Sunbeam 2003 Annual Report Download - page 16

• As of December 31, 2003, we had $125.4 million of cash and cash equivalents on hand and $64.9
million of availability under our debt facility. We are actively seeking acquisition opportunities in
2004 and would use such amounts plus cash generated from our operations and, if necessary,
additional capital raised through financing activities, to finance any such acquisitions.
We intend the discussion of our financial condition and results of operations, including our
acquisition and disposition activities, that follows to provide information that will assist in understanding
our financial statements, the changes in certain key items in those financial statements from year to year,
and the primary factors that accounted for those changes, as well as how certain accounting principles,
policies and estimates affect our financial statements.
Acquisitions and Disposition Activities
We have grown through strategic acquisitions of complementary businesses and expanding sales of
our existing brands. Our strategy to achieve future growth is to acquire new businesses or brands that
complement our existing product portfolio, sustain profitable internal growth and expand our
international business.
On September 2, 2003, we acquired all of the issued and outstanding stock of Lehigh Consumer
Products Corporation and its subsidiary (“Lehigh” and the “Lehigh Acquisition”). Lehigh is the largest
supplier of rope, cord, and twine in the U.S. consumer marketplace and a leader in innovative storage
and organization products and workshop accessories for the home and garage as well as in the security
screen door and ornamental metal fencing market. The purchase price of the transaction was
approximately $157.6 million, including transaction expenses. In addition, the Lehigh Acquisition
includes an earn-out provision with a potential payment in cash or our common stock, at our sole
discretion, of up to $25 million payable in 2006, provided that certain earnings performance targets are
met. Lehigh is included in the branded consumables segment from September 2, 2003.
On February 7, 2003, we completed our acquisition of the business of Diamond Brands
International, Inc. and its subsidiaries (“Diamond Brands” and the “Diamond Acquisition”), a
manufacturer and distributor of niche household products, including plastic cutlery, clothespins,
kitchen matches and toothpicks under the Diamond®and Forster®trademarks. The purchase price of
this transaction was approximately $91.5 million, including transaction expenses. The acquired plastic
manufacturing operation is included in the plastic consumables segment in 2003 and the acquired wood
manufacturing operation and branded product distribution business is included in the branded
consumables segment in 2003.
On April 24, 2002, we completed our acquisition of the business of Tilia International, Inc. and its
subsidiaries (“Tilia” and the “Tilia Acquisition”). We acquired the business of Tilia for approximately
$145 million in cash and $15 million in seller debt financing. In addition, the Tilia Acquisition includes
an earn-out provision with a potential payment in cash or our common stock, at our sole discretion, of
up to $25 million payable in 2005, provided that certain earnings performance targets are met.
Pro forma financial information relating to the Tilia Acquisition, the Diamond Acquisition and the
Lehigh Acquisition has been included in the Consolidated Financial Statements herein.
We also completed two tuck-in acquisitions in 2003. In the fourth quarter of 2003, we completed
our acquisition of the VillaWare Manufacturing Company (“VillaWare”). VillaWare’s results are included
in the consumer solutions segment from October 3, 2003. In the second quarter of 2003, we completed
our acquisition of O.W.D., Incorporated and Tupper Lake Plastics, Incorporated (collectively “OWD”).
The branded product distribution operation acquired in the OWD acquisition is included in the
page 14
Jarden Corporation
Management’s Discusson and Analysis (continued)