The heat is on at National Presto Industries, but it's thermostatically controlled for even-cooking on nonstick surfaces. Under the Presto brand, the company makes and distributes small appliances and housewares, including pressure cookers, fry pans, deep fryers, griddles, coffeemakers, can openers, electric knives, and pizza ovens. The company pours itself into defense work, too, supplying ammo; cartridge cases; electromechanical assemblies; and Load, Assemble, and Pack (LAP) setup for regulated goods. Adding to the bottom line, its absorbent products unit makes private label and Presto brand diapers and incontinence supplies. The diversified company counts the US government among its largest customers.
National Presto Industries (NPI) operates three very distinct business segments. NPI's largest business, Defense, accounts for more than 50% of revenues. Its product lineup of 44mm bullets, 40mm grenades, and mk19 machine guns, which is used in Afghanistan and Iraq, is manufactured and distributed by subsidiary AMTEC Corporation (acquired prior to the 9/11 terrorist attacks). The Army and the US Department of Defense (DoD) and their prime contractors are core customers.
Housewares/Small Appliances, represents about 30% of NPI's total sales, while Absorbent Products, brings in the rest.
Sales and Marketing
Wal-Mart Stores accounts for about 10% of the Housewares/Small Appliance segment's net sales in 2012. The US Department of Defense is AMTEC's largest customer. Medline Industries accounted for 12% of the company's Absorbent Products sales in 2012.
NPI's 2012 sales increased nearly 10% vs. 2011, while net income declined 19% over the same period. Defense led the charge with sales up 21% in 2012 vs. 2011, followed by Housewares/Small Appliances with an 11% annual sales gain. Sales of defense and houseware products benefitted from an increase in units shipped.
Performance of the company's Absorbent Products segment in 2012 was all wet, posting a 16% annual decline in sales. The company blamed the decision of its largest customer to build its own absorbent product facility for the drop off in sales. Further sales declines are anticipated.
National Presto adopts a diversified posture for its business strategy. The company's acquisitions have allowed it to move its products outside the small appliance marketplace, minimizing its exposure to the ups and downs of industry and consumer spending cycles. Each business segment serves a market that has weathered the economic downturn triggered in late 2008.
Mergers and Acquisitions
To boost its defense business, National Presto in late 2011 acquired the assets of Arkansas-based ALS Technologies, which generates most of its revenue through sales to law enforcement and corrections facilities. ALS makes smoke and tear gas grenades, specialty impact munitions, diversionary devices, and stun munitions, as well as provides product training.
Maryjo Cohen, company chairman, president, and CEO, owns about 30% of National Presto. She is the daughter of former chairman Melvin Cohen, under whose leadership NPI rolled out numerous consumer gadgets, including some winners (FryBaby and SaladShooter), and some duds (ChipShot potato slicer).