Press release·11/08/2024 23:28:35

Overview of the Company’s Financial Performance

The financial report provides an overview of the company’s financial performance for the third quarter of 2024 and the first nine months of 2024, compared to the same periods in 2023. The key highlights are:

• On a consolidated basis, net sales increased by 10% in the third quarter and 5% in the first nine months, driven by strong performance in the Housewares/Small Appliance and Defense segments.
• Gross profit increased by 12% in the third quarter but decreased by 2% in the first nine months, due to higher costs in the Housewares/Small Appliance segment.
• Selling and general expenses decreased by 4% in both the third quarter and first nine months.
• Earnings before provision for income taxes increased by 17% in the third quarter but decreased by 3% in the first nine months.
• Net earnings increased by 15% in the third quarter but decreased by 3% in the first nine months.

Revenue and Profit Trends

The company’s revenue and profit performance was mixed across its three business segments:

Housewares/Small Appliance Segment:

• Net sales increased by 15% in the third quarter and 5% in the first nine months, primarily due to higher unit shipments.
• Gross profit increased by 27% in the third quarter but decreased by 10% in the first nine months, due to higher costs for ocean shipping, repair costs, and changes in accruals.

Defense Segment:

• Net sales increased by 9% in the third quarter and 5% in the first nine months, reflecting higher shipments from the segment’s backlog.
• Gross profit increased by 6% in the third quarter and 3% in the first nine months, due to the higher sales and improved efficiencies.

Safety Segment:

• Due to the startup nature of the businesses in this segment, gross margins were negative in both years.
• Selling and general expenses decreased significantly in both the third quarter and first nine months, reflecting lower personnel and legal/professional costs.

Strengths and Weaknesses

The company’s key strengths include:

• Diversified business model with three distinct segments
• Strong performance in the Housewares/Small Appliance and Defense segments
• Ability to manage costs and reduce selling/general expenses

The company’s weaknesses include:

• Ongoing challenges in the startup Safety segment, with negative gross margins
• Inflationary pressures impacting the Housewares/Small Appliance segment
• Decrease in other income due to lower interest rates

Outlook for the Future

The company expects to continue evaluating acquisition opportunities and making capital investments to support future growth. It has substantial liquidity in the form of cash, cash equivalents, and marketable securities to fund its operations, dividends, and future growth.

However, the company faces risks related to health epidemics, pandemics, or similar public health crises, which could lead to labor shortages, supply chain disruptions, inflationary pressures, and other adverse impacts on the business. The company will need to closely monitor these risks and adapt its strategies accordingly.

Overall, the company’s financial performance was mixed in the third quarter and first nine months of 2024, with strengths in its core business segments but ongoing challenges in the startup Safety segment and external pressures impacting profitability. The company’s strong liquidity position and diversified business model provide a solid foundation for navigating future uncertainties.