CLEVELAND, OH -- Hawk Corp. announced today that net sales for the three months ended Dec. 31, 2009, were $45.6 million compared to $57.9 million in the comparable prior year period, a decline of 21.2 percent. The decrease in sales during the fourth quarter of 2009 compared to the fourth quarter of 2008 was primarily the result of volume decreases, which had remained strong during the fourth quarter of 2008, the company said. However, starting in the second half of 2009, Hawk saw improvements in a number of its markets, particularly in its construction and mining and truck markets.

Total sales were up 4.8 percent in the fourth quarter of 2009 when compared to the third quarter of 2009. Net sales for the full year ended Dec. 31, 2009, were $172.4 million, a decrease of 36.1 percent, from $269.6 million in 2008.

Ronald Weinberg, Hawk's chairman and CEO, said, "As with virtually all segments of the economy, we were affected by adverse business conditions. However, our results were cushioned by our proactive cost-cutting, and the benefit of recession-resistant aftermarket sales of our 'wear-part' friction materials. As a result, we were able to generate cash from operations of $19.2 million and continued to fund important long-term initiatives of the company."

During the fourth quarter of 2009, the company reported net income of $1.6 million, or 18 cents per diluted share compared to $2.4 million, or 26 cents per diluted share, in the comparable period of 2008, a decline of $0.8 million or 33.3 percent. For the year ended Dec. 31, 2009, the company reported net income of $6.4 million, or 73 cents per diluted share, a decrease of $14.4 million, or 69.2 percent compared to net income of $20.8 million, or $2.21 per diluted share in 2008.

Cash and short-term investments decreased $10.2 million to $83.1 million as of Dec. 31, 2009, compared to $93.3 million as of Dec. 31, 2008. During 2009, the company used its cash generated from operations to repurchase $12.6 million of its common stock and $10 million to repurchase a portion of its outstanding senior notes. In addition, the company made a $3.9 million supplemental contribution to its defined benefit pension plans.

The company's total debt of $77.1 million is comprised of senior notes that mature in November 2014. At Dec. 31, 2009, the company's cash and short-term investments exceeded total debt by $6 million.

Weinberg said, "Coming off a challenging year in 2009 which produced significantly lower revenues than 2008 record levels, we expect 2010 to reflect a recovery in the general economy and the markets we serve. As a result, we expect our revenues to be within a range of $190 million and $200 million, which represents an increase of between 10.2 percent and 16 percent from 2009 revenues of $172.4 million."

Weinberg continued, "In 2009, we instituted several cost-reduction initiatives in response to the decline in volumes. To remain competitive with our work force, we expect to reinstate some of the benefits and employee expenses that were frozen or eliminated in 2009. Although we are already beginning to experience a sales rebound in the early months of 2010, we are maintaining a degree of caution with respect to the effect cost increases and product mix will have on our operating margins. Based on these factors, we are forecasting 2010 income from operations to be between $18 million and $19 million, which represents an increase of 7.8 percent to 13.8 percent over 2009 operating income of $16.7 million."

Weinberg continued, "Among the growth initiatives we are pursuing during 2010 is the enhancement of our presence in China via the acquisition of a small supplier and the expansion of our R&D, sales and engineering efforts in that country. Further, we have taken the first steps toward our establishment of a manufacturing presence in India."

The company expects to invest between $8 million and $10 million throughout 2010 in capital projects aligned with its long-term strategic plan. Depreciation and amortization is expected to be approximately $8.5 million. Its 2010 world-wide effective tax rate will be approximately 40 percent.