Sunbeam 2009 Annual Report Download - page 28

Management’s Discussion and Analysis
Jarden Corporation Annual Report 2009
pension plan contribution requirements and debt obligations for the foreseeable future.
During the third quarter of 2009, the Company extended the maturity dates of the following debt instruments:
• In August 2009, the Company completed an extension of the revolving credit portion (the “Revolving Facility”) of the Company’s
senior credit facility (the “Facility”), which was allowed for under an April 2009 amendment, that extended the maturity date of
the Revolving Facility in an aggregate amount of $100 million to January 2012. Additionally, the then existing $185 million of
availability maturing in January 2010 was reduced to $1.0 million. Following the April 2009 amendment, the gross available
amount under the Revolving Facility is $101 million.
• In August 2009, the Company entered into an amendment to the Facility that extended the maturity date of $600 million
principal amount of existing term loans from January 2012 to January 2015 through the creation of a new Term B4 tranche of the
Facility, allowed for an increase in the maximum borrowings under the securitization facility from $250 million to $400 million,
and increased the Company’s general debt basket from $75 million to $150 million. The Term B4 loans bear interest of LIBOR
plus 3.25%.
Cash Flows from Operating Activities
Net cash provided by operating activities was $641 million and $250 million for 2009 and 2008, respectively. The improvement was
due primarily to favorable working capital movements, primarily resulting from disciplined inventory management and improved cash col-
lections; and improved operating results, which was primarily due to lower SG&A and lower interest expense, partially offset by a decrease in
accounts payable, primarily resulting from lower inventory levels.
Cash Flows from Financing Activities
Net cash used in financing activities for 2009 was $32.5 million versus net cash provided by financing activities of $105 million for
2008. The change was primarily due to the incremental net change in short-term debt on a year-over-year basis ($285 million) and pay-
ments on long-term debt 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 for 2009 and 2008, respectively. For 2009, capital expenditures
were $107 million versus $102 million for the same prior year period. The Company has historically maintained capital expenditures at
approximately 2% of net sales and expects that capital expenditures for 2010 will be consistent with this level. Additionally, for 2009 and
2008, net cash used for the acquisition of businesses and earnout payments was $13.7 million and $42.6 million, respectively.
Dividends
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. The Company expects that the quarterly dividends going forward will be paid during the last week of
October, January, April and July, and anticipates a total annual dividend of $0.30 per share of common stock. However, the actual declaration
of any future cash dividends, and the establishment of record and payment dates, will be subject to final determination by the Board each
quarter after its review of the Company’s financial performance. Cash dividends paid to stockholders in 2009 totaled approximately $6.6
million. On December 15, 2009, the Board declared quarterly cash dividend of $0.075 per share of the Company’s common stock or
approximately $6.7 million paid on January 29, 2010 to stockholders of record as of the close of business on January 4, 2010.
CAPITAL RESOURCES
At December 31, 2009 and 2008, the Company had cash and cash equivalents of $827 million and $393 million, respectively. At
December 31, 2009, there was no amount outstanding under the Revolving Facility. At December 31, 2009, net availability under the Facility
was approximately $64 million, after deducting approximately $37 million of outstanding letters of credit. The Company is required to pay
commitment fees on the unused balance of the Revolving Facility. At December 31, 2009, the annual commitment fee on unused balances
was 0.375%.
On January 20, 2010, the Company completed a registered public offering for $492 million aggregate principal amount of 7 1/2%
senior subordinated notes due 2020 and received approximately $476 million in net proceeds. The offering consists of two tranches: a U.S.
dollar tranche with aggregate principal amount of $275 million and a Euro tranche with aggregate principal amount of €150 or approxi-
mately $217 million. The Company used the net proceeds to repay $250 million of the Facility term loans, with the balance to be used for
general corporate purposes. Beginning in January 2015, the Company may redeem all or part of the senior subordinated notes due 2020
at specified redemption prices ranging from 100% to 103.75% of the principal amount, plus accrued and unpaid interest to the date of
redemption. These notes are subject to similar restrictive and financial covenants as the Company’s existing senior notes and senior
subordinated notes.
In April 2009, the Company completed a registered public offering for $300 million aggregate principal amount of 8% senior unse-
cured notes due May 2016 (the “Notes”) and received approximately $284 million in net proceeds. These net proceeds were used to prepay
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