Hamilton Beach 2012 Annual Report Download - page 20

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market portion of the U.S. small kitchen
appliance market are projected to grow
only moderately in 2013 compared
with 2012. International and commer-
cial product markets are expected to
continue to grow reasonably in 2013
compared with 2012.
HBB continues to focus on strength-
ening its North American consumer
market position through product inno-
vation, promotions, increased placements
and branding programs, together with
appropriate levels of advertising for the
company’s highly successful and inno-
vative product lines. Particular focus is
being placed on single-serve coffee prod-
ucts such as The Scoop®and FlexBrew
TM
.
HBB expects The Scoop®, the Two-Way
Brewer and the Durathon
TM
iron product
line, all introduced in late 2011, as well
as the FlexBrew
TM
, launched in late
2012, to continue to gain market posi-
tion as broader distribution is attained
over time. The company is continuing
to introduce innovative products in
several small appliance categories. In the
first quarter of 2013, HBB expects to
launch the Hamilton Beach®Breakfast
Sandwich Maker, which provides an
innovative and convenient way for con-
sumers to cook breakfast sandwiches
quickly at home. These products, as well
as other new product introductions in
the pipeline for 2013, are expected to
increase both revenues and operating
profit. As a result of these new products,
the company’s improving position in
commercial and international markets,
and execution of the company’s strategic
initiatives, HBB expects to increase
volumes and revenues in 2013 compared
with 2012 at more than the 2013 mar-
ket forecast rate of increase.
Overall, HBB expects full-year 2013
net income to be comparable to 2012 as
anticipated increases in profit from
increased revenues are forecasted to be
largely offset by expected increases in
operating expenses to support HBB’s
strategic initiatives. Product and trans-
portation costs are currently expected
to remain comparable to 2012. HBB
continues to monitor commodity costs
closely and will adjust product prices
and product placements, as appropri-
ate, if these costs increase more than
anticipated. HBB expects 2013 cash
flow before financing activities to be
moderately lower than in 2012 due to
increased working capital needs.
Longer-Term Perspective.
HBB’s vision is to be the leading
designer, marketer and distributor of
small electric household and commercial
appliances sold worldwide under strong
brand names and to achieve profitable
growth from innovative solutions that
improve everyday living. To achieve this
vision, HBB will focus on five strategic
growth initiatives, each of which is
described separately below:
1. Enhancing placements in the
North American consumer business
through consumer-driven innovative
products and strong sales and market-
ing support. The company’s product
and placement track record is strong
due to innovation processes centered
on understanding and meeting end-user
needs. In the North American consumer
market, HBB believes it has a stronger
and deeper portfolio of new products
than its competitors. HBB expects its
product pipeline in 2013 and beyond to
be at or above already increased 2012
levels, with strong brands and best-in-
class products.
2. Enhancing Internet sales by
providing best-in-class retailer support
and increased consumer content and
engagement. In the past few years,
Internet sales have grown significantly
in all product areas. Small kitchen
appliances are no exception. During
2012, 18 percent of small kitchen appli-
ances were purchased online. Retailers
are looking for partners that can pro-
vide not only products, but also new
capabilities and support for promotion,
marketing and distribution programs.
As consumers’ shopping habits evolve
to rely more on the Internet, HBB is
focused on being the leading partner to
its retailers and by increasing engage-
ment with end users by enhancing its
Left to Right: Melitta 10-cup thermal coffeemaker, the newest version of the Durathon™ Digital Iron with
Durathon™ Nonstick Soleplate, Hamilton Beach® Tournant™ high-performance commercial food blender
and The Scoop® single-cup coffeemaker.