National Presto Unloads A Mixed Q1

  • Posted by
  • on May 3rd, 2011

In a world of crappy economies, military conflict and political waffling, one company seeks to profit from it all:  National Presto!

+   + = WIN?


We have been following $NPK for about 2.5 years now, and they have been one of the more consistent players in the BeanScreen over that time when it comes to their overall fundamentals.  Last Friday they released their Q1 earnings report and it looked something like this:

  • net income fell 14% to $11.4mil
  • net sales increased 2% to $108.9mil
  • Housewares/Small Appliance segment sales declined 6.6% and earnings declined 35.5%
  • Defense segment sales increased 4.7% and earnings increased 5.5%
  • Absorbent Product segment sales increased 8.4% and earnings decreased 76.2%

Company President and CEO Maryjo Cohen explained the ho-hum results as being due in large part to the weak sales and earnings from the appliance segment.  This was “because of comparisons with sales following the 2009 Christmas, when low inventories prompted strong orders from retailers looking to replenish supplies.  Defense segment and absorbent products segment sales, however, increased for the quarter, driving overall sales growth.” The big decline in the Absorbent Product segment’s earnings was due to higher material and freight costs, as well as a fire at their facility which “also served to depress the segment’s earnings in the form of lost burden absorption.” Wow!

It’s not surprising though that the more consumer discretionary part of their business (toasters, griddles, popcorn poppers, etc.) was down, with the citizenry continuing to keep a close eye on their pocketbooks.  But when it comes to the bare necessities, the other two segments did okay, minus The Fire Incident.  Adult diapers aren’t something you can really put off buying when nature comes a calling at that sudden, unplanned and most inconvenient moment.  Nor is ammunition when we’re having to fight skirmishes all around the world.


1 year chart (Y! Finance)


Going into this Q1 report, our price target for initiating a position in NPK was around $100.  We should have the all the new earnings data uploaded into the BeanScreen in the next few days, and so long as the fundies remain healthy and valuations attractive, we’ll probably stay with that entry target.  Stay tuned….


sources: National Presto posts lower 1Q profits | The Business Journal



disclosure: we currently do not have a position in NPK



The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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