Hamilton Beach 2010 Annual Report Download - page 14

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Hamilton Beach Brands
2010 Results
Hamilton Beach Brands had strong financial
results and solid cash flow before financing activities
in 2010. Revenues improved from $497.0 million in
2009 to $515.7 million in 2010 primarily as a result
of significantly higher unit sales volumes. However,
despite these higher volumes and lower product
costs in the first half of the year, net income declined
moderately to $24.4 million in 2010 from $26.1 million
in 2009. In 2009, margins were unusually strong in the
U.S. consumer market and the company had reduced
costs as a result of lower employee compensation and
benefits, all of which returned to more normal levels
in 2010. These factors, along with increased product
and transportation costs in the second half of 2010,
resulted in the slight decline in 2010 net income.
HBB generated cash flow before financing activities
of $12.8 million in 2010, down from the prior year
amount of $33.4 million as a result of higher finished
goods inventory levels at the end of 2010.
Outlook for 2011
The small kitchen appliance market in which
HBB participates has largely recovered. Nonetheless,
although consumer confidence and other key
indicators have improved compared with 2009,
the U.S. mass market is expected to remain soft
as mass-market consumers continue to struggle
with financial concerns and unemployment rates
remain high. International markets and commercial
product markets experienced a stronger recovery in
2010 and the momentum seen in these markets is
expected to continue into 2011.
In 2011, the company will continue to invest in
innovative products and value-added services for
its key customers to ensure HBB products maintain
their current strong market position. HBB continues
to focus on strengthening its market position with
all retailers through product innovation, promotions,
increased placements and branding programs,
as well as appropriate levels of advertising for the
company’s highly successful Brewstation®coffee maker
and Stay-or-Go®slow cooker lines. In addition, the
company expects to continue to introduce innovative
products in several small appliance categories. In
2011, HBB plans to continue to strengthen its focus
on the higher-end U.S. consumer market. The new
Melitta-branded beverage appliances, introduced in
late 2010, are expected to continue to gain position in
2011. The company also expects to launch the ScoopTM,
a single-serve coffee maker, and a new DurathonTM
iron product line. As a result of these new products,
HBB anticipates revenues in 2011 will increase
compared with 2010.
Bottom left: Hamilton Beach® products are designed
to fit every kitchen style and lifestyle. Featured -
Hamilton Beach® Stay or Go® slow cooker.
Bottom right: Hamilton Beach® slow cookers are
versatile for everyday meals or for entertaining in
the home. Featured - Hamilton Beach® 3-in-One
Slow Cooker.
At right: Hamilton Beach Brands’s newest products
include, clockwise at top: Hamilton Beach® Wave
Power® Plus blender, Hamilton Beach® BrewStation®
12-cup dispensing coffeemaker, Hamilton Beach®
FashionFirst™ iron, Hamilton Beach® Half Pint™ soft-
serve ice cream maker, Melitta® 12 cup coffee brewer.