Sunbeam 2002 Annual Report Download - page 49

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Jarden Corporation
Notes to Consolidated Financial Statements (Continued)
fulfillment, warehousing, and other services to the retail industry. Pursuant to the agreement, NewRoads agreed
to provide such services to the Company’s home vacuum packaging segment. The agreement expires in three
years unless earlier terminated pursuant to the terms of the agreement and the Company’s subsidiary has the
right to renew the agreement for additional terms of one year. Mr. Franklin’s brother-in-law is the executive
chairman of the board of NewRoads. Mr. Franklin has an indirect ownership interest of less than ½% in
NewRoads.
18. Earnings Per Share
Basic earnings per share are computed by dividing net income by the weighted average number of
common shares outstanding for the period. Diluted earnings per share are calculated based on the weighted
average number of outstanding common shares plus the dilutive effect of stock options as if they were exercised
and restricted common stock. Due to the net loss for 2001, the effect of the potential exercise of stock options
was not considered in the diluted earnings per share calculation for that year since it would be antidilutive.
A computation of earnings per share is as follows for the years ended December 31:
(in thousands, except per share amounts) 2002 2001 2000
Net income (loss) ............................................... $36,309 $(85,429) $ 4,922
Weighted average shares outstanding ............................... 13,940 12,726 12,676
Additional shares assuming conversion of stock options and restricted
stock ....................................................... 452 — 90
Weighted average shares outstanding assuming conversion ............ 14,392 12,726 12,766
Basic earnings (loss) per share ..................................... $ 2.60 $ (6.71) $ 0.39
Diluted earnings (loss) per share ................................... $ 2.52 $ (6.71) $ 0.39
19. Subsequent Event (Unaudited)
On February 7, 2003, the Company completed its acquisition of the business of Diamond Brands, a
manufacturer and distributor of kitchen matches, toothpicks and retail plastic cutlery under the Diamond
®
and
Forster
®
trademarks, pursuant to an asset purchase agreement. The purchase price of this transaction was
approximately $86 million in cash, net of cash on hand at Diamond Brands, paid at closing and a deferred
payment in the amount of $6 million payable in cash or our common stock, at the Company’s election, on or
before August 7, 2003. In connection with this acquisition, the Company amended its New Credit Agreement,
increasing its term loan facility by $10 million and its revolving loan facility by $20 million. The Company used
cash on hand and draw downs under its debt facilities to finance the transaction. As of December 31, 2002,
approximately $1.5 million for an escrow deposit and expenses related to the Diamond Brands acquisition were
capitalized and included in Prepaid Expenses and Other Current Assets in the Consolidated Balance Sheet. The
Diamond Brands plastic manufacturing business will be included in the plastic consumables segment in 2003
and Diamond Brands’ wood manufacturing business and branded product sales will be included in the branded
consumables segment in 2003.
PG. 47