Hamilton Beach 2009 Annual Report Download - page 15

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in innovative products and value-added
services for its key customers to ensure
HBB products maintain their current strong
market position in those accounts. In 2010,
HBB also plans to strengthen its focus on
the higher-end U.S. consumer market.
The company expects to launch a line of
Melitta-branded beverage appliances under
its new licensing agreement in the third
quarter of 2010.
HBB will continue to monitor
commodity costs closely and will adjust
product prices and placements as
appropriate. The company will continue to
have an intense focus on improving market
share while maintaining or improving
product margins.
Certain employee-related benefit
programs that were suspended at the
beginning of 2009 were partially phased
back in during the fourth quarter and have
been fully restored in 2010. Nevertheless,
HBB will continue to manage its operating
expenses aggressively.
Overall, full-year 2010 net income
and cash flow before financing activities
are currently expected to be lower than
2009 on roughly comparable revenues, as
expenses are expected to be higher in 2010
compared with the unusually low levels
achieved in 2009.
Longer-Term Perspective
Product quality, customer service and
fact-based professional sales and marketing
remain areas of excellence for HBB.
Important promotional campaigns designed
to support HBB’s brands and new products
are expected to continue. The company’s
product and placement track record
continues to be impressive due to innovation
processes centered on understanding and
meeting end-user needs. New products
introduced in 2009, as well as further new
product introductions in the pipeline for
2010 and future years, are expected to
improve revenues.
At the end of 2009, HBB’s Chief
Executive Officer, Dr. Michael J. Morecroft,
retired and was succeeded by Gregory H.
Trepp, previously the Vice President of
Marketing and a long-time member of the
executive management team. The transition
was extremely smooth, with the company
continuing to be led by a strong and
experienced management team. This team
is focused on ensuring HBB continues to be
a leading designer, marketer and distributor
of small electric household and commercial
products sold worldwide under strong
brand names and achieving profitable
growth from innovative solutions that
improve everyday living. The company
will continue to work to increase revenues
and profitability by gaining placements,
improving efficiencies, reducing costs, and
pursuing strategic growth opportunities,
including growth through royalty and
branding agreements, growth throughout
Latin America and growth in commercial
products. The company is well-positioned
to continue its leadership position in the
small kitchen appliances industry and to
operate close to its long-term financial
objectives in the years ahead.
Kitchen Collection
2009 Results
Despite much economic uncertainty, a
weak consumer market and an environment
in which discretionary spending on
entertaining contracted, Kitchen Collection
achieved a major turnaround in 2009,
delivering increased revenues, income
and cash flow before financing activities
compared with 2008 and significantly
outperforming expectations held at the
beginning of 2009. Favorable results in both
store formats, as well as benefits from lower
product and freight costs, the full-year
benefit of an efficiently run distribution
center owned and operated by Kitchen
Collection rather than by a third party,
and administrative cost control measures
Proctor Silex®8-Speed Blender,
Hamilton Beach®Ensemble™
2-slice bagel toaster
(shown in red) and Hamilton Beach®
stainless steel kettle.