Sunbeam 2009 Annual Report Download

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ANNUAL REPORT 2009

Table of contents

  • Page 1
    ANNUAL REPORT 2009

  • Page 2
    ... developed by the supply chain team. The JAH-Man name incorporates our ticker symbol, and the figure itself represents the brands of everyday life and epitomizes Jarden striding purposefully into the future. This year's Annual Report cover is based on concepts taken from designs submitted by 10 of...

  • Page 3
    ...'s Letter Outdoor Solutions Consumer Solutions Branded Consumables Community Service Recent Developments Selected Financial Data Management's Discussion & Analysis Financial Statements 2 6 8 10 12 14 17 19 38 Corporate Strategy: Jarden has evolved into a leading consumer products company with...

  • Page 4
    ...the consumer products space. Jarden's exceptional performance in 2009 proved that our diversified business model is extremely resilient and that we perform like a consumer staples company when times are tough. Our early, decisive actions were designed to achieve a number of goals beyond controlling...

  • Page 5
    ...Jarden to hold over $825 million in cash on hand at year-end and reduce our bank leverage ratio to 2.6 times, well below our 3 times target. Our aggressive approach to inventory management, combined with disciplined cost controls, resulted in adjusted net income increasing from 2008 to 2009. As part...

  • Page 6
    ... of new products in a variety of markets. These new product introductions included the Mr. Coffee® Frappe, the Duo and Trio Crock-Pot®, a new energy efficient line of Bionaire® air purifiers and fans and the Oster® Baby Nutrition Center system. Jarden Outdoor Solutions finished the year...

  • Page 7
    ..., the home care portfolio of Mapa Spontex opens a new front in Jarden's "in and around the home" product offerings, through the market for household cleaning items. Of equal importance, at less than a 6 times EBITDA acquisition multiple, we believe we have deployed the Company's capital very ef...

  • Page 8
    ... new outerwear is comfortable and functional, and provides protection from the elements by utilizing the latest technology in material and designs. Outdoor Solutions K2® K2 manufactures highperformance, four season equipment for the action sports and outdoor enthusiast. Our skis, in-line skates...

  • Page 9
    ... to the limits. Berkley® Shakespeare® Stren® Our brands are the biggest in the fishing industry. Our high quality products help beginners and master fishermen catch more fish. Rawlings® Authentic, Innovative, Performance-Based Sporting Goods Equipment. Rawlings' products enable players...

  • Page 10
    ... your precious kitchen counter space with the new FoodSaver® Vertical Vacuum Sealing System. Save money and keep your foods fresh up to 5 times longer than traditional storage methods! Sunbeam® Giving you the freedom to step away from the ironing board, the Sunbeam® Convertible Iron + Steamer is...

  • Page 11
    ... they can provide healthy, ï¬,avorful food for their baby. Oster® Oster® Animal Solutions offers expert grooming solutions for the family pet. Our products are safer, easier to use and more reliable solutions for taking care of your furry companions' grooming needs. FY 2009 Sales $1.8 billion 9

  • Page 12
    ...®. Branded Consumables Bicycle® Every time you open a fresh deck of Bicycle® you are holding 125 years of playing card expertise. We proudly craft each deck using custom paper and coatings so you can trust Bicycle® performance hand after hand. Ball® Ball® Brand Fresh Preserving Products...

  • Page 13
    ... component to any household safety plan. Convenient battery drawers open for easy battery replacement without removing alarm from the ceiling or wall. Diamond® Diamond® matches work no matter what, which is why we have been the #1 match brand for over 125 years. FY 2009 Sales $0.8 billion 11

  • Page 14
    ... life style habits through regular exercise and healthy eating. In 2010, Jarden rolled out the program company wide. Community Service Haiti Relief Program The Coleman Emergency Response Team was activated immediately upon the news of the devastating earthquake in Haiti. Through cooperative...

  • Page 15
    ... a cost-free outdoor ranch experience for children, adults and families affected by cancer. Veterans' Programs Through cooperative effort with the American Armed Forces, Jarden continues to help current and retired military service personnel and their families, by supporting a number of veterans...

  • Page 16
    ... Jarden acquired Paris-based Mapa Spontex, a leading provider of baby care and home care products. The acquisition adds leading iconic brands such as NUK®, Mapa® and Spontex® to our Branded Consumables portfolio, and further expands our global presence. Mapa Spontex has two primary business units...

  • Page 17
    .... Carefully designed, these high quality products help prevent colic while staying soft and supple for your baby's comfort and joy. Jarden Today* International 31% 69% Domestic Jarden Tomorrow** International 38% 62% Domestic 4% Process Solutions * Represents Jarden's fiscal year 2009 revenue by...

