NACCO Industries, Inc., (Cleveland, Ohio, U.S.) a holding group whose principal businesses are housewares, lift trucks and mining, announced net income for the first quarter of 2006 of U.S. $12.7 million, or $1.54 per share, compared with net income for the first quarter of 2005 of $5.2 million, or $0.63 per share. Revenues for the first quarter of 2006 were $770.4 million compared with revenues of $727.8 million for the first quarter of 2005.
NACCO's Housewares Group includes electric housewares manufacturer Hamilton Beach/Proctor- Silex (Richmond, Virginia, U.S.) and retail chain Kitchen Collection. The Housewares Group reported a net loss of $1.2 million for the first quarter of 2006 on revenues of $117.9 million compared with a net loss of $1.1 million for the first quarter of 2005 on revenues of $114.8 million.
Revenues at Hamilton Beach/Proctor-Silex increased slightly to $95.5 million in 2006 from $94.6 million in 2005.
Kitchen Collection experienced a 10 percent improvement in revenues to $23.5 million in 2006 from $21.3 million in 2005, due to an increase in the number of stores and increased sales at comparable.
Hamilton Beach/Proctor-Silex reported a net loss of $0.2 million in the first quarter of 2006 compared with net income of $0.1 million in 2005. The Hamilton Beach/Proctor-Silex loss was attributed mostly to advertising expenses supporting a new marketing campaign, and partially offset by the slight increase in revenue.
Kitchen Collection's net loss decreased moderately to $0.9 million in 2006 from $1.2 million in 2005.
Product Introductions Boost Outlook for Housewares
The NACCO Housewares Group is moderately optimistic that markets for its consumer goods will strengthen in 2006 compared with prior years despite Wal-Mart's recently announced inventory reduction program.
However, NACCO warns that current economic conditions affecting consumers, such as increased energy and gasoline costs and rising interest rates could unfavorably affect retail sales of Hamilton Beach/Proctor-Silex products in 2006 and result in reduced customer visits at Kitchen Collection stores.
Continued product innovation, promotions and branding programs at Hamilton Beach/Proctor-Silex are expected to help NACCO Housewares Group strengthen its market positions. NACCO said HB/PS has a strong assortment of new products planned for 2006 and 2007. Introductions planned for 2006 include:
TrueAir(R) Ionic Air Purifier
Big Mouth(R) Juice Extractor
a broad line of new toaster ovens
a redesigned Hamilton Beach(R) BrewStation(R) line, said to be the number one-selling coffeemaker family in America in 2004 and 2005
Materials Costs In 2006
Hamilton Beach/Proctor-Silex expects pricing pressure this year from suppliers, stemming from increased commodity costs for resins, copper, aluminum, and steel, as well as increased transportation costs arising from higher fuel prices. The company will work to mitigate the increased costs through price increases, where justified, and through ongoing programs to enhance product offerings and reduce costs.
Hamilton Beach/Proctor-Silex implemented manufacturing restructuring in 2004 and 2005, and these programs and increased sourcing from China are expected to continue showing cost advantages. Restructuring programs should be mostly completed by mid-2006.
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