Sunbeam 2011 Annual Report Download

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Proud of
our past,
embracing
our future
Annual Report 2011

Table of contents

  • Page 1
    Annual Report 2011 Proud of our past, embracing our future

  • Page 2
    ... of Segment Earnings to GAAP Operating Earnings please see p. 14. Each year Jarden employees submit creative ideas for the cover of our Annual Report. The winners of this year's annual report contest were David Kittle - Jarden Outdoor Solutions and Olga Gavrilyuk - Jarden Branded Consumables.

  • Page 3
    Table of Contents Letter to Our Shareholders Outdoor Solutions Consumer Solutions Branded Consumables Select Industry and Product Awards Selected Financial Data Management's Discussion & Analysis 2 6 8 10 12 13 15 Financial Statements 34 1

  • Page 4
    Dear Fellow Shareholders March, 2012 Office of the Chairman Martin E. Franklin (Center) Founder Executive Chairman Ian G.H. Ashken (Left) Co-Founder Vice Chairman Chief Financial Officer James E. Lillie (Right) Chief Executive Officer 2

  • Page 5
    ... in terms of total rate of return to shareholders over the last decade within the Consumer Products category. On September 24, 2001, the day we were appointed as the new management team, the shares of the Company (fka Alltrista Corporation) closed at $2.38, on a split adjusted basis. $1,000 invested...

  • Page 6
    ..., opportunistic acquisition strategy; and third, effectively managing our capital structure. from 4.5% in 2008, our goal is to deliver gross margin expansion of 50 basis points per year, while maintaining brand investment levels to help drive future revenue growth at our target long-term average...

  • Page 7
    ... our targeted range for our bank leverage ratio. With additional excess cash, we seek strategic acquisitions to provide new avenues for profitable growth, or, when we believe our own Company represents the best available investment opportunity, we repurchase shares. In August of 2011, the Board...

  • Page 8
    Outdoor Solutions World's largest hard goods sporting company. A global provider of innovative, recreational and high-performance products designed to maximize consumers' enjoyment of the outdoors $2,722m 2011 net sales $345m 2011 Segment Earnings 6 Non-GAAP: See GAAP Reconciliation p. 69.

  • Page 9
    7

  • Page 10
    Consumer Solutions Global provider of products designed to enhance the daily lives of consumers in and around the home; making otherwise mundane experiences more satisfying $1,880m 2011 net sales $275m 2011 Segment Earnings 8 Non-GAAP: See GAAP Reconciliation p. 69.

  • Page 11
    9

  • Page 12
    Branded Consumables Leading provider of primarily niche, affordable consumable household staples used in and around the home $1,734m 2011 net sales $238m 2011 Segment Earnings 10 Non-GAAP: See GAAP Reconciliation p. 69.

  • Page 13
    11

  • Page 14
    ...products and we are focused on innovation. We are also proud to share a sample of awards received. Our Execution Approach Enhances Value Jarden maintains continual, insightful visibility into our operations. Our businesses operate on sophisticated financial systems, which feed into our headquarters...

  • Page 15
    Selected Financial Data Jarden Corporation Annual Report 2011 The following tables set forth the Company's selected financial data as of and for the years ended December 31, 2011, 2010, 2009, 2008 and 2007. The selected financial data set forth below has been derived from the audited consolidated ...

  • Page 16
    ... executive stock compensation resulting from a strategic review of executive long-term incentive compensation. (e) In January 2012, the Company announced that the Board had decided to suspend the Company's dividend program following the dividend paid on January 31, 2012. (f) Working capital...

  • Page 17
    ...array of products that include camping and outdoor equipment such as air beds, camping stoves, coolers, foldable furniture, gas grills, lanterns and ï¬,ashlights, propane fuel, sleeping bags, tents and water recreation products such as inï¬,atable boats, kayaks and tow-behinds. The Outdoor Solutions...

  • Page 18
    ...: clippers and trimmers for professional 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; home environment...

  • Page 19
    .... 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. Mapa Spontex is reported in the Company's Branded Consumables segment and is included in the Company's results of...

  • Page 20
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 Consolidated Results of Operations Years Ended December 31, (In millions) Net sales Cost of sales Gross profit Selling, general and administrative expenses Reorganization costs, net Impairment of goodwill and intangibles ...

  • Page 21
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 Net Sales Net sales for 2011 increased $657 million, or 10.9%, to $6.7 billion versus the same period in the prior year. Acquisitions provided net sales growth of approximately 6%. Excluding acquisitions, sales increased ...

  • Page 22
    ... of debt ($12.8 million) recorded in 2011. Results of Operations-Comparing 2010 to 2009 Net Sales Operating Earnings (Loss) Years Ended December 31, (In millions) Outdoor Solutions Consumer Solutions Branded Consumables Process Solutions Corporate Intercompany eliminations 2010 $ 2,518...

  • Page 23
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 and food preparation categories and certain personal care and wellness categories, which is primarily due to new product placements; increased point of sales; increased sell-through for seasonal products at certain major ...

  • Page 24
    ... million versus $138 million in 2010. The Company expects to maintain capital expenditures at an annualized run-rate in the range of approximately 2.0% to 2.5% of net sales. Dividends In December 2011, the Board declared a quarterly cash dividend of $0.08625 per share of the Company's common stock...

  • Page 25
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 CAPITAL RESOURCES In March 2011, the Company completed the Facility, which is comprised of: • a $525 million senior secured term loan A facility maturing in March 2016, that bears interest at LIBOR plus a spread of 225 ...

  • Page 26
    ...'s Discussion and Analysis Jarden Corporation Annual Report 2011 Contractual Obligations and Commercial Commitments The following table includes aggregate information about the Company's contractual obligations as of December 31, 2011 and the periods in which payments are due. Certain of these...

