Hamilton Beach 2009 Annual Report Download - page 14

11
2009, generating a substantial increase in
operating profit and net income compared
with 2008. Sales volume was constrained
by job losses and an uncertain economy,
and, in the second half of 2009, by lost
placements and promotions at certain key
retailers. Nonetheless, improved margins
from sales of innovative, higher-priced
products, reduced product and supply
chain costs and lower advertising expenses
more than offset the impact of the decline in
revenues. Additionally, as a result of strong
profitability and effective working capital
management, HBB generated cash flow
before financing activities of $33.4 million
in 2009.
Market Outlook for 2010
The small kitchen appliances market
appears to be recovering. Although consumer
confidence and other key indicators have
improved in early 2010 compared with
2009, the pace and sustainability of the
upturn in consumer markets are uncertain.
Although the market is expected to be
stronger in 2010, it is still not yet back to
the retail sales levels of 2006 and 2007
as consumers continue to struggle with
financial concerns and high unemployment
rates. Importantly, the company is well
positioned at mass merchants who tend to
serve price-conscious consumers and who
performed better in 2009 than higher-end
retailers. HBB is not significantly dependent
on the higher-end segments, which are
expected to continue to experience weak-
ness in 2010. Accordingly, HBB anticipates
revenues in 2010 to be comparable to or
slightly lower than 2009.
Actions Being Taken to Move
Forward in 2010
HBB entered the recession operationally
strong and emerged even stronger. The
company is entering 2010 with expectations
for above-average growth in the international
and commercial markets. However, U.S.
consumer markets will be more challenging
in 2010. While HBB’s position with mass
merchants was stable and helped to mitigate
the effects of the global recession in 2009,
in 2010 the company will continue to invest
Above: Hamilton Beach®
Commercial Tempest®
high-performance blender.
Right: Clockwise from top:
Hamilton Beach Brands’ newest
products include: Hamilton Beach®
6-quart programmable Set & Forget®
slow cooker with spoon rest and
clip-tight gasket lid, Hamilton Beach®
BrewStation®Summit Ultra 12-cup
coffeemaker, Hamilton Beach®
6-Speed classic hand mixer,
Traditions®by Proctor Silex iron
and Hamilton Beach®Premiere
cookware electric skillet.
Below: True Air®Allergen Reducer.