Sunbeam 2003 Annual Report Download - page 4

page 2
D
Dear Fellow Shareholders:
In my letter to shareholders last year, I stated that we entered
2003 with a solid platform of businesses and considerable
momentum for growth. I am delighted to report that your
company succeeded in meeting or beating its major objectives
for the year, both operationally and financially.
We reported record financial performance in 2003 with
revenues surpassing the $500 million mark and cash flow
from operations exceeding $70 million. At the same time,
shareholder value continued to expand as evidenced by a
72% increase in our share price, which was achieved on the
heels of strong our performance in 2002.
Our strategy over the last two years has been to focus on
building a portfolio of market-leading, niche branded
consumer products that produce EBITDA margins in excess
of 15%. While the nature of our products might appear to be
diverse, as illustrated by the front cover of this annual report,
they are remarkably similar and cohesive from an operating
perspective. Typically our products are “basic” in nature with
a consumable element, are used in and around the home
and can be shipped in a coordinated manner through our
well-established, complementary distribution channels. Our
goal is to build on our existing portfolio of brands and
products by introducing line extensions or new products that
can best serve the needs of our customers.
As a result of our efforts in the last two and a half years, Jarden
has become a highly regarded leader in the consumer products
market. We continue to work on expanding the depth and
breadth of our product offerings to increase organic growth
in revenue and earnings.
In 2003, we completed two significant acquisitions, as well as
two tuck-in transactions, adding over $250 million in annualized
incremental revenue to the group. In the branded consumables
segment, Diamond Brands provided Jarden with market leading
positions in wooden matches, toothpicks, clothespins and boxed
retail plastic cutlery. The Lehigh acquisition expanded our
retail distribution to the do-it-yourself market, while establishing
us as the largest provider of rope, cord and twine used by con-
sumers in the United States. Equally important as the valuations
on which we were able to buy these businesses, the acquisitions
have been successfully integrated into the group and we are
actively pursuing opportunities to maximize their growth within
the Jarden family.
As part of our ongoing commitment to manage our balance
sheet in what we consider to be a conservative manner during
this period of rapid expansion, we completed a primary equity
offering that netted the company $112 million of new capital
for acquisitions and general corporate purposes. In addition,
we continued to tap the debt markets on an opportunistic basis
during 2003 to build our long-term credit base. This included
the issuance of an additional $32 million of ten year notes and
$280 million of senior secured loans. The strong credit markets
in general, and receptiveness to Jarden in particular, allowed us
to close these financings at favorable rates. Furthermore, the 3
for 2 stock split completed in November increased liquidity in
the market for Jarden’s common stock at a time of heightened
investor interest.
On the operating front, I am pleased to report that we continued
to strengthen our management ranks during 2003, following
our mantra that, “Our best assets go home every night.”
“We believe our portfolio of well-recognized consumer brands has
enormous development potential. The morale within your company is high;
we have a clear strategy, a successful operating business and
a motivated and enthusiastic management team.”
CHAIRMAN’S LETTER