Hamilton Beach 2013 Annual Report Download - page 7

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modestly to $44.5 million, or $5.47 per diluted share,
in 2013 from $42.2 million, or $5.02 per diluted
share, in 2012. HBB achieved very strong operating
results on a solid revenue increase. However, operating
results at both NACoal and Kitchen Collection were
disappointing. NACoal’s results suffered from reduced
volume and temporarily higher costs at the Reed
Minerals operation. Kitchen Collection’s results were
hurt by fewer customer visits, reduced margins and
charges totaling $2.0 million, or $1.3 million after tax
of $0.7 million, for the impairment of certain fixed
assets, employee severance in connection with future
closings of unprofitable stores and a write-down of
certain inventory to fair market value.
In 2013, strong returns on capital employed(1)
(“ROTCE”) on a net debt basis were realized at both
NACoal (13.0 percent) and HBB (34.9 percent).
However, Kitchen Collection generated a loss.
The Company generated negative consolidated
cash flow before financing activities of $7.6 million
in 2013 as strong positive cash flow before financing
activities at HBB of $38.5 million was offset by negative
cash flow before financing activities of $26.7 million
at NACoal and $12.2 million at Kitchen Collection.
NACoal’s negative cash flow before financing activities
was primarily the result of equipment and coal reserve
acquisitions as part of NACoal’s plan to improve
mining efficiencies, increase volumes and reduce costs
at Reed, while Kitchen Collection’s negative cash flow
was primarily because of the significant 2013 operating
loss. The Company had consolidated cash on hand
of $95.4 million as of December 31, 2013 compared
with $139.9 million as of December 31, 2012. Debt as
of December 31, 2013 was $183.8 million compared
with $177.7 million as of December 31, 2012. NACCO
expects strong cash flow before financing activities
from NACoal and HBB in 2014 and improved cash
flow before financing activities at Kitchen Collection.
In November 2011, the Company’s Board of
Directors approved the repurchase of up to $50 million
of the Company’s outstanding Class A common stock
(the “2011 Stock Repurchase Program”). In November
2013, the Company’s Board of Directors terminated
the 2011 Stock Repurchase Program and approved
a new stock repurchase program (the “2013 Stock
Repurchase Program”) providing for the purchase
of up to $60 million of the Company’s outstanding
Class A Common Stock through December 31, 2015.
Neither of the share repurchase programs required
the Company to acquire any specific number of shares.
In total under the 2011 Stock Repurchase Program,
NACCO repurchased approximately 624,000 shares
of Class A common stock for an aggregate purchase
price of $35.6 million, including $30.4 million of stock
purchased during 2013. As of December 31, 2013,
the Company had repurchased approximately 16,100
shares of Class A common stock for $0.9 million under
the 2013 Stock Repurchase Program. A total of $31.3
million of Class A common stock was purchased in
2013 under both plans.
(1) See page 20 for the calculation of return on capital employed.