Sunbeam 2007 Annual Report Download - page 53

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The differences in the results from operations for 2007 versus 2006 are primarily due to the K2 and Pure
Fishing acquisitions.
2006 Activity
During 2006, the Company completed four tuck-in acquisitions, three in the Branded Consumables segment
and one in the Consumer Solutions segment.
2005 Activity
On July 18, 2005, the Company completed the acquisition of The Holmes Group, Inc. (“Holmes” or the
“THG Acquisition”) for approximately $420 million in cash and 6.15 million shares of the Company’s common
stock. Holmes is a leading manufacturer and distributor of select home environment and small kitchen electrics
under well-recognized consumer brands, including Bionaire®, Crock-Pot®, Holmes®, Patton®, Rival®,
Seal-a-Meal®and White Mountain®. The aggregate purchase price was approximately $680 million, including
transaction expenses.
On January 24, 2005, the Company completed the acquisition of American Household, Inc. (“AHI” or the
“AHI Acquisition”), a privately held company, for approximately $745.6 million for 100% of its equity and the
repayment of approximately $100 million of indebtedness. AHI is the parent of The Coleman Company, Inc.
(“Coleman”) and Sunbeam Products, Inc. (now known as “Jarden Consumer Solutions” or “JCS”), leading
producers of global consumer products through brands such as BRK®, Campingaz®, Coleman®, First Alert®,
Health o meter®, Mr. Coffee®, Oster®and Sunbeam®. Of the equity portion of the purchase price, $40 million
was held back by the Company to cover potential indemnification claims against the sellers of AHI and has not
been accrued as a liability or considered part of the purchase price since the outcome of this contingency remains
uncertain.
During 2005, the Company completed three tuck-in acquisitions within the Branded Consumables segment.
As discussed further hereafter, the results of operations for 2006 versus 2005 include the results of Holmes
and AHI from their respective acquisition dates. The differences in operating results in 2006 versus 2005 are
primarily due to these acquisitions (the “Acquisitions”).
Consolidated Results of Operations
Years Ended December 31,
2007 2006 2005
(in millions)
Net sales ........................................................ $4,660.1 $3,846.3 $3,189.1
Cost of sales ..................................................... 3,517.4 2,904.0 2,402.3
Selling, general and administrative expenses ............................ 861.1 604.9 571.7
Reorganization and acquisition-related integration costs, net ............... 49.6 36.8 29.1
Operating earnings ................................................ 232.0 300.6 186.0
Interest expense, net ............................................... 149.7 112.6 84.2
Loss on early extinguishment of debt .................................. 15.7 — 6.1
Income before taxes ............................................... 66.6 188.0 95.7
Income tax provision ............................................... 38.5 82.0 35.0
Net income ...................................................... 28.1 106.0 60.7
Paid-in-kind dividends on Series B and C preferred stock .................. — — (9.7)
Charges from beneficial conversions of Series B and C preferred stock ....... — — (38.9)
Income available to common stockholders .............................. $ 28.1 $ 106.0 $ 12.1
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