Sunbeam 2006 Annual Report Download - page 81

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European Reorganization
During 2006,the Company made a strategic plan to rationalize its European manufacturing and administrative platform
in order to facilitate a long-term cost savings initiative. During 2006,the Company recorded charges of $2million, related to
this strategic plan consisting mostly of severance and other employee benefit-related costs associated with 10 employees, all of
which were terminated as of December 31,2006,and are reflected in “Reorganization and acquisition-related integration
costs, net” in the Condensed Consolidated Statements of Income. As of December 31,2006, $1.3million remains accrued
and is reflected in “Other current liabilities” in the Condensed Consolidated Balance Sheet. The amounts accrued are
expected to be substantially paid by the end of fiscal year 2007.
Outsourcing
In 2005,Outdoor solutions management decided to outsource the manufacturing of its outdoor recreation appliances
manufactured at its Lyon, France facility, and the Company initiated the outsourcing activities upon completion of reviews con-
ducted by government and union officials. Other manufacturing operations in Lyon were unaffected by this move. During
2006,the Company reversed approximately $0.7million of charges, primarily related to the plant closing. These are reflected
in “Reorganization and acquisition-related integration costs, net” in the Condensed Consolidated Statements of Income. The
initiative is currently scheduled to be substantially completed in 2007 and is expected to result in the termination of approxi-
mately 125 employees (87 were terminated by the end of 2005), of which 122 were terminated as of December 31,2006.
As of December 31,2006, $0.5million, primarily related to severance and other employee benefit-related costs, remains
accrued, is reflected in “Other current liabilities” in the Condensed Consolidated Balance Sheets. The amounts accrued are
expected to be fully paid by the end of fiscal year 2007.
Branded Consumables Segment Reorganization
Segment Reorganization
During the first quarter of 2005,the Company began implementing a strategic plan to reorganize its Branded consum-
ables segment and thereby facilitate long-term cost savings and improve management and reporting capabilities. Specific cost
savings initiatives include the utilization of certain shared distribution and warehousing services and information systems plat-
forms and outsourcing the manufacturing of certain kitchen products. During 2006,the Company recorded severance charges
of $0.8million and other charges of $7million primarily related to impairment of fixed assets ($3.3million) and inventory
move costs ($1.6million) which are included in “Reorganization and acquisition-related integration costs, net” in the
Condensed Consolidated Statements of Income. As of December 31,2006,less than $0.6million of the charges recorded
remain accrued and are reflected in “Other current liabilities” in the Condensed Consolidated Balance Sheets. All amounts
are expected to be paid by the second quarter of 2007.
Corporate Reorganization and Acquisition-Related Integration Costs
As part of the AHI Acquisition, during 2005 it was determined that certain corporate functions of the two entities would
be combined and redundant functions would be eliminated. Further, certain functions and responsibilities would be transi-
tioned to the Company’s offices in Florida, while other functions would transition to the Company’s New York headquarters.
During 2006,the Company recorded charges of $0.7million consisting primarily of retention and travel expenses directly
associated with the reorganization, which areincluded in “Reorganization and acquisition-related integration costs, net” in
the Condensed Consolidated Statements of Income. The initiative was completed during the second quarter of 2006 and
resulted in the termination of 21 employees, all of which were terminated during 2006.
During 2006,the Company reversed a $2.4million lease restructuring liability which was initially recorded in the
Corporate segment for unutilized office space. Due to the Consumer solutions plan to integrate certain functions within its
businesses and the related relocation of employees, the Company determined that this space will now be utilized. During
2006,the Company also recorded $1.2million of other costs, primarily related to the professional fees directly attributable to
acquisition and integration activities.
Notes to Consolidated Financial Statements
Jarden Corporation 2006 Annual Report
79