Hamilton Beach, the small appliance business of holding company NACCO Industries, had a net income of $5.6 million in the third quarter of 2010 compared with net income of $6.9 million in 2009. The decline was primarily the result of higher employee-related costs due to the full restoration of certain compensation and benefits that were reduced in the first nine months of 2009.
3Q 2010 revenues increased 12% compared over 2009 on increased unit sales volumes of products at lower average selling prices mainly in the U.S. consumer retail market.
Hamilton Beach 3Q revenues were $133.3 million, compared to $118.9 million in 3Q 2009. Operating profit was $10.9 million for the quarter, compared to $13.5 million in 3Q 2009.
For the first nine months of 2010, Hamilton Beach reported net income of $12.8 million on revenues of $339.2 million compared to net income of $13.0 million on revenues of $320.3 million for the first nine months of 2009.
NACCO said Ham Beach's market, small electrical appliances, continues to recover. With strong placements and promotions in place for the holidays, the company's statement said it "is moderately optimistic that markets for its consumer goods will strengthen further in the remainder of 2010 compared with 2009."
Ham Beach is focusing on product innovation to strengthen its place in the market, and plans promotions for proven successful lines. It will also launch Melitta-branded beverage appliances in 4Q 2010 and has other introductions planned before the end of the year, and these introductions are expected to increase revenues. Hamilton Beach therefore anticipates 4Q revenues will be higher than 4Q 2009.
It noted, however, that the "pace and sustainability of the upturn remains uncertain," with consumers still struggling with financial concerns and high unemployment. NACCO said that Ham Beach 4Q 2010 net income and full year cash flow are expected to be strong but lower than in 2009.
NACCO is still feeling the financial impact of its unsuccessful attempt to acquire small appliance maker Applica in 2006. The company's NACCO and Other business segment, which includes parent company operations, had a 3Q net loss of $6.1 million compared to a net loss of $1.5 million in 2009. The increase in the net loss is mostly from litigation expenses over the failed Applica transaction and an increase in employee-related expenses from the partial restoration of compensation and benefits reduced in 2009.
Applica became a subsidiary of Salton, which merged last year with Russell Hobbs to become Russell Hobbs, Inc.
NACCO Industries as a whole reported consolidated net income of $13.5 million, or $1.62 per diluted share, for the third quarter of 2010 on revenues of $664.9 million, compared with a consolidated net loss for the third quarter of 2009 of $3.9 million, or $0.47 per diluted share, on revenues of $527.8 million. The NACCO Materials Handling Group showed a 3Q net income of $3.8 million, compared to a net loss of $22.4 million in 3Q 2009. The company's North American Coal business reported 3Q 2010 net income of $11.0 million; income from continuing operations in 3Q 2009 was also $11.0 million.
Kitchen Collection, NACCO's retail chain selling kitchen accessories and housewares, reported a net loss of $0.1 million in 2010 compared with net income of $0.3 million in 2009.
NACCO Industries as a whole reported consolidated net income for the nine months ended September 30, 2010 of $41.1 million, or $4.93 per diluted share, on revenues of $1.8 billion. This compared with a consolidated net loss of $11.4 million, or $1.38 per diluted share, on revenues of $1.6 billion for the first nine months of 2009.
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