Sunbeam 2005 Annual Report Download - page 80

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Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2005
with the plant closing and related costs, which are reflected in “Reorganization and acquisition-related
integration costs” in the Consolidated Statements of Income. The initiative is currently scheduled to be
substantially completed in 2006 and is expected to result in the termination of approximately 125
employees, of which 87 were terminated as of December 31, 2005. The Company currently expects that it
will incur additional charges of approximately $1.1 million related to this initiative. During the year ended
December 31, 2005, the Company paid $5.3 million in severance and other employee benefit-related costs
and $1.5 million in other costs. As of December 31, 2005, $4.4 million, primarily related to severance and
other employee benefit-related costs, remains accrued, of which $4.1 million is reflected in “Other current
liabilities” and $0.3 million is reflected in “Other non-current liabilities” in the Consolidated Balance
Sheets. The amounts accrued are expected to be fully paid by 2007.
Outdoor Solutions Management Reorganization
Immediately following the AHI Acquisition, certain executive management changes were made at
Coleman. The Company recorded charges, relating to travel, relocation, retention and other related costs of
key management and other personnel, of approximately $2.0 million during the year ended December 31,
2005, $0.6 million of which was paid during the period. These costs are reflected in “Reorganization and
acquisition-related costs” in the Consolidated Statements of Income. As of December 31, 2005, $1.4
million, primarily related to severance and other employee benefit-related costs, remains accrued and is
reflected in “Other current liabilities.” The costs associated with the related terminations following the
AHI Acquisition were included in the determination of the cost of the AHI Acquisition.
Consumer Solutions Segment Reorganization
As part of the AHI Acquisition and THG Acquisition, it was determined that, due to similarities
between the combined consumer solutions customer base, distribution channels and operations, significant
cost savings could be achieved by integrating certain functions of the three businesses, such as distribution
and warehousing, information technology and certain other back-office functions. In order to take
advantage of a shared infrastructure and facilitate combined strategic management of this business
segment, the Company executed certain reorganization plans and acquisition related initiatives. During the
year ended December 31, 2005, the Company recorded charges of approximately $13.7 million in severance
and other employee benefit-related costs and $6.5 million in other costs. Other costs consist of $2.2 million
related to plant closings, $2.0 million of non-cash equipment write-offs, and $2.3 million of professional
fees, administrative costs and other charges related to the integration of operations within the consumer
solutions segment. These severance, employee benefit-related and other costs are reflected in
“Reorganization and acquisition-related integration costs” in the Consolidated Statements of Income. The
initial phase of this initiative is currently scheduled to be completed in February 2006 and is expected to
result in the termination of approximately 61 employees, of which 58 were terminated as of December 31,
2005. The Company currently expects that it will incur additional charges of approximately $0.5 million
related to this initiative, excluding any capital expenditures. During the year ended December 31, 2005,
the Company paid $2.4 million of retention bonuses which have been fully amortized over the retention
period, $2.5 million for severance and other employee benefit-related costs, and $3.7 million in other costs.
As of December 31, 2005, $11.0 million of severance, other employee benefit-related costs and other costs
remain accrued, which are reflected in “Other current liabilities” in the Consolidated Balance Sheets. The
amounts accrued are expected to be fully paid by 2007.
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