, while building market position.
In 2007, Consolidated NMHG generated cash flow
before financing activities of $0.7 million compared with cash
flow before financing activities of $54.2 million in 2006. The
decrease between years was mainly a function of higher
accounts receivable primarily from higher fourth-quarter
revenues in Europe and an increase in days sales outstanding
due to timing of payments.
NMHG focuses on
long-term performance
in developing durable
lift trucks and in
working to improve
company profitability.
Left: The Yale® Veracitor® GP120VX pneumatic tire internal combustion lift truck, for lifting capacities up to 12,000 pounds, undergoes testing on the stability platform
at NMHG’s Counterbalanced Development Center in Portland, Oregon. The stability platform is a computerized electro-hydraulically controlled variable rate, variable axis
tilting platform, which can hold trucks up to a 65,000 pound lifting capacity. Trucks are tipped to both forward and lateral overturn, to simulate rated and unloaded
conditions in travel and stacking modes. The platform is used to test the tip angle of the lift trucks to verify compliance with internal test requirements and applicable
international design standards.
Revenues by
Geographic Region
(In millions)
03
04
05
06
07
$0 $1,000 $1,500$500 $2,000 $2,500 $3,000
■ Americas ■ Europe ■ Asia-Pacific
Unit Bookings, Shipments
and Backlog
18,000
20,000
22,000
24,000
26,000
28,000
30,000
32,000
■ Bookings ■ Shipments ■ Backlog
05
Q1 Q2 Q3 Q4
06
Q1 Q2 Q3 Q4
07
Q1 Q2 Q3 Q4
Net Income
(In millions)
03
04
05
06
07
$0 $10 $20 $30 $40
$34.6
$18.1
$10.7
$16.4
$39.3
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$2,488.5
$2,719.7
$2,399.9
$2,056.9
$1,779.6 J
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