Hamilton Beach 2009 Annual Report Download - page 11

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in the beginning of 2009 before reaching
a bottom in mid-2009, where it remained
almost through year end. As a result of these
market conditions, NMHG experienced a
52 percent drop in lift truck unit shipments
and a corresponding 48 percent decline in
revenues in 2009 compared with 2008.
The company reported a significant net loss
for the year ended December 31, 2009.
However, as a result of aggressive programs
to reduce inventories and receivables,
NMHG generated significant cash flow
before financing activities of $121.7 million
in 2009.
NMHG acted early and aggressively to
counteract the market decline. In late 2008,
NMHG implemented cost containment
measures that included reduced salaries and
other employee-related benefits, capital
expenditure restraints, and travel restrictions,
all of which remained in place throughout
2009. In addition, in late 2008 and through-
out 2009, the company implemented
reductions-in-force and plant restructurings
to properly size the organization for the
reduced market levels. Over the year, NMHG
restructured its American and European
sales and marketing work forces to enhance
the effectiveness of these organizations while
at the same time reducing expenses. In
October 2009, the company announced the
shutdown of its Modena, Italy, manufacturing
plant and the transfer of production to its
Masate, Italy, manufacturing plant. These
restructurings were essentially complete
by the end of 2009.
NMHG was fortunate that some key
programs undertaken well in advance of the
downturn were completed in the first quarter
of 2009. A manufacturing restructuring
program, which included the transfer of
the 2.0 to 3.5 ton internal combustion
engine pneumatic lift truck to the Berea,
Kentucky, plant, the closure of the plant in
Irvine, Scotland, and a plant consolidation
in Greenville, North Carolina, all produced
a smaller total plant footprint with
significant efficiencies and enhanced
throughput capacity.
Unlike prior years, currency exchange
rates and material costs had a significant
favorable effect on operating results in 2009
as the dollar strengthened against the British
pound and Australian dollar for the greater
part of the year and as commodity costs
declined compared with 2008. These
benefits were compounded by the favorable
effects of price increases implemented in
prior periods. In addition, current-year
results benefited from the effect of LIFO
liquidations at lower prior-year inventory
costs compared with current-year purchases.
During 2009, NMHG sold its
Australian fleet rental business and the
majority of its Australian retail dealerships,
which has resulted in retail becoming a very
small portion of overall NMHG results. The
company will continue to look to divest
its remaining retail dealerships to strong
independent dealers in the coming year.
NMHG’s market share of factory
bookings declined in 2009 in each area
of the world, largely due to NMHG’s
commitment to reducing dealer inventories
as quickly as possible to market-appropriate
levels and to the disproportionate decline
in the internal combustion engine counter-
balanced truck market in which NMHG has
a more significant share.
Market Outlook for 2010
Global market levels for units and
parts volumes appear to have stabilized in
the second half of 2009. However, NMHG
is not anticipating a market upturn of any
significance in the first half of 2010. The
Chinese market, in which NMHG is not a
significant player, is the only market to
have recovered to pre-recession levels. The
Brazilian market also appears to be turning
up. Latin America and the critical North
American market, as well as European
The new European Hyster®
pneumatic tire, J3.5XN electric lift
truck, with all-weather cab, shown
above, has a lifting capacity
of up to 3.5 metric tons.
The new Yale®GP170-190 Veracitor™
VX, with lifting capacities from
17,000 to 19,000 pounds, features
a 3.3L high output turbo diesel
engine and custom transmission
for maximum performance.