  • Page 18
    16

  • Page 19
    ... Data Jarden Corporation Annual Report 2009 The following tables set forth the Company's selected financial data as of and for the years ended December 31, 2009, 2008, 2007, 2006 and 2005. The selected financial data set forth below has been derived from the audited consolidated financial statements...

  • Page 20
    ...resulting from a strategic review of executive long-term incentive compensation. (e) In September 2009, the Company announced that the Board had decided to initiate a quarterly cash dividend of $0.075 per share of the Company's common stock starting in the third quarter of 2009. (f ) Working capital...

  • Page 21
    ... use in the beauty and barber and animal categories; electric blankets, mattress pads and throws; household kitchen appliances, such as blenders, coffeemakers, irons, mixers, slow cookers, toasters, toaster ovens and vacuum packaging machines; personal care and wellness products, such as air...

  • Page 22
    ... and Analysis Jarden Corporation Annual Report 2009 Summary of Significant 2009 Activities • In April 2009, the Company completed an equity offering of 12 million newly-issued shares of common stock at $17.50 per share resulting in net proceeds of approximately $203 million. • • In April 2009...

  • Page 23
    ...the results of Pure Fishing from April 6, 2007. On August 8, 2007, the Company acquired all the outstanding shares of K2 Inc. ("K2"), a leading provider of branded consumer products in the global sports equipment market in exchange for consideration of $10.85 in cash per share of K2 common stock and...

  • Page 24
    Management's Discussion and Analysis Jarden Corporation Annual Report 2009 Results of Operations-Comparing 2009 to 2008 Net Sales Years Ended December 31, (In millions) 2009 2008 2009 2008 Operating Earnings (Loss) Outdoor Solutions Consumer Solutions Branded Consumables Process Solutions ...

  • Page 25
    Management's Discussion and Analysis Jarden Corporation Annual Report 2009 In the fourth quarter of 2009, the Company's impairment test resulted in a non-cash charge of $12.8 million to reflect impairment of goodwill in the Company's Branded Consumables segment. The impairment charge was recorded ...

  • Page 26
    Management's Discussion and Analysis Jarden Corporation Annual Report 2009 resulting from overall economic weakness. Net sales in the Consumer Solutions segment declined $56.3 million or 3.0%, primarily due to weakness in domestic sales in most product categories, primarily as a result of overall ...

  • Page 27
    ... 2004 Internal Revenue Service audits ($4.7 million), the tax effect of non-deductible compensation expense ($4.4 million), and the tax effect of foreign earnings that will not be permanently reinvested. The Company believes that its long-term tax rate will be approximately 36.0%. Net income (loss...

  • Page 28
    ... in excess of proceeds from issuance of long-term debt ($59.0 million) during the 2009, partially offset by the issuance of common stock, net of transaction fees, during 2009 ($212 million). Cash Flows from Investing Activities Net cash used in investing activities was $131 million and $176 million...

  • Page 29
    Management's Discussion and Analysis Jarden Corporation Annual Report 2009 approximately $284 million of the outstanding principal on the Company's term loans under the Facility. Beginning in May 2013, the Company may redeem all or part of the Notes at specified redemption prices ranging from 100% ...

  • Page 30
    ...'s Discussion and Analysis Jarden Corporation Annual Report 2009 Risk Management From time to time, the Company may elect to enter into derivative transactions to hedge its exposures to interest rate and foreign currency fluctuations. The Company does not enter into derivative transactions...

  • Page 31
    ... Analysis Jarden Corporation Annual Report 2009 Significant Accounting Policies and Critical Estimates The Company's financial statements are prepared in accordance with GAAP, which require us to make judgments, estimates and assumptions that affect the amounts reported in the financial statements...

  • Page 32
    ...and Analysis Jarden Corporation Annual Report 2009 methods. Goodwill impairment testing requires significant use of judgment and assumptions including the identification of reporting units; the assignment of assets and liabilities to reporting units; and the estimation of future cash flows, business...

  • Page 33
    ...'s Discussion and Analysis Jarden Corporation Annual Report 2009 targeted range. Additionally, at December 31, 2009, the cash balances were targeted levels due to the timing of transactions as the Company was reallocating assets among investment managers. At December 31, 2009, the domestic plan...

  • Page 34
    ... and Analysis Jarden Corporation Annual Report 2009 experience and are adjusted as necessary if actual forfeitures differ from these estimates. Certain performance awards require management's judgment as to whether performance targets will be achieved. Product Warranty Costs The Company recognizes...

  • Page 35
    ...to shareholders of record as of the close of business on June 20, 2005. All references in this Annual Report to the number of shares outstanding, per share amounts, issued shares, sale price of Jarden's common stock, restricted stock and stock option data of Jarden's common shares have been restated...

