Sunbeam 2010 Annual Report Download

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Annual Report 2010

Table of contents

  • Page 1
    Annual Report 2010

  • Page 2
    ... brands and new product innovation, while driving margin expansion and operational excellence o Acquisition - Opportunistic, disciplined acquirer of complementary, accretive businesses Consolidated 2010 Net Sales by Segment* Consolidated 2010 Segment Earnings** $6.0 billion Outdoor Solutions...

  • Page 3
    table of contents Chairman's Letter 2 Selected Financial Data 5 Management's Discussion & Analysis 7 Financial Statements 26 1

  • Page 4
    ... new product development and innovation, marketing and sales, procurement and supply chain. As a result of our strategy to continue to invest in our brands when our competitors were pulling back due to the recession, in 2010 Jarden grew its share of retail shelf space and produced record organic...

  • Page 5
    ... were the acquisitions completed during the year. The most significant was Mapa Spontex, which closed in April. Jarden is a leader in the baby care industry and in household gloves and sponges. Building upon this presence in household cleaning supplies, we acquired Quickie Manufacturing Corporation...

  • Page 6
    ... internal investment in new product development, debt repayment, additional acquisitions, share repurchases and dividend increases. As the management team are significant shareholders, our interests regarding the optimal deployment of capital to help drive the long-term prosperity of Jarden...

  • Page 7
    ... set forth below has been derived from the audited consolidated financial statements and related notes thereto where applicable for the respective fiscal years. The selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results...

  • Page 8
    ...2009 represents executive stock compensation 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 starting in the third quarter of 2009. (f) Working capital is de...

  • Page 9
    ...; 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 purifiers, fans, heaters and humidifiers, for home use...

  • Page 10
    ...® brand. Its home care portfolio includes sponges, rubber gloves and related cleaning products for industrial, professional and retail uses sold primarily under the Mapa® and Spontex® brands. The Acquisition is expected to expand the Company's product offerings and distribution channels into new...

  • Page 11
    ... a complete product line in conventional cleaning supplies to offer our retailers both domestically and internationally. Quickie is reported in the Company's Branded Consumables segment and is included in the Company's results of operations from December 17, 2010. The combined cash purchase price...

  • Page 12
    Management's Discussion and Analysis Jarden Corporation Annual Report 2010 Consolidated Results of Operations Years Ended December 31, (In millions) Net sales Cost of sales Gross profit Selling, general and administrative expenses Reorganization and acquisition-related integration costs, net ...

  • Page 13
    ...not designated as effective hedges ($10.6 million). Additionally, the Company recorded a fair value adjustment related to the recovery of a long-term note from a prior investment, partially offset by a fair value adjustment of a lease termination. Operating earnings for 2010 in the Outdoor Solutions...

  • Page 14
    Management's Discussion and Analysis Jarden Corporation Annual Report 2010 Results of Operations-Comparing 2009 to 2008 Net Sales Operating Earnings (Loss) Years Ended December 31, (In millions) Outdoor Solutions Consumer Solutions Branded Consumables Process Solutions Corporate Intercompany ...

  • Page 15
    Management's Discussion and Analysis Jarden Corporation Annual Report 2010 In the fourth quarter of 2009, the Company's impairment test resulted in a non-cash charge of $12.8 million to reï¬,ect impairment of goodwill in the Company's Branded Consumables segment. The impairment charge was recorded ...

  • Page 16
    ... Jarden Corporation Annual Report 2010 Cash Flows from Operating Activities Net cash provided by operating activities was $289 million and $641 million for 2010 and 2009, respectively. The change is primarily due to a higher year over year inventory build as the Company returns to growing its sales...

  • Page 17
    ...common stock under this stock repurchase program at an average price of $29.62 per share. At December 31, 2010, approximately $55 million remains available under this stock repurchase program. In April 2009, the Company completed an equity offering of 12.0 million newly-issued shares of common stock...

  • Page 18
    ... Jarden Corporation Annual Report 2010 Risk Management From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price ï¬,uctuations. The Company does not enter into derivative transactions for trading purposes...

  • Page 19
    Management's Discussion and Analysis Jarden Corporation Annual Report 2010 In January 2010, the Company entered into foreign currency contracts to purchase = C 125 million as a hedge against the Euro purchase price of the Acquisition. These foreign currency contracts, which matured on April 1, 2010,...

  • Page 20
    ... of acquisitions in prior years, the Company has significant intangible assets on its balance sheet that include goodwill and indefinite-lived intangibles (primarily trademarks and tradenames). The Company's goodwill and indefinite-lived intangibles are tested and reviewed for impairment annually...

  • Page 21
    ...lived intangible assets, the recoverability of these amounts is dependent upon achievement of the Company's projections and the execution of key initiatives related to revenue growth and improved profitability. As a result of the 2010 annual impairment testing, the enterprise value of all reporting...

  • Page 22
    ...product recall actions and higher than anticipated rates of warranty returns or other returns of goods. Each year the Company sets its product liability insurance program, which is an occurrence-based program, based on current and historical claims experience and the availability and cost of related...

