Sunbeam 2003 Annual Report Download - page 26

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Working Capital
Working capital (defined as current assets less current liabilities) increased to approximately $242.0
million at December 31, 2003, from approximately $101.6 million at December 31, 2002, due primarily
to:
• the working capital of our acquired businesses; and
• increased cash on hand amounts caused by the equity offering, our favorable operating results
and the new financing relationships discussed above, being only partially offset by amounts used
to fund our 2003 acquisitions.
Cash Flows from Operations
Cash flow generated from operations was approximately $73.8 million for the year ended December
31, 2003 compared to $69.6 million for the year ended December 31, 2002. The 2002 amount included
tax refunds of $38.6 million. Excluding the effect of the 2002 tax refunds, our cash flow from operations
in 2003 was $42.8 million higher than 2002. This increase was principally due to an increase in net
income, excluding the non-cash restricted stock charge, of $17.4 million in 2003 compared to 2002 and
lower working capital movements in 2003.
Our statement of cash flows is prepared using the indirect method. Under this method, net income
is reconciled to cash flows from operating activities by adjusting net income for those items that impact
net income but do not result in actual cash receipts or payments during the period. These reconciling
items include depreciation and amortization, changes in deferred tax items, non-cash compensation,
non-cash interest expense, charges in reserves against accounts receivable and inventory and changes in
the balance sheet for working capital from the beginning to the end of the period.
Capital Expenditures
Capital expenditures were $12.8 million in 2003 compared to $9.3 million for 2002 and are largely
related to installing a new information system for our consumer solutions segment, maintaining
facilities, tooling projects, improving manufacturing efficiencies, other new information systems and a
portion of the costs of the installation of new packaging lines for the branded consumables segment. As
of December 31, 2003, we had capital expenditure commitments in the aggregate for all our segments of
approximately $2.2 million, of which $0.8 million related to the completion of the new packaging lines
for the branded consumables segment.
Cash and Financing Availability
We believe that our cash and cash equivalents on hand, cash generated from our operations and
our availability under our senior credit facility is adequate to satisfy our working capital and capital
expenditure requirements for the foreseeable future. However, we may raise additional capital from
time to time to take advantage of favorable conditions in the capital markets or in connection with our
corporate development activities.
page 24
Jarden Corporation
Management’s Discusson and Analysis (continued)