Hamilton Beach 2012 Annual Report Download - page 25

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Kitchen Collection also expects
to explore other growth opportunities.
The company expects to increase the
role of regional assortments by tailoring
store merchandise to local tastes and
to test distribution of new product
categories such as textiles and gourmet
foods. In addition, the company is
pursuing strategies to enhance its
e-commerce and mobile technology
capabilities to ensure it is meeting
the needs of its consumers regardless
of whether shopping occurs in the
company’s stores or on its websites.
Through the execution of its ini-
tiatives, the Kitchen Collection®stores
are expected to achieve higher margins
in 2013, but are still not expected to
achieve the long-term operating margin
target of 5 percent in the immediate
future. Le Gourmet Chef®stores are
not expected to achieve target margins
unless sales volumes per store increase
and until additional underperforming
stores are closed.
Conclusion and NACCO
Outlook. The most significant event
in NACCO’s 100th year was the spin-
off of Hyster-Yale Materials Handling.
The new NACCO Industries that
remains has substantial opportunities
for growth and profitability as it moves
on to its second 100 years. NACCO is
confident that each subsidiary has the
right initiatives in place both to grow
and to achieve its long-term financial
objectives. Growth opportunities are
particularly significant at the NACoal
and HBB businesses, although both will
be prudent in their implementation.
Kitchen Collection is concentrating on
ways it can improve by thoughtfully
identifying what is and what is not
working at each format and making
appropriate changes. Each subsidiary
has benefited from previous programs
put in place which, when combined with
the new strategic growth initiatives
being implemented, should move each
business forward on a growth path.
In 2013, overall consolidated
income from continuing operations
is expected to increase moderately
compared with 2012, primarily because
Kitchen Collection is expected to
improve to modest net income in 2013.
The housewares market is expected to
remain challenging for both HBB and
Kitchen Collection, but the Company
is hopeful consumer confidence and
financial position will improve and
that customer visits, number of trans-
actions and sales per transaction will
consequently improve at mass-market
retailers and outlet malls. Comparable
results are expected at HBB as higher
expenses associated with implementing
its strategic initiatives are expected to
offset the gross margin effect of antici-
pated top-line growth. Finally, while an
expected increase in tons delivered and
lower operating expenses in 2013 are
expected to lead to improved operating
results at NACoal, the absence of gains
from asset sales in 2012 is expected to
result in slightly decreased net income
in 2013 than in 2012. NACCO expects
an overall increase in cash flow before
financing activities in 2013 compared
with 2012.
O
We would like to welcome James
Ratner and David Williams, both of
whom joined our Board after the spin-
off of the materials handling business.
We are privileged to have them on
our Board.
In closing, we would like to thank
all of our subsidiaries’ customers, retail-
ers and suppliers, and all of NACCO’s
stockholders, for their continued sup-
port. Most importantly, we would also
like to thank all employees of NACCO
and its subsidiary companies for their
continued hard work and commitment
to achieving the successes and meeting
the challenges of 2012. We continue to
have great confidence in the manage-
ment teams leading each of our sub-
sidiaries and the parent company. Our
many experienced and highly motivated
professionals worked successfully to
transform NACCO through the spin-off
of Hyster-Yale, secure two new mining
projects for North American Coal, over-
come challenges in the Housewares
market and deliver the Company’s
solid financial results in 2012. We
are confident they can successfully
implement their respective strategic
initiatives to propel the Company
into our next 100 years.
Alfred M. Rankin, Jr.
Chairman, President and Chief Executive Officer,
NACCO Industries, Inc.
Gregory H. Trepp
President and Chief Executive Officer,
Hamilton Beach Brands, Inc.
Chief Executive Officer, The Kitchen Collection, LLC
Robert L. Benson
President and Chief Executive Officer,
The North American Coal Corporation
Richard R. Chene, Jr.
President, The Kitchen Collection, LLC