National Presto: See what's cooking

Paul Rolfes | Sep 19, 2008 6:20am EDT | Comment

Rating: Unrated [rate it]

Many companies are under pressure, taking heat from shareholders to deliver profits in a sour economy. If there’s one thing that National Presto Industries (NYSE:NPK) does well is handle the heat — and pressure.

Based in Eau Claire, Wis., National Presto began in 1905, making pressure canners for the canning industry. It has evolved into a manufacturer of reasonably priced products that end up in many home kitchens.

Shares of National Presto have risen 47% year to date, 11% in the past three months. On Sept. 9, the stock hit an all-time high of $80.05, after dropping to a recent low of $46 on Jan. 22. National Presto closed Thursday at $74.60.

Despite the visibility of its consumer products, National Presto stock flies under the investment community’s radar — even though it’s traded 39 years on the Big Board. Its largest institutional holders include Royce & Associates, with about 11.8% of outstanding shares, and Barclays Global Investors UK Holdings and Dimensional Fund Advisors, each with about 5.3% of the stock.

Heading up the company is Maryjo Cohen, who joined National Presto in 1976. She was appointed president in 1989, chief executive in 1994 and board chairman in 2002.

National Presto, which started as Northwestern Steel and Iron Works, is best known for its multitude of portable electric appliances and housewares, most of which are made overseas. Known as National Presto for 55 years, it gained prominence with its cutting-edge devices that eased the burden of the post-war homemaker — World War I and II.

Some Presto accomplishments include home-sized pressure cookers; a steam iron that could use tap water instead of distilled; immersible electric frypans; and the electric percolator. Later, it developed deep fryers, burger cookers, popcorn makers, pizza cookers and the ubiquitous SaladShooter.

National Presto’s products extend beyond SaladShooters to real shooters — its defense unit makes ammunition, with several long-term military contracts. National Presto reported an order backlog of $230 million at the end of 2007. Sales increased 77% to $224.4 million in 2007, outdistancing housewares sales of $131.3 million.

Another unit makes disposable diapers and incontinence products. Absorbent product sales grew 22% to $65.1 million last year.

Demand is highest during the holiday season for its home products. Wal-Mart Stores (NYSE:WMT) accounted for 11% of National Presto’s housewares sales last year, although that was down from 15% in 2006.

For the three months ended June 29, National Presto reported its sales grew 15.5% to $111.1 million, as net earnings climbed 38% to $9.6 million, with earnings per share of $1.40, compared with the year-ago $1.02.

Last year, National Presto reported a 39% jump in earnings to $38.6 million, as sales climbed 38% to $420.7 million. However, rising costs and a weak dollar hindered housewares growth. Earnings per share rose to $5.65, from $4.09 a year earlier.

National Presto seemingly has put behind a lingering battle with regulators over whether it had to register as a mutual fund, because its investment securities accounted for more than 40% of assets. An appeals court sided with the company. The company restated results for 2003 and 2005 after new audits found incidents of lax internal controls.

Past problems aside, with its ammunition business playing an increasing role in its bottom line, along with its traditional line of products for the home, National Presto could be cooking up ways that give investors a bang.