  • Page 23
    Management's Discussion and Analysis Jarden Corporation Annual Report 2010 New and Pending Accounting Pronouncements During 2010, 2009 and 2008, the Company adopted various accounting standards. A description of these standards and their effect on the consolidated financial statements are described...

  • Page 24
    ... for Registrant's Common Equity Jarden Corporation Annual Report 2010 Market; Market Price; and Dividends for Registrant's Common Equity Jarden Corporation's (the "Company" or "Jarden") common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "JAH." As of February 15, 2011...

  • Page 25
    Market for Registrant's Common Equity Jarden Corporation Annual Report 2010 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 26
    ... with the policies or procedures may deteriorate. As required by Section 404 of the Sarbanes-Oxley Act of 2002, management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth...

  • Page 27
    ... of Independent Registered Public Accounting Firm Jarden Corporation Annual Report 2010 To the Board of Directors and Stockholders of Jarden Corporation: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, stockholders' equity and cash...

  • Page 28
    Consolidated Statements of Operations Jarden Corporation Annual Report 2010 Years Ended December 31, (In millions, except per share amounts) Net Sales Cost of Sales Gross profit Selling, general and administrative expenses Reorganization and acquisition-related integration costs, net Impairment of...

  • Page 29
    ... Sheets Jarden Corporation Annual Report 2010 As of December 31, (In millions, except per share amounts) Assets Cash and cash equivalents Accounts receivable, net of allowances of $64.7 in 2010, $60.7 in 2009 Inventories Deferred taxes on income Prepaid expenses and other current assets Total...

  • Page 30
    ... fees Repurchase of common stock and shares tendered for taxes Debt issuance costs Dividends paid Other, net Net cash provided by (used in) financing activities Cash ï¬,ows from investing activities: Additions to property, plant and equipment Acquisition of businesses, net of cash acquired...

  • Page 31
    ... Statements of Changes in Stockholder's Equity Jarden Corporation Annual Report 2010 Accumulated Additional Other Paid-In Retained Comprehensive Shares Amount Shares Amount Shares Amount Capital Earnings Income (Loss) Common Stock Treasury Stock Preferred Stock (In millions) Balance, December 31...

  • Page 32
    ... in Stockholder's Equity (continued) Jarden Corporation Annual Report 2010 Accumulated Other Comprehensive Income (Loss) Common Stock Treasury Stock Preferred Stock Retained Earnings (In millions) Balance, December 31, 2009 Net income Comprehensive income: Cumulative translation adjustment...

  • Page 33
    ...ficant 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 34
    ... to fair value. The Company provides for depreciation primarily using the straight-line method in amounts that allocate the cost of property, plant and equipment over the following ranges of useful lives: Buildings and improvements Machinery, equipment and tooling (includes capitalized software...

  • Page 35
    ...to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) the fair value of the reporting unit, the Company is required to proceed to the second step. In the second step, the fair value of the reporting unit...

  • Page 36
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) credit review procedures. Collateral for trade receivables is generally not required. The Company places its interest-bearing cash equivalents ...

  • Page 37
    ... performance or market vesting conditions, the Company excludes these awards from diluted earning per share computations until the contingency is met as of the end of that reporting period. Pension and Postretirement Benefit Plans The Company records annual amounts relating to its pension and...

  • Page 38
    ... Financial Statements Jarden Corporation Annual Report 2010 (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 October 2009, the FASB issued ASU 2009-13, which requires companies...

  • Page 39
    ...® brand. Its home care portfolio includes sponges, rubber gloves and related cleaning products for industrial, professional and retail uses sold primarily under the Mapa® and Spontex® brands. The Acquisition is expected to expand the Company's product offerings and distribution channels into new...

  • Page 40
    ... Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) 2009 Activity During 2009, the Company completed three tuck-in acquisitions that by nature are complementary to the Company's core businesses and from an accounting...

  • Page 41
    ...'s annual impairment test resulted in a non-cash charge of $172 to reï¬,ect impairment of goodwill in the Company's Branded Consumables and Outdoor Solutions segments. In the Branded Consumables segment, the impairment charge was recorded within the Firelog, Lehigh and United States Playing Cards...

  • Page 42
    ... recorded relates to certain tradenames within this segment's small kitchen and household appliance businesses. The impairment within the Consumer Solutions segment is primarily due to: the Company's decision to strategically realign certain brand names; increased competition in certain markets...

  • Page 43
    ... Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) The estimated future amortization expense related to amortizable intangible assets at December 31, 2010 is as follows: Amount (in millions) $ 18.6 16.8 15.9 14.7 14.1 178.7 Years...

  • Page 44
    ...$250 of the senior secured credit facility term loans, with the balance used for general corporate purposes. Beginning in January 2015, the Company may redeem all or part of these 7 1/2% senior subordinated notes due 2020 at specified redemption prices ranging from approximately 100% to 104% of the...

