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ANNUAL REPORT
FY 2021
Providing the world with a variety of premium, customer-focused sensors
that keep pace with trending technology and withstand the test of time
TABLE OF CONTENTS
2013
2014
2015
2016
2017
2018
2019
2020
2021
Earnings
$199.2 million
2013
to shareholders
through dividends
and share
repurchases
$4.19 million
2021
$99.24 million
Net Sales
2021
$522 million
2019
$344.1 million
2017
$285.5 million
2015
$174.3 million
2013
$101.1 million
Andrea DiLenge
Chief Executive Officer (CEO)
January 31, 2022
The impacts of these initiatives has improved the overall quality of our products while reducing the
time and resources required to design, manufacture, warehouse and ship goods.
Innovative input from customers, employees and shareholders will help continually invigorate our
perspectives and engage our creativity on further TQM and sustainability implementation. Ultimately,
by producing fewer toxic by-products, promoting recycling and other material use efficiencies, and
lessening our impact on the environment, we are able to provide our customers, our organization, and
our planet with a more sustainable company for years to come.
Low
Low segment sensors offer the lowest priced and most reliable products on the market. Baldwin
Company's most popular product, Bead, was strategically positioned at 5.0 and sized at 15.0 in 2018 to
allow it to hit a prime age of 7 years in 2020. Allowing Bead to drift for 2021 allowed the product to
maintain its tenured age while still remaining within customers fine-cut positioning circle.
Bead 2021
Positioning
High
Consumers seeking cutting-edge size and performance technology in their sensors tend to prefer the
high segment products. Through avid research and development, Baldwin Company's high segment
sensor, Bid, was able to provide ideal positioning of 16.1 and ideal size of 3.9 at a young product age of
1.5 years by December 31, 2021.
Bid 2021
Positioning
Performance
Products in the performance segment are tailored to customers requiring highly reliable, innovative
technology in their sensors. Baldwin maintains two performance products, Bold and Bliss. Both
products are revised annually to maintain the highest level of performance available in the
marketplace. During 2021 Bold maintained positioning of 17.2 and size of 10.6, while Bliss was
positioned at 17.4 and sized at 10.4; both products upheld an MTBF of 27000, thereby maximizing
each products performance length.
Bold 2021
Positioning
Bliss 2021
Positioning
Size
The size segment offers advanced technology products with increasingly efficient size characteristics.
Buddy, Baldwin's size sensor, was positioned at 9.6 and sized at 2.6, meeting ideal customer
preferences within the segment for the year. Additionally, Buddy achieved prime age of 1.5 years
during 2021.
Buddy 2021
Positioning
Product Name
Primary Segment
Performance
Size
Baker
Traditional
11.3
8.7
Bead
Low
6.2
13.8
Bid
High
17.0
3.0
Bold
Performance
18.2
9.9
Buddy
Size
10.3
1.6
Bliss
Performance
18.4
9.7
MARKETING
For fiscal year ending 2021, Marketing focused our strategy solely on increasing current market share.
We concentrated our efforts on identifying competitive weaknesses through competitive intelligence
reporting, forecasting accurately to meet excess demand, achieving high customer survey scores to
increase product appeal, and maintaining 100 percent awareness and accessibility through our sales
and promo budgets.
Overall, Baldwin Company increased market share by 5.24% over prior year, and ranked as one of our
best years of performance thus far.
Competitive Intelligence Factors
Year-in and year-out, Baldwin Company products lead most segments and have traditionally captured
a strong majority of competitors lost or missed sales opportunities. In 2021, Baldwin Marketing
Department identified that the Low-End segment had a significant opportunity to increase market
share within this particular segment. Andrews Company was underperforming by roughly 5%, and
Ferris Company was picking up the majority of those lost sales. Bead, our Low-End product, was
scheduled to hit the ideal age, was competitively priced, had a modest reliability, and the overall
appeal for Bead in the coming year was high. This was the year to produce double our normal capacity,
in hopes of capturing Andrews Companys lost sales.
We are pleased to report that this strategy paid off, and Bead saw a 9.8% increase in demand over
prior year; 7.0% of that increase was picked up from competitors missed sales.
Accurate Forecasting
Marketing continued to forecast a best case scenario for Production and a worst case forecast for
Finance. Employing this forecasting technique has successfully allowed Baldwin to capitalize on picking
up lost sales from our competitors, while financing for the possibility of carrying bloated inventories.
Marketing has routinely met at least 95% of demand annually with this forecasting technique.
