May 20--"Cautious optimism" could best describe the mood Tuesday afternoon during the 104th annual shareholders meeting at Eau Claire-based National Presto Industries.

Maryjo Cohen, president and chief executive officer, described 2008 as the "strongest year in the history of the company." In a national economy fraught with bad news, Presto did not have any job, salary or benefit cuts. However, Cohen cautioned that it's hard to predict what 2009 will bring considering the economic climate and a new administration in the White House

Presto operates in three segments: housewares/small appliances, defense and absorbent products. The company had total net sales of $448.2 million in 2008, a 6.5 percent increase from the previous year and nearly three times the total for 2004. It reported $44.2 million in net earnings for 2008, a 14.4 percent rise.

The company's success has continued in 2009. Presto's net earnings for the first quarter, which ended April 5, were $10.9 million compared with $6.3 million in the year-ago period. Net sales for the quarter increased from $77.2 million to $107.9 million.

Housewares/ small appliances

External net sales in the division rose 4 percent to $136.8 million in 2008. Sales increased 25 percent in the first quarter of 2009 compared with the year-ago period.

"Who would ever believe that the American consumer would once again favor cooking from scratch?" Cohen said.

The sector fared well despite lofty prices for aluminum and other materials. A weak U.S. dollar dented profits by making Chinese products more expensive, and the loss of retailers such as Best Buy and Linens 'N Things was a negative.

Some "green" redesigns and new products were introduced at the meeting. The company is taking measures -- such as distributing handles separately -- to lessen its packaging sizes to reduce waste and save on shipping. Box sizes have been reduced by as much as 45 percent. One participant at the meeting asked whether the assembly of some of the products was difficult.

"I inherited my father's klutziness," Cohen quipped. "I'm the ultimate proof of whether a product can be assembled."

New products include a stainless steel deep fryer -- the QuickCool ProFry -- that has a built-in fan to cut cooling time in half, and a stainless coffee maker for time-constrained consumers that quickly brews up to six cups. There also was a canning kit that includes a retooled digital timer.

Defense

External net sales in the division, which produces 40mm training cartridges, explosive tactical rounds and other items, rose 6 percent to $238.8 million in 2008. Sales increased 52 percent in the first quarter of 2009 compared with year-ago results.

Presto acquired Janesville-based AMTEC about eight years ago when it had $7 million in annual sales.

"We are now at the point where we are operating the equipment efficiently," Cohen said.

The division is in the fourth year of a five-year contract with the federal government, and another contract is expected.

Absorbent products

External net sales in the division rose 12 percent to $72.7 million in 2008. Although it operated at a loss, its loss was reduced by about 56 percent from the previous year. The segment recorded a slight profit for the first quarter of this year.

The primary materials used for the product are oil and paper pulp; the cost of both surged in 2008.

A redesign of its adult briefs launched at the start of the second quarter will make the product more absorbent and easier to produce. Cohen said a key issue is the division's customer base, as negotiations with its top client for a multiyear contract have not yet been resolved.

Cohen, who also serves as company chairwoman, was re-elected to a three-year term on the board Tuesday as the only member up for election. The event also paid respects to her father, Melvin Cohen, who joined Presto in 1944 and spent much of a long career as head of the company. He died in December.

"We do miss him, but we certainly plan to keep his legacy alive and well," Maryjo Cohen said.

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