Sunbeam 2006 Annual Report Download - page 6

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4
MESSAGE TO OUR SHAREHOLDERS
strength of our core product lines, resulted in top line organic growth of more than 5%, despite
the continued pressure on the cost side and perceived weakness in consumer spending.
Our service level to customers continued at the highest levels in 2006. Being able to get
the right product to the right place at the right time is as critical to our success as our creative
marketing programs. Since January 2005, we have identified synergies between our businesses
that have created savings of more than $80 million. These savings do not include operational
improvements from our ongoing continuous improvement: six sigma or kaizen cost and efficiency
improvement initiatives.
Having market leading positions and powerful brands in virtually all of our product
categories is a significant advantage upon which we continue to build. We increased our invest-
ment behind our consumer brands significantly in 2006. While we do not invest directly in
promoting the Jarden name, we are heavily vested in ensuring it resonates with our retail partners
as standing for quality products and brands, outstanding operational execution and creativity in
introducing new products to grow the categories we serve, as well as with the investment community.
Along this line, we sought to increase our exposure to a wider investor audience in the
fourth quarter in completing an equity offering of approximately $140 million of newly issued
shares and an offering of approximately $320 million of secondary shares. The offering, which
was well received by the market, also helped Jarden end 2006 with a consolidated segment earn-
ings to net debt leverage ratio of 2.8x, our lowest year end level since 2003. Furthermore, the
overhang effect of Warburg Pincus’ equity holding was effectively eliminated, with the secondary
offering returning their original investment in the company while leaving them a continuing
investment of approximately 9%. Warburg Pincus has proved to be an excellent partner for
Jarden and we look forward to continuing this relationship in the future. In addition, Jarden
now has three new “bulge bracket” firms writing equity research on the company. We followed
this equity offering with a successful bond offering in February 2007. This $650 million offer-
ing allowed us to lower the coupon on our long term capital, while also creating significant
capacity for futuregrowth.
Our sustained growth over the last five years has been driven by a combination of suc-
cessfully executing our organic growth programs while pursuing an aggressive, yet disciplined,
acquisition program. 2006 saw a relatively small amount of acquisition activity as we focused on
successfully integrating our 2005 acquisitions. Wemade several small acquisitions during the
year which complement our existing portfolio. For instance, our acquisition of the market lead-
ing Pine Mountain®FireLog and FireStarter business, which we completed in September 2006,
dovetails well with our existing Diamond®and other Branded consumable businesses. In total, all
our acquisitions in 2006 accounted for less than 5% of our 2006 revenue.