Sunbeam 2007 Annual Report Download - page 83

On January 24, 2005, the Company completed the acquisition of American Household, Inc. (“AHI” or the
“AHI Acquisition”), a privately held company, for approximately $746 for 100% of its equity and the repayment
of approximately $100 of indebtedness. AHI is the parent of The Coleman Company, Inc. (“Coleman”) and
Sunbeam Products, Inc. (now known as “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 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.
The Company financed the AHI Acquisition via the issuance of $350 of equity securities (see Note 13) and
a new $1.05 billion senior credit facility (“Senior Credit Facility”) (see Note 9).
The AHI Acquisition and THG Acquisition represent significant elements in advancing the Company’s
strategy of acquiring branded consumer products businesses with leading market positions.
During 2005, the Company completed three tuck-in acquisitions within the Branded Consumables segment.
Pro forma financial information
The aggregate value of the Pure Fishing and tuck-in acquisitions did not have a material effect on the
Company’s results of operations in 2007, 2006 or 2005 and are therefore not included in the unaudited pro forma
financial information presented herein.
The following unaudited pro forma financial information for the years ended December 31, 2007 and 2006
presents the combined results of operations of the Company and K2 as if the Acquisition had occurred at
January 1, 2007 and 2006. The historical results of the Company for the year ended December 31, 2007 include
the results of K2 from the Acquisition Date. The pro forma results presented below for the year ended
December 31, 2007 combine the results of the Company for the year ended December 31, 2007 and the historical
results of K2 from January 1, 2007 through the Acquisition Date. The pro forma results for the year ended
December 31, 2006 combine the historical results of the Company and K2 for the year ended December 31,
2006. The unaudited pro forma financial information is not intended to represent or be indicative of the
Company’s consolidated results of operations or financial condition that would have been reported had the
Acquisition been completed as of the beginning of the periods presented and should not be taken as indicative of
the Company’s future consolidated results of operations or financial condition. Pro forma adjustments are
tax-effected at a statutory tax rate of 39.5%.
Years ended December 31,
2007 2006
(in millions)
Net sales ..................................................... $5,468.7 $5,240.9
Net income ................................................... 4.6 58.0
Earnings per share:
Basic .................................................... $ 0.06 $ 0.82
Diluted ................................................... $ 0.06 $ 0.81
The unaudited pro forma financial information for 2007 and 2006 include $6.8, for the amortization of
purchased intangibles from the Acquisition based on the preliminary purchase price allocation. The unaudited
pro forma financial information also includes the following non-recurring charges related to the Acquisition:
charges for the fair market value adjustment for manufacturer’s profit in inventory and other transaction costs of
$99.3 in 2007 and $10.4 in 2006, respectively.
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