Hamilton Beach 2012 Annual Report Download - page 19

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17
Hamilton Beach Brands
2012 Results. HBB came back
strong in 2012 following a challenging
2011. While weak consumer demand in
2011 continued to reduce sales volumes
in the first half of 2012, primarily at
the U.S. mass-market consumer retail-
ers, HBB’s success at selling products
with higher price points offset these
volume declines in the latter part of
the year. The company gained further
ground during the fourth-quarter
holiday-selling season with strong place-
ments and promotions at key retailers
that increased volumes substantially,
ending 2012 with substantially higher
sales volumes in the U.S. consumer
business than in 2011. Sales of higher-
margin products throughout the year
and moderating commodity costs in
the back half of the year allowed the
company to offset some of the margin
pressure created by higher product costs
in the first half of 2012 and increased
employee-related costs, resulting in
HBB maintaining its operating profit
margin compared with 2011. Overall,
revenues increased to $521.6 million in
2012 from $493.0 million in 2011 and
net income improved to $21.2 million
in 2012 from $18.4 million in 2011.
In addition, HBB ended the year with
improved cash flow before financing
activities of $24.2 million compared
with $20.5 million in 2011.
Outlook for 2013. The overall
retail market for higher-end small
kitchen appliances has recently shown
some signs of softening while the
middle-market portion in which HBB
participates is relatively flat. HBB’s
target consumer, the middle-market
mass consumer, continues to struggle
with financial and economic concerns,
and consumer confidence does not
appear to be as high as it was in 2012.
As a result, sales volumes in the middle-
Housewares
Left: Hamilton Beach Brands’ newest products include, clockwise from top: Hamilton Beach® BrewStation® 12-cup coffeemaker with removable reservoir, Hamilton
Beach® Big Mouth® Pro juice extractor, Hamilton Beach® Stay or Go® 4-quart slow cooker, Hamilton Beach® Smoothie Smart™ Blender and Hamilton Beach® Digital
Simplicity™ Rice Cooker and Steamer.
Above: New display layouts and signage at Kitchen Collection’s Le Gourmet Chef® store in Aurora, Ohio. Le Gourmet Chef® stores feature brand-name kitchenware
and gourmet foods.