Sunbeam 2009 Annual Report Download - page 25

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 within the Arts and Crafts business
unit. The impairment was due to a decrease in the fair value of forecasted cash flows, reflecting the deterioration of revenues and margins
in the business.
The Company’s impairment test in 2009 resulted in a non-cash charge of $10.1 million to reflect impairment of intangible assets
related to certain of the Company’s tradenames. The impairment charge was allocated to the Company’s reporting segments as follows:
Year Ended
(In millions) December 31, 2009
Impairment of intangibles:
Outdoor Solutions $ 0.8
Branded Consumables 9.3
$ 10.1
In the Outdoor Solutions segment, the impairment charge recorded relates primarily to certain tradenames within this segment’s
snow sports business, primarily a result of the abandonment of a minor tradename. In the Branded Consumables segment the impairment
charge recorded relates to certain tradenames associated with this segment’s Firelog and Safety and Security businesses. The impairment
within the Branded Consumables segment was due to a decrease in the fair value of forecasted cash flows, resulting from the deterioration
of revenues and margins related to these tradenames.
Net interest expense for 2009 decreased by $31.2 million to $148 million versus the same prior year period, primarily due to a
decrease in the weighted average interest rate for 2009 to 5.4% from 6.4% in 2008. The decrease in the weighted average interest rate was
due to a decline in short-term variable interest rates (LIBOR) combined with the maturity of $725 million notional amount of fixed rate
interest rate swaps during 2009.
The Company’s reported tax rate for 2009 and 2008 was 46.2% and (80.7%), respectively. The difference from the statutory tax rate to
the reported tax rate for 2009 results principally from the U.S. tax expense of $25.7 million recognized on the undistributed foreign income,
and $18.5 million recognized on the distributed foreign income, less a $12.9 million benefit attributable to local Venezuela inflationary
adjustments and tax-exempt earnings. The difference from the statutory tax rate to the reported tax rate for 2008 results principally from
the tax charge related to the impairment of goodwill ($33.4 million) and from U.S. tax expense ($14.0 million) recognized on undistributed
foreign income.
Net income for 2009 increased $188 million to $129 million versus the same prior year period. For 2009 and 2008 diluted earnings
(loss) per share were $1.52 and ($0.78), respectively. The increase in net income (loss) was primarily due to the incremental decrease in 2009
of the charge recorded for the impairment of goodwill and intangibles ($260 million), the aforementioned decreases in SG&A and interest
expense, partially offset the increase in the diluted weighed average shares outstanding in 2009 resulting from the issuance of 12.0 million
shares of common stock from the Company’s equity offering in April 2009.
Results of Operations—Comparing 2008 to 2007
Net Sales
Years Ended December 31,
(In millions) 2008 2007
Outdoor Solutions $ 2,481.0 $ 1,698.6
Consumer Solutions 1,812.9 1,869.2
Branded Consumables 804.9 806.2
Process Solutions 348.6 353.6
Intercompany eliminations (64.1) (67.5)
$ 5,383.3 $ 4,660.1
Net sales in 2008 increased $723 million, or 16%, to $5.4 billion versus 2007. The overall increase in net sales was due to the acquisi-
tions of K2 and Pure Fishing, which are in the process of being integrated primarily into the Outdoor Solutions segment. Net sales in the
Outdoor Solutions segment increased $782 million, driven by the inclusion of the acquired K2 and Pure Fishing businesses. Net sales in the
legacy Coleman business increased slightly primarily due to an expanded lighting program, the launch of new tailgating related products,
hurricane related volumes, favorable foreign currency translation and price increases, offset by declines in domestic and international sales
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2009
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