  • Page 45
    ... at a margin over the commercial paper rate. Under the Securitization Facility, substantially all of the Company's Outdoor Solutions, Consumer Solutions and Branded Consumables domestic accounts receivable are sold to a special purpose entity, Jarden Receivables, LLC ("JRLLC"), which is a wholly...

  • Page 46
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) The Company's debt maturities for the five years following December 31, 2010 and thereafter are as follows: Amount (in millions) $ 434.6 157.5...

  • Page 47
    ... in the fair market value of this cross-currency swap are recorded as an offset to the corresponding long-term debt. Foreign Currency Contracts The Company uses foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash ï¬,ows related to forecasted inventory...

  • Page 48
    ... Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) The following table presents gain and loss activity (on a pretax basis) for 2010 and 2009 related to derivative financial instruments designated as effective hedges: 2010...

  • Page 49
    ...Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) Operating lease commitments at December 31, 2010 are as follows: Amount (in millions) $ 65.3 57.0 48.5 41.2 36.2 87.2 Years Ending December 31, 2011 2012 2013 2014 2015 Thereafter Total...

  • Page 50
    ... 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 its product liability insurance program which is...

  • Page 51
    ... Intangibles Goodwill Financial reporting amount of a subsidiary in excess of tax basis Foreign earnings not permanently reinvested Property and equipment Other Gross deferred tax liabilities Net operating loss Accounts receivable allowances Inventory valuation Pension and postretirement Stock-based...

  • Page 52
    ... Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) At December 31, 2010, the Company had net operating losses ("NOLs") of approximately $1 billion for domestic tax purposes. Of this amount, approximately $1 billion were acquired...

  • Page 53
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) Stock Options A summary of the Company's stock option activity in 2010, 2009 and 2008 is as follows: 2010 Weighted Average Exercise Price 2009...

  • Page 54
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) A summary of the Company's restricted share activity for 2010, 2009 and 2008 is as follows: Weighted Average Fair Value $ 33.98 19.51 30.18 31....

  • Page 55
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) Stockholders' Equity In March 2010, the Board authorized a $50 increase in the Company's existing stock repurchase program to allow the Company to...

  • Page 56
    ... Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) Net Periodic Expense The components of net periodic pension and postretirement benefit expense for 2010, 2009 and 2008 are as follows: Pension Benefits 2010 2009 Total...

  • Page 57
    ...to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (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 58
    ... of equities and fixed income investments are used to maximize the long-term return of pension plan assets. The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is established through careful consideration of plan liabilities...

  • Page 59
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) The composition of domestic pension plan assets at December 31, 2010 and 2009 is as follows: Fair Value Measurements of Plan Assets - Domestic ...

  • Page 60
    ... Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) The activity for Level 3 pension plan assets for 2010 and 2009 is a follows: Level 3 Pension Plan Assets (In millions) Balance, December 31, 2008 Actual return on plan assets: Relating...

  • Page 61
    ... $ $ $ $ (In millions) Charged to Results of Operations: Outdoor Solutions Branded Consumables Process Solutions Corporate Subtotal Capitalized as a Cost of Acquisition: Outdoor Solutions Corporate Employee Terminations Other Charges Impairment Total $ 14.7 7.4 3.6 4.1 29.8 2.5 0.4 $ 17...

  • Page 62
    ... Consolidated Financial Statements Jarden Corporation Annual Report 2010 (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 63
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) The activity related to accrued reorganization costs as of and for the years ended December 31, 2010 and 2009 is as follows: Accrual Balance at...

  • Page 64
    ...; 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 purifiers, fans, heaters and humidifiers, for home use...

  • Page 65
    ... Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) Segment information as of and for the years ended December 31, 2010, 2009 and 2008 is as follows: 2010 Outdoor Solutions Consumer Branded Solutions Consumables Process Solutions Total...

  • Page 66
    ... Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) 2008 Outdoor Solutions Consumer Branded Solutions Consumables Process Solutions Total Intercompany Operating Eliminations Segments Corporate/ Unallocated Consolidated (In millions) Net Sales...

  • Page 67
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) 19. Condensed Consolidating Financial Data The Company's Senior Notes and Senior Subordinated Notes (see Note 9) are fully guaranteed, jointly ...

  • Page 68
    ... Statements Jarden Corporation Annual Report 2010 (Dollars in millions, except per share data and unless otherwise indicated) Condensed Consolidating Balance Sheets As of December 31, 2010 Guarantor Non-Guarantor Subsidiaries Subsidiaries Eliminations (In millions) Assets Current assets Investment...

  • Page 69
    ... long-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 and earnout payments Other Net cash used in investing activities Effect...

  • Page 70
    ... on long-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 used in investing activities Effect of exchange rate...

  • Page 71
    ...6757 Consumer Solutions Bionaire®, Crock-Pot®, FoodSaver®, Health o meter®, Holmes®, Mr. Coffee®, Oster®, Patton®, Rival®, Seal-a-Meal®, Sunbeam®, VillaWare® Boca Raton, FL 561-912-4100 Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP New York, New York Branded...

  • Page 72