CLEVELAND–The Hamilton Beach unit of NACCO Industries reported a net loss of $2.8 million for the first quarter, compared with a net loss of $100,000 for the prior year.
According to a statement from NACCO, the loss resulted from lower sales volumes and increased product costs that were not fully offset by price increases. In addition, Hamilton Beach’s bottom line suffered from increased interest expense, which was primarily due to an increase in borrowings related to a special cash dividend of $110 million paid out in May 2007.
First-quarter sales at Hamilton Beach were $95.2 million, down 1.6 percent from the 2007 first quarter. The unit’s operating loss of $2 million compared with an operating profit in last year’s first quarter of $700,000.
“Hamilton Beach expects 2008 to be a very difficult year, with results … well below those in 2007,” the NACCO statement said. Not only will the lagging U.S. economy dampen the brand’s results, but so will “significant pricing pressure from suppliers … due to increased commodity costs for resins, copper, steel, aluminum and an appreciating Chinese currency.”