Pricing & Customer Survey Scores
Baldwin continued to maintain its premium pricing structure in the High-End, Performance, and Size
segments. However, Marketing has noticed that customer survey scores are showing a somewhat
decreasing trend. To address this, Marketing reduced product prices by $0.50 - 1.00 in each segment.
Although our customer survey scores continue to trend slightly downward, our customer survey scores
still maintain a satisfactory, respectable range.
Potential
Market Share in
Units
21.1%
27.5%
21.6%
50.8%
41.8%
Actual Market
Share in Units
21.1%
34.5%
25.2%
54.4%
50.4%
PRODUCTION OVERVIEW
Throughout fiscal year ending December 31, 2021, Production focused on many of the same concepts
that have remained priorities over the past eight years. Our primary objective was to reduce variable
costs; through continued collaboration with R&D, TQM and HR, material and labor costs were
consistently reduced. The following chart shows the steady downward trend in combined costs over
the last eight years:
Another main focus for the Production department during FY2021 was to work closely with Marketing
in order to tightly align capacity with the annual sales forecast. Baldwins goal is to consistently remain
in the 120-160 percent overall plant utilization target range.
10
Production strategies for 2022 are to continue working closely with R & D, Marketing, and Finance to
ensure that production is prepared for changes in capacity and new product offerings. Technological
advances and associated benefits will be considered annually, and implemented to segments if they
provide the greatest return on investment. Our diversification strategy necessitates development of
new products and constant improvement to existing products. Baldwin will continue to invest heavily in
plant capacity to keep our product fresh and unique. Plant expansions will be aligned with Finances
projections for growth and stability.
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Future HR objectives will include ongoing recruitment of highly skilled, productive workers.
Furthermore, Baldwin will continue to provide 80 hours of annual training per employee, thus
increasing productivity, employee satisfaction, and turnover reduction. When automation is
considered we will thoroughly analyze the impact of proposed decisions on employee turnover and
return on investment (ROI) in order to assure no negative tradeoff exists between workforce reduction
and unnecessary automation.
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FINANCIAL INFORMATION
For fiscal year ending 2021, Finances strategy was to increase leverage and free cash flow all while
maintaining a healthy market capitalization, profit and share price. By focusing more on increasing
leverage and free cash flows, it showed that a few of finances other ratios would decrease. This didnt
seem to stop the Baldwin Company from succeeded overall and still become ahead of the rest of the
competition.
Overall, the Baldwin Company succeeded in maintaining a healthy market capitalization even though it
dropped in the last few years. This decrease was due to the large dividend payouts and stock
repurchases made in an effort to reduce shareholder risk and creating more current and long term
debt. Shareholder information is shown in more detail on page 18.
Financial Performance Measures
The finance departments performance measures consisted of emergency loans, the type of debt
issued, positive cash flow, leverage and healthy stock prices and market capitalization.
Emergency Loan
The Baldwin Companys main finance objective was to never have an emergency loan and we have
succeeded with this performance measure through fiscal year ending 2021. Throughout the years we
are in business, it is our determination and standard to never have an emergency loan and continue on
our path of growth.
Debt Issued Current/Long Term Debt
Our measure is to keep our current debt to a minimum and issue long term debt when needed.
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Leverage
Leverage is a very important measure for the Baldwin Company because it ensures stockholders do not
take full risk for financing company, and the company issues enough long-term debt to maintain a
healthy ratio between liabilities and equity. Our goal is to have our leverage a healthy ratio of 1.5 2.0.
Baldwin Company finally achieved this success during fiscal year 2021.
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FINANCIAL STATEMENTS
15
16
17
Market Capitalization
Since the startup of Baldwin Company, market capitalization has been used as a performance measure
and is determined by multiplying shares outstanding by stock price. After fiscal year 2021, Baldwin
Company is determined to watch our market capitalization grow by our stock price increasing.
2013 - 2,000,000
2014 - 2,399,957
2015 - 2,879,929
2016 - 3,455,915
2017 - 4,147,098
2018 - 4,774,273
2019 - 4,774,273
2020 - 4,536,783
2021 - 4,536,783
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Shareholders
As of December 31, 2021, there are 4,536,783 shareholders of The Baldwin Companys common stock.
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LOOKING AHEAD
Baldwin Company made many achievements during the fiscal year ending December 31, 2021 by
closely following our broad differentiation strategy. Our diverse product selections lead every segment
in sales, we experienced an overall increase in market share of 5.24% over prior year, and we posted
record-breaking profits. Additionally, we paid our stockholders a dividend of $16.05 per share,
achieved our target leverage goal of 1.5, and increased our productivity index by 2.1%.