  • Page 27
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 rate risk attributable to forecasted variable interest payments and have maturity dates through December 2015. At December 31, 2011, the weighted average fixed rate of interest on these swaps, excluding the forward-starting ...

  • Page 28
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 Revenue Recognition and Allowance for Product Returns The Company recognizes revenues at the time of product shipment or delivery, depending upon when title passes, to unaffiliated customers, and when all of the following ...

  • Page 29
    ... Company believes that its long-term growth strategy supports its fair value conclusions. For both goodwill and indefinite-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...

  • Page 30
    ... and Analysis Jarden Corporation Annual Report 2011 geography and market capitalization through investments in U.S. large-capitalization stocks, U.S. small-capitalization stocks and international securities. Investment risk is measured and monitored on an ongoing basis through annual liability...

  • Page 31
    Management's Discussion and Analysis Jarden Corporation Annual Report 2011 New and Pending Accounting Pronouncements During 2011, 2010 and 2009, the Company adopted various accounting standards. A description of these standards and their effect on the consolidated financial statements are described...

  • Page 32
    ... for Registrant's Common Equity Jarden Corporation Annual Report 2011 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, 2012...

  • Page 33
    Market for Registrant's Common Equity Jarden Corporation Annual Report 2011 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 34
    ... Report Jarden Corporation Annual Report 2011 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 the Exchange...

  • Page 35
    ... Public Accounting Firm Jarden Corporation Annual Report 2011 To the Board of Directors and Stockholders of Jarden Corporation: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' equity and cash ï¬,ows present fairly...

  • Page 36
    ... Jarden Corporation Annual Report 2011 Years Ended December 31, (In millions, except per share amounts) Net Sales Cost of Sales Gross profit Selling, general and administrative expenses Reorganization costs, net Impairment of goodwill, intangibles, and other assets Operating earnings Interest...

  • Page 37
    ... Sheets Jarden Corporation Annual Report 2011 As of December 31, (In millions, except per share amounts) Assets Cash and cash equivalents Accounts receivable, net of allowances of $83.9 in 2011, $64.7 in 2010 Inventories Deferred taxes on income Prepaid expenses and other current assets Total...

  • Page 38
    ..., net of transaction 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...

  • Page 39
    Consolidated Statements of Changes in Stockholders' Equity Jarden Corporation Annual Report 2011 Common Stock Treasury Stock Shares Amount Accumulated Other Comprehensive Income (Loss) (In millions) Balance, December 31, 2008 Net income Comprehensive income: Cumulative translation adjustment ...

  • Page 40
    ... Jarden Corporation Annual Report 2011 1. Business and Significant Accounting Policies Business Jarden Corporation and its subsidiaries (hereinafter referred to as the "Company" or "Jarden") is a leading provider of a diverse range of consumer products with a portfolio of over 100 brands sold...

  • Page 41
    ... 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 42
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2011 Goodwill and Intangible Assets Goodwill and certain intangibles (primarily trademarks and tradenames) are not amortized; however, they are subject to evaluation for impairment using a fair value based test. This evaluation...

  • Page 43
    ... per share data and unless otherwise indicated) Disclosures about Fair Value of Financial Instruments and Credit Risk The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair market values due to the short-term maturities...

  • Page 44
    ... Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The following table summarizes assets and liabilities that are measured at fair value on a recurring basis at December 31, 2011 and 2010: 2011 Fair Value...

  • Page 45
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) restricted share awards with only service conditions, the Company recognizes compensation cost on a straight-line basis over the explicit ...

  • Page 46
    ...® 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 47
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The combined cash purchase price, net of cash acquired, for the Aero and Quickie acquisitions was approximately $270, subject to certain ...

  • Page 48
    ... in 2010 of forecasted sales to a major customer. In 2009, the Company's annual impairment test resulted in a non-cash charge of $12.8 to reï¬,ect impairment of goodwill in the Company's Branded Consumables segment. The impairment charge was recorded within the Arts and Crafts business unit. The...

  • Page 49
    ... Foreign Exchange Net Book Value at December 31, 2011 (Dollars in millions, except per share data and unless otherwise indicated) (In millions) Intangibles Patents Non-compete agreements Manufacturing process and expertise Brand names Customer relationships and distributor channels Trademarks and...

  • Page 50
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2011 Impairments-2010 The non-cash impairment charge recorded within the Branded Consumables segment during the second quarter of 2010 reï¬,ects the impairment of certain tradenames within this segment's Arts and Crafts business...

  • Page 51
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 8. Warranty Reserve Warranty reserve activity for 2011 and 2010 is as follows: (In millions) Warranty reserve at January 1, Provision for warranties issued Warranty claims paid Acquisitions and other adjustments ...

  • Page 52
    ... 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 53
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The Facility contains a covenant that restricts the Company and its subsidiaries from making certain "restricted payments" (any dividend or ...

  • Page 54
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) At December 31, 2011, the Company had $750 notional amount outstanding in swap agreements, which include $350 notional amount of forward-...

  • Page 55
    ...Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The following table presents gain and loss activity (on a pretax basis) for 2011, 2010 and 2009 related to derivative financial instruments designated as effective...

  • Page 56
    ...-line basis over the term of the lease. Also, certain equipment used in Company operations is leased under operating leases. Operating lease commitments for the five years following December 31, 2011 and thereafter are as follows: Years Ending December 31, 2012 2013 2014 2015 2016 Thereafter Total...

  • Page 57
    ... 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 their business. Annually, the Company sets its product liability insurance program which...

  • Page 58
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (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 from ...

  • Page 59
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The Company continually reviews the adequacy of the valuation allowance. A valuation allowance is recorded if, based on the weight of ...