Sunbeam 2008 Annual Report Download - page 7

Oster® and Sunbeam® blenders and mixers into the world of products for
entertaining, that in the three years since the rst product was launched has become
a $60 million enterprise. Building on Coleman’s historical presence in lanterns, our
investments in LED technology have created a ashlight business that has grown from
nothing in 2006 to a business generating over $20 million of sales in 2008. Similarly,
our Tundra® re extinguishing spray, which was launched two years ago under the
First Alert brand, is now sold in over 15,000 retail outlets. These examples are not lucky
breaks, but rather the results of a carefully orchestrated strategy of investments in
new product development that is the lifeblood of Jarden.
I believe that in ve years time, when we look back at our business and evaluate
its resilience during this recessionary time, Jarden’s diversied business model and
portfolio of market leading brands will deserve a premium valuation as a defensive, as
well as a growth company. Jarden in its current complexion is a mere 18 months old,
so one can understand the “show me” attitude from outside parties in the short term,
but from the inside we have great condence that our investments and strategy over
the last several years will pay dividends.
2009 is already showing signs of being another volatile year and our goal remains
to oset macroeconomic declines by growing our presence across a broad array
of categories. We continue to navigate our way through opportunities created by
commodity price decreases, as opposed to the unprecedented commodity price
increases we have absorbed over the last three years. We have been disciplined
in building our product mix and new product introductions to meet our long
term margin goals and the relief on the cost side should help us continue this
progression. While our strategy has been to grow sales and earnings on the back
of new product development, we have not ignored the priorities of cash ow
maximization and balance sheet strength. Since 2001 we have stated our target
comfort zone for bank leverage to be 3.5x net debt to EBITDA. In the past some
considered this to be too conservative, but we believed it was the right balance
between prudent balance sheet management and leveraging equity returns. Today,
the new conventional wisdom is the less debt the better, and in response we are
driving our business to a more conservative leverage ratio of under 3.0x. Our cost of
capital today is relatively low and we have no meaningful amortization payments until
2011, with $393 million of cash on hand at year end. Our intention is to maintain this
strong liquidity position until the credit markets nd their feet again and we believe
we can access new credit at reasonable rates.
As we navigate this volatile economic period, our internal mantra is to prepare for
the worst while hoping for the best. I am more proud than ever of the resilience and
creativity of our workforce who have risen to the challenge of helping Jarden strive to
be better at every level. I am also proud of what we have not done. You will not nd
us spending tens of millions of dollars on our corporate headquarters or oce
refurbishments. At Jarden our culture is to treat every dollar spent as if it were
your own.
In 2009 we intend to continue to execute on our clearly articulated strategy and prove
what great value the platform we have created can provide to our shareholders.
Yours sincerely,
Martin E. Franklin
Chairman of the Board and Chief Executive Ocer
Message to our shareholders
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