Hamilton Beach 2010 Annual Report Download - page 8

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of continuing uncertainty regarding the pace and
sustainability of the market recovery. However, market
improvements, NMHG’s programs and substantial
operating leverage have established a strong platform
for achieving its operating profit margin target when
the market does peak. As each of NACCO’s subsidiaries
proceeds with specific programs designed to achieve
its targets and market conditions continue to improve,
the Company expects that its subsidiaries’ operating
fundamentals will position each to achieve its long-
term financial goals.
NACCO Materials Handling Group
2010 Results
The lift truck market experienced unprecedented
declines in 2008 and the first half of 2009. In 2010,
however, the market turned up significantly. While
NMHG’s primary markets are still at lower-than-
prerecession levels, the upturn occurred earlier and
more vigorously than NMHG expected. The recovery
in 2010 resulted in a 22 percent increase in revenues
from $1.5 billion in 2009 to $1.8 billion, which was
driven by a 44 percent increase in new unit shipments,
as well as increased part sales. These improved
volumes, combined with the results of programs put in
place to counter the 2008-09 downturn and strategic
programs initiated earlier, helped drive the substantial
improvement in results from a net loss of $43.1 million
in 2009 to net income of $32.4 million in 2010. While
NMHG generated strong cash flow before financing
activities of $39.0 million in 2010, the amount was
significantly below 2009 since working capital needs
were increasing rather than declining.
The market turnaround resulted in a number of
other positive developments during the year. In the
first half of 2010, a substantial backlog developed and
lead times became longer than normal. In the second
half, increases in plant workforce levels and added
shifts for certain manufacturing operations increased
production, particularly in the fourth quarter, with
the result that the backlog and lead times were slightly
reduced by the end of the year. Although the company
continued to exert tight control of expenses and capital
expenditures throughout 2010, employees’ salaries,
which had been reduced in 2009, were gradually
restored during the course of the year. In 2010, NMHG
continued to strengthen its distribution network by
divesting all but one of its remaining owned retail
dealerships to independent owners, adding strong
independent dealers in the United Kingdom and
Russia and generally consolidating its global distribu-
tion network. Major enhancements were also made to
NMHG’s product lines. All of these factors, combined
with NMHG’s aggressive actions to help dealers
significantly reduce inventories at the beginning of
the downturn, allowed the company to gain market
Left: Yale’s new electric-rider lift truck series, the
Yale® ERP-VF four-wheel (left) and ERP-VT three-wheel
(right) pneumatic tire series, have lifting capacities of
3,000 to 4,000 pounds. These trucks have been designed
for overall productivity at lower costs.