Sunbeam 2007 Annual Report Download - page 37

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Mr. Franklin has committed to our Board of Directors that Liberty and LIAC will be seeking transactions
outside of those that fit within Jarden’s publicly announced acquisition criteria and that Liberty and LIAC will
not interfere with Mr. Franklin’s or Mr. Ashken’s obligations to Jarden. Mr. Franklin also committed to the
Board that in order to avoid the potential for a conflict, prior to Liberty or LIAC pursuing any acquisition
transaction that Jarden might consider, Mr. Franklin would first confirm with an independent committee of our
Board of Directors that Jarden was not interested in pursuing the potential acquisition opportunity. If the
independent committee concludes that Jarden was interested in that opportunity, Liberty or LIAC would not
continue with that transaction. However, we cannot assure you that Liberty or LIAC will not choose to pursue
transactions that Jarden would have considered. If Liberty or LIAC pursues transactions that Jarden would have
considered, this could negatively impact Jarden’s growth from future acquisitions.
Our indebtedness imposes constraints and requirements on our business and financial performance, and
our compliance and performance in relationship to these could materially adversely affect our financial
condition and operations.
We have a significant amount of indebtedness. As of December 31, 2007, we had total debt of
approximately $2.7 billion. Our significant indebtedness could:
• increase our vulnerability to general adverse economic and industry conditions;
• require us to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital
expenditures, acquisitions and investments and other general corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we
operate;
• place us at a competitive disadvantage compared to our competitors that have less debt; and
• limit, among other things, our ability to borrow additional funds.
The terms of our senior credit facility and the indenture governing our 7
1
⁄
2
% senior subordinated notes due
2017, which we refer to as our notes, allow us to issue and incur additional debt upon satisfaction of certain
conditions. We anticipate that any future acquisitions we pursue as part of our growth strategy or potential stock
repurchase programs may be financed through a combination of cash on hand, operating cash flow, availability
under our existing credit facilities and new capital market offerings. If new debt is added to current debt levels,
the related risks described above could increase.
Our failure to generate sufficient cash to meet our liquidity needs may affect our ability to service our
indebtedness and grow our business.
Our ability to make payments on and to refinance our indebtedness, including our notes and amounts
borrowed under our senior credit facility, and to fund planned capital expenditures and expansion efforts and
strategic acquisitions we may make in the future, if any, will depend on our ability to generate cash in the future.
This, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond
our control.
Based on our current level of operations, we believe our cash flow from operations, together with available
cash and available borrowings under our senior credit facility, will be adequate to meet future liquidity needs for
at least the next twelve months. However, we cannot assure you that our business will generate sufficient cash
flow from operations in the future, that our currently anticipated growth in revenues and cash flow will be
realized on schedule or that future borrowings will be available to us under our senior credit facility in an amount
sufficient to enable us to service indebtedness, including the debt securities, grow our business or to fund other
liquidity needs. We may need to refinance all or a portion of our indebtedness, including our notes and our senior
credit facility, on or before maturity. We cannot assure you that we will be able to do so on commercially
reasonable terms or at all.
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