Hamilton Beach/Proctor-Silex, Inc. parent company NACCO Industries, Inc. (Cleveland, Ohio, U.S.) reported a net income for the third quarter of 2005 of U.S. $13.6 million, or $1.65 per share, compared with net income for the third quarter of 2004 of $13.4 million, or $1.63 per share. Revenues for the third quarter of 2005 were $744.3 million, an increase of 11 percent compared with revenues of $668.0 million for the third quarter of 2004.
NACCO is an operating holding company with three principal businesses: housewares, lift trucks (NACCO Materials Handling Group) and mining (North American Coal).
NACCO net income for the 9 months ended September 30, 2005 was $30.1 million, or $3.66 per share, compared with net income of $15.3 million, or $1.86 per share, for the first 9 months of 2004, which included a $9.1 million pre-tax charge, or $5.6 million after a tax benefit, of $3.5 million, recorded in the first quarter of 2004 related to a restructuring program at Hamilton Beach/Proctor-Silex's manufacturing facilities.
The Housewares Group includes small electric housewares maker Hamilton Beach/Proctor-Silex and Kitchen Collection, a U.S. national specialty retailer of brand-name kitchenware, small electric appliances, and accessories. The Housewares Group reported an increase of $1.5 million in net income to $5.9 million for the third quarter of 2005 on revenues of $152.6 million, compared with net income of $4.4 million for the third quarter of 2004 on revenues of $143.7 million.
Revenues at Hamilton Beach/Proctor-Silex increased in the third quarter of 2005 compared with the third quarter of 2004 mainly from improved sales volumes in U.S. consumer and commercial markets.
Kitchen Collection experienced increased sales from new stores in the third quarter of 2005 compared with the same period in 2004, along with an increase in the average sales transaction. However, these increases were offset by reduced customer visits at comparable stores as a result of diminished traffic in areas affected by hurricanes and high gasoline prices. The number of Kitchen Collection stores increased to 194 as of September 30, 2005 from 187 stores at September 30, 2004.
NACCO said the increase in Housewares Group net income in the third quarter of 2005 compared with the third quarter of 2004 was due to an increase in net income at Hamilton Beach/Proctor-Silex, partially offset by a decrease in net income at Kitchen Collection. The increase at Hamilton Beach/Proctor-Silex was mainly attributed to an increase in sales volume combined with lower manufacturing costs as a result of the 2004 restructuring program, a continued shift to sourcing products from China and favorable currency movements.
For the 9 months ended September 30, 2005, NACCO Housewares Group reported net income of $6.4 million on revenues of $399.8 million compared with a net loss of $0.8 million on revenues of $382.7 million for the first 9 months of 2004. Results for the 9 months ended September 30, 2004 included a $9.1 million pre-tax charge, or $5.6 million after a tax benefit of $3.5 million, recorded in the first quarter of 2004 related to the restructuring program.
NACCO Housewares Group is moderately optimistic that markets for its consumer goods will strengthen in the fourth quarter of 2005 and in 2006 compared with prior periods. However, economic conditions like increased energy and gasoline costs and rising interest rates might dampen retail sales of Hamilton Beach/Proctor-Silex products during the 2005 holiday season.
Continued product innovation, strong brands and heightened channel sales programs by Hamilton Beach/Proctor-Silex are expected to help NACCO Housewares Group strengthen its market positions. New products from Hamilton Beach/Proctor-Silex are anticipated to generate additional product placements at retailers and continued margin improvements throughout the fourth quarter of 2005 and in 2006. The new products include the Hamilton Beach(R) BrewStation(TM) Deluxe coffeemaker, the Big Mouth Food Processor(TM), the WaveLogic(TM) and WaveStation(TM) Blenders incorporating new Wave~Action(TM) blending technology, the Change-a-Bowl(TM) Slicer/Shredder, the Toastation(TM), and the new Hamilton Beach(R) Eclectrics(TM) line of electric appliances.
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