Looking ahead, Total Quality Management will welcome and encourage innovative input from
customers, employees and shareholders in order to continually revitalize our sustainability
perspectives. Baldwin Company will strive to continue reducing production of toxic by-products and
promoting recycling and other material use efficiencies within the organization. By lessening our
impact on the environment, we can better sustain our company for years to come.
The Research and Development Department will continue to keep products fresh and exciting with
ideal product specifications unique to each segments consumers. Our Marketing team will work
closely with R&D to introduce a new product in the Size segment in order to take advantage of the lack
of competition currently in that sector.
The summation of Marketings specific, measurable future goals are to:
Carefully position production capacity, so that first round capacity is never below 100%.
Maintain an overall plant utilization of 130-160%.
Increase sales/employee to above minimum threshold
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Lastly, the Finance Department set forth the following performance measures to ensure benchmarking
of our success and the continuous improvement needed for long-term prosperity:
Ensure stockholders do not take full risk for financing company by issuing enough long-term
debt to maintain a healthy ratio between liabilities and equity.
Consistently increase leverage to a healthy ratio of 1.5 2.0.
Ensure minimum amount of current debt is issued.
Ensure an emergency loan is never needed by maintaining a closing cash position between
three and eight percent.
Maintain an annually increasing, positive cash flow.
Ensure growth in stock prices and market cap.
With an ongoing commitment to our customers and staff, Baldwin Company will continue to maximize
our potential and profits. We look forward to your continued loyalty and support, as we continue to
grow and prosper into the future.
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TERESA JENSEN
CHIEF FINANCIAL OFFICER/TOTAL
QUALITY MANAGMENT
What an amazing adventure this simulation was. It was the most
educational, exhilarating, and at times, frustrating simulation I have ever
played. The business world is not cut and dry and I think the simulation
did an excellent job of proving that. The simulation as a whole made me
consider the impact of my decisions on other departments; the Total
Quality Management (TQM) module in particular, was what made the
impact of my decisions most apparent. The simulation also taught me
that no matter what decision you made this round (year), you have a
chance to offset the negative affects if you are part of group that really
pays attention to all internal and competitor moves. Lucky for me, my
team was amazing and worked very well together. Of course we had our
disagreements, arguments and at times probably didnt like each other
much but that never affected the mutual respect given to each team
member throughout the game.
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JOY KLUSHKAN
CHIEF OPERATIONS OFFICER/
HUMAN RESOURCES
Essential to the success of any accomplished business is a first-rate
management team, which is made up individuals that are
knowledge seekers, who have STRONG core values and work ethic.
These traits are what made Baldwin the team to beat; therefore
the first thing I learned is pick your partners carefully. The second
thing that I learned is share, share, share; because of this desire to
share what we knew, or in some cases what we didnt know, we all
grew, making our team even stronger. I also learned that
challenging circumstances help you grow and sticking to your
strategy and never losing sight of your goal will make your team or
business unbeatable.
AMBER BURTON
CHIEF RESEARCH & DEVELOPMENT
OFFICER/WEB SITE
COORDINATOR/EDITOR IN CHIEF
Nothing could have prepared me for how incredibly amazing and
enriching this simulation was for me. The Capsim simulation
successfully emulated the entire business process from beginning to
end and truly helped me understand how the right staff can make a
business prosper by pulling together and effectively balancing
common tradeoffs that exist in business. Learning to work
collaboratively with three other teammates for several weeks was
quite the unique experience. I feel extremely lucky to have spent my
last semester running a successful, thriving business with such an
intelligent, hard-working group of women. Constructive criticism was
always given and it helped us come together as a team and
continuously make improvements along the way. By the end of the
competition, we ran like a well-oiled machine and problem-solving
seemed much more streamlined. I couldnt have asked for a better
group of executives to run Baldwin Company with and appreciate
what a wonderful opportunity it was to work with them.
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CONTACT INFORMATION
aldwin Company
5364 Sensor Avenue
Seattle, WA 98060
http://www.baldwincompany.com
Tel: 1-800-BALDWIN
EXECUTIVE STAFF MEMBER
PHONE EXTENSION
E-MAIL ADDRESS
Andrea DiLenge
1420
adilenge@baldwin.com
Teresa Jensen
1520
tjensen@baldwin.com
Joy Klushkan
1320
Jklushkan@baldwin.com
Amber Burton
1220
aburton@baldwin.com
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