Sunbeam 2009 Annual Report Download - page 23

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2009 Activity
During the 2009, the Company completed three tuck-in acquisitions that by nature are complementary to the Company’s core
businesses and from an accounting standpoint were not significant. The tuck-in acquisitions did not have a material impact on the period
over period comparisons discussed below, nor are they expected to have a material impact on future period comparisons. The Company
did not complete any acquisitions during 2008.
2007 Activity
On April 6, 2007, the Company acquired Pure Fishing, Inc. (“Pure Fishing”), a leading global provider of fishing tackle marketed under
well-known fishing brands including Abu-Garcia®, Berkley®, Gulp!®, Mitchell®, Stren®and Trilene®. The consideration consisted of $300
million in cash, a $100 million five year subordinated note with a 2% coupon and a warrant exercisable into approximately 2.2 million shares
of the Company’s common stock with an initial exercise price of $45.32 per share (subject to adjustment as provided therein). In addition to
the upfront purchase price, the Company has paid $25 million and accrued $25 million of contingent purchase price payments that are
based on the future financial performance of the acquired business. The accrued contingent purchase price payment is expected to be paid
in 2010. The Company’s results of operations for 2007 include 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 prod-
ucts 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 the Company’s common stock for each share of K2 common stock issued and outstanding. The total value of the transaction,
including debt assumed, was approximately $1.2 billion. The aggregate consideration to the K2 shareholders was approximately $701 million
and was comprised of a cash payment of approximately $517 million and the issuance of approximately 5.3 million common shares of the
Company with a fair value of approximately $184 million. In connection with the K2 acquisition the Company repaid certain of K2’s debt,
including accrued interest and make-whole premiums for approximately $341 million. The Company’s results of operations for 2007 include
the results of K2 from August 8, 2007.
The differences in the consolidated results of operations for 2008 versus 2007 are primarily due to the K2 and Pure Fishing
acquisitions.
Consolidated Results of Operations
Years Ended December 31,
(In millions) 2009 2008 2007
Net sales $ 5,152.6 $ 5,383.3 $ 4,660.1
Cost of sales 3,726.6 3,880.5 3,517.4
Gross profit 1,426.0 1,502.8 1,142.7
Selling, general and administrative expenses 963.9 1,013.7 861.1
Reorganization and acquisition-related integration costs, net 52.3 59.8 49.6
Impairment of goodwill and intangibles 22.9 283.2 —
Operating earnings 386.9 146.1 232.0
Interest expense, net 147.5 178.7 149.7
Loss on early extinguishment of debt — — 15.7
Income (loss) before taxes 239.4 (32.6) 66.6
Income tax provision 110.7 26.3 38.5
Net income (loss) $ 128.7 $ (58.9) $ 28.1
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2009
21