Hamilton Beach, Proctor Silex: NACCO, Subsidiaries

Hamilton Beach

Program Overview

Programs for Continuous Cost Reduction

Main Program Areas	Program Objective	Primary Financial Impact	Type of Program	Timing of Benefits
Purchasing and supplier product cost reduction	Lower product costs	Improved gross margins	Profitability	Ongoing, immediate and long-term benefits
Continuous quality improvement	Increase product quality, lower return rates and achieve higher customer satisfaction	Increased revenue and improved gross margins	Profitability	Currently being realized; continuous improvement
Supply chain optimization	Achieve superior customer service to retailers	Gross margin, SG&A and increased revenue	Profitability	2009

Programs to Leverage Innovation

Main Program Areas	Program Objective	Primary Financial Impact	Type of Program	Timing of Benefits
Product development process	Streamline product development; deliver innovative, low-cost products that represent best-in-class performance	Gross margin and SG&A	Profitability	Ongoing; immediate and long-term benefits
New product introductions	Achieve additional retailer placements and customer loyalty; continue product innovation	Revenue and margin enhancement	Growth	Ongoing

Programs for Professional Sales & Marketing

Main Program Areas	Program Objective	Primary Financial Impact	Type of Program	Timing of Benefits
Retailer and channel focus	Maximize retail shelf placements and consumer sales product at top retailers	Revenue and margin enhancement	Growth	Ongoing
Strategic brand application	Provide a broad complement of key brand names targeted at distinct customer segments, such as the Hamilton Beach^® eclectrics^® and Traditions by Proctor Silex^® brands targeting new customer segments	Revenue and margin enhancement	Growth	2009 and beyond

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