  • Page 36
    Market for Registrant's Common Equity Jarden Corporation Annual Report 2009 Performance Graph The following Performance Graph and related information shall not be deemed "soliciting material" or to be "filed" with the Securities and Exchange Commission, nor shall such information be incorporated by...

  • Page 37
    Management's Report Jarden Corporation Annual Report 2009 Management's Report on Internal Control Over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f ) and 15d-15(f ) under...

  • Page 38
    ...Registered Public Accounting Firm Jarden Corporation Annual Report 2009 To the Board of Directors and Stockholders of Jarden Corporation In our opinion, the accompanying consolidated balance sheets and related consolidated statements of income, stockholders' equity and cash flows present fairly, in...

  • Page 39
    ... Registered Public Accounting Firm Jarden Corporation Annual Report 2009 The Board of Directors and Stockholders of Jarden Corporation We have audited the accompanying consolidated statements of income, stockholders' equity, and cash flows of Jarden Corporation and subsidiaries (the "Company") for...

  • Page 40
    ... Statements of Income Jarden Corporation Annual Report 2009 Years Ended December 31, (In millions, except per share amounts) 2009 2008 2007 Net sales Cost of sales Gross profit Selling, general and administrative expenses (including stock-based compensation of $41.3, $20.6 and $64.0 for the years...

  • Page 41
    Consolidated Balance Sheets Jarden Corporation Annual Report 2009 As of December 31, (In millions, except per share amounts) 2009 2008 Assets Cash and cash equivalents Accounts receivable, net of allowances of $60.7 in 2009, $65.2 in 2008 Inventories Deferred taxes on income Prepaid expenses and ...

  • Page 42
    ...transaction fees Repurchase of common stock and shares tendered for taxes Debt issuance costs Dividends paid Other, net Net cash provided (used in) by financing activities Cash flows from investing activities: Additions to property, plant and equipment Acquisition of businesses, net of cash acquired...

  • Page 43
    Consolidated Statements of Changes in Stockholder's Equity Jarden Corporation Annual Report 2009 Common Stock (In millions) Shares Amount Treasury Stock Shares Amount Preferred Stock Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total...

  • Page 44
    Consolidated Statements of Changes in Stockholder's Equity (continued) Jarden Corporation Annual Report 2009 Common Stock (In millions) Shares Amount Treasury Stock Shares Amount Preferred Stock Shares Amount Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (...

  • Page 45
    ...Significant Accounting Policies Business Jarden Corporation and its subsidiaries (hereinafter referred to as the "Company" or "Jarden") is a leading provider of a broad range of consumer products. Jarden's three primary business segments, Outdoor Solutions, Consumer Solutions and Branded Consumables...

  • Page 46
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) exchange rate of 2.15. At December 31, 2009, the Company's subsidiaries in Venezuela have approximately $32 in cash denominated in U.S. dollars...

  • Page 47
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Amortization Deferred debt issue costs are amortized over the term of the related debt. Identifiable intangible assets are recognized apart ...

  • Page 48
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Derivative Financial Instruments The Company enters into interest rate swaps to manage interest rate risk on its variable rate debt. The Company designates...

  • Page 49
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) The following table summarizes the assets that are measured at fair value on a non-recurring basis at December 31, 2009: December 31, (In ...

  • Page 50
    ... Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) 2. New Accounting Guidance and Adoption of New Accounting Guidance New Accounting Guidance In January 2010, the Financial Accounting Standards Board (the "FASB") issued...

  • Page 51
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) In March 2008, the FASB issued Guidance that requires that a company with derivative instruments disclose information to enable users of the financial statements...

  • Page 52
    ... Company acquired all the outstanding shares of K2, a leading provider of branded consumer products in the global sports equipment market in exchange for consideration of $10.85 in cash per share of K2 common stock and 0.1118 of a share of Jarden common stock for each share of K2 common stock issued...

  • Page 53
    ...forecasted cash flows, reflecting the deterioration of revenues and margins in the business. In the fourth quarter of 2008, the Company's annual impairment test resulted in a non-cash charge of $172 to reflect impairment of goodwill in the Company's Branded Consumables and Outdoor Solutions segments...

  • Page 54
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) charge was recorded within the Firelog, Lehigh and United States Playing Cards reporting units. In the Outdoor Solutions segment, the impairment charge was recorded...

  • Page 55
    ... Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Impairments-2009 In the Outdoor Solutions segment, the impairment charge recorded relates primarily to certain tradenames within this segment's snow sports business, primarily a result...

  • Page 56
    ...Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) 8. Warranty Reserve Warranty reserve activity for 2009 and 2008 is as follows: (In millions) 2009 2008 Warranty reserve at January 1, Acquisitions and...

  • Page 57
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) price of Jarden's common stock exceeds $45.32 (subject to adjustment as provided therein) per share for a period of three consecutive trading days. Senior...

