Sunbeam 2003 Annual Report Download - page 17

Jarden Corporation
Management’s Discusson and Analysis (continued)
branded consumables segment from April 1, 2003. The plastic manufacturing operation acquired in the
OWD acquisition is included in the plastic consumables segment from April 1, 2003.
The results of VillaWare and OWD did not have a material effect on our results for the year ended
December 31, 2003 and are not included in the pro forma financial information presented in Item 8.
Financial Statements and Supplementary Data.
Effective November 26, 2001, we sold the assets of our Triangle, TriEnda and Synergy World plastic
thermoforming operations (“TPD Assets”) to Wilbert, Inc. for $21.0 million in cash, a non-interest
bearing one-year note (“Wilbert Note”) as well as the assumption of certain identified liabilities. The
Wilbert Note of $1.6 million was repaid on November 25, 2002. In connection with this sale, we recorded
a pre-tax loss of approximately $121.1 million in 2001. The proceeds from the sale were used to pay
down our term debt under a previous credit agreement.
Effective November 1, 2001, we sold our majority interest in Microlin, LLC (“Microlin”), a
developer of proprietary battery and fluid delivery technology, for $1,000 in cash plus contingent
consideration based upon future performance through December 31, 2012 and the cancellation of
future funding requirements. We recorded a pretax loss of $1.4 million in 2001 related to the sale.
Non-GAAP Measures
Net income and diluted earnings per share, excluding a non-cash restricted stock charge and a net
release of our tax valuation allowance, are non-GAAP financial measures and they are presented in the
“Results of Operations” sections below because these measures form the basis upon which our
management has assessed the Company’s financial performance in the years presented. Additionally,
under our credit agreement the non-cash restricted stock charge is excluded in certain calculations used
for determining whether we are in compliance with certain credit agreement covenants. These
calculations are measures of our performance that are not required by, or presented in accordance with
generally accepted accounting principles in the United States (“GAAP”). As such, these measures should
not be considered as alternatives to net income or diluted earnings per share in accordance with GAAP.
Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial
measures have been presented within the “Results of Operations” sections below.
Results of Operations —Comparing 2003 to 2002
We reported net sales of $587.4 million in 2003, a 60.0% increase from net sales of 367.1 million in
2002.
In 2003, our branded consumables segment reported net sales of $257.9 million compared to
$111.2 million in 2002. This increase of 131.8% was principally the result of the Diamond Acquisition,
effective February 1, 2003, and the Lehigh Acquisition, effective September 2, 2003. In addition, the
acquisition of OWD in the second quarter of 2003, contributed to this increase. Excluding the effect of
acquisitions, net sales for our branded consumables segment in 2003 were comparable to 2002.
Our consumer solutions segment reported net sales of $215.8 million compared to $145.3 million
in net sales in 2002. This increase of 48.5% was principally the result of this segment being acquired in
April 2002 and, therefore, net sales for 2003 reflect sales for the full year but net sales for 2002 reflect
sales for only nine months of the year. Additionally, the acquisition of VillaWare in the fourth quarter of
2003 contributed to this increase. Furthermore, the year-on-year increase is a result of organic U.S. retail
and international sales growth of over 10% for this segment in the last three quarters of 2003 compared
to the same period in 2002.
page 15