  • Page 58
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) The Company's debt maturities for the five years following December 31, 2009 and thereafter are as follows: (In millions) Years Ending December...

  • Page 59
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) At December 31, 2009, unamortized deferred gains resulting from the termination of certain cash flow hedges was approximately $1.9. These ...

  • Page 60
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) The following table presents gain and loss activity (on a pretax basis) for 2009 related to derivative financial instruments designated as effective hedges: 2009...

  • Page 61
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Operating lease commitments at December 31, 2009 are as follows: (In millions) Years Ending December 31, Amount 2010 2011 2012 2013 2014 ...

  • Page 62
    ... recall actions and higher than anticipated rates of warranty returns or other returns of goods. The Company and/or its subsidiaries are therefore party to various personal injury and property damage lawsuits relating to their products and incidental to its business. Annually, the Company sets...

  • Page 63
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) The difference between the federal statutory income tax rate and the Company's reported income tax rate as a percentage of income (loss) from ...

  • Page 64
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) this amount, approximately $1 billion were acquired through acquisitions, of which approximately $849 are not reflected in the consolidated financial statements...

  • Page 65
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Stock Options A summary of the Company's stock option activity in 2009, 2008 and 2007 is as follows (Shares in thousands): 2009 Weighted Average Exercise Price...

  • Page 66
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) A summary of the Company's restricted share activity for 2009, 2008 and 2007 is as follows: Weighted Average Fair Value (Shares in thousands)...

  • Page 67
    ... time after one year from the date of issuance if the closing price of Jarden's common stock exceeds $50.99 per share (subject to equitable adjustment for certain transactions) for a period of three consecutive trading days. If the holder of the Note, also issued in connection with the Pure Fishing...

  • Page 68
    ... Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) 15. Employee Benefit Plans The Company maintains defined benefit pension plans for certain of its employees and provides certain postretirement medical and life insurance...

  • Page 69
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Funded Status The following provides a reconciliation of the benefit obligation, plan assets and the funded status of the pension and postretirement...

  • Page 70
    ...and expected future market conditions, risk and active management premiums. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns on the Company's defined benefit pension plan's investments. The Company's target asset allocation for 2009 and 2008 is...

  • Page 71
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) The composition of domestic pension plan assets at December 31, 2009 is as follow: Fair Value Measurements of Plan Assets - Domestic Plan (In ...

  • Page 72
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Domestic Contributions In 2010, the Company expects to make cash contributions of approximately $28.6 and $1.0 to its domestic pension and ...

  • Page 73
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) 16. Reorganization and Acquisition-Related Integration Costs Reorganization and acquisition-related integration costs (collectively, "...

  • Page 74
    ... Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Outdoor Solutions Segment Reorganization Costs In 2009, the Company initiated plans to rationalize the overall cost structure of the Outdoor Solutions...

  • Page 75
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) The following table sets forth the details and the activity related to reorganization costs as of and for the years ended December 31, 2009 and 2008...

  • Page 76
    ... use in the beauty and barber and animal categories; electric blankets, mattress pads and throws; household kitchen appliances, such as blenders, coffeemakers, irons, mixers, slow cookers, toasters, toaster ovens and vacuum packaging machines; personal care and wellness products, such as air...

  • Page 77
    ... Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Segment information as of and for the years ended December 31, 2009, 2008 and 2007 is as follows: Outdoor Solutions Consumer Solutions Branded Consumables...

  • Page 78
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) (In millions) Outdoor Solutions Consumer Solutions Branded Consumables Process Intercompany Solutions Eliminations Total Operating ...

  • Page 79
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) 19. Condensed Consolidating Financial Statements The Company's 8% Senior Notes and 7 1/2% Senior Subordinated Notes (see Note 9) are fully ...

  • Page 80
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2009 (Dollars in millions, except per share data and unless otherwise indicated) Condensed Consolidating Balance Sheets: As of December 31, 2009 (In millions) Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries ...

  • Page 81
    ... stock, net Other Net cash provided by (used in) financing activities Investing activities: Additions to property, plant and equipment Acquisition of business, net of cash acquired and earnout payments Other Net cash provided by (used in) investing activities Effect of exchange rate changes on cash...

  • Page 82
    ...-term debt Issuance (repurchase) of common stock, net Other Net cash provided by (used in) financing activities Investing activities: Additions to property, plant and equipment Acquisition of business, net of cash acquired Other Net cash provided by (used in) investing activities Effect of exchange...

  • Page 83
    ...Investor Relations Financial Dynamics Business Communications New York, New York 212-850-5600 Essentials®, Lillo®, Mapa®, NUK®, Spontex® and Tigex® Paris, France +33 1 49 64 22 00 Process Solutions NYSE Corporate Governance Disclosure Jarden Corporation filed as exhibits to its 2009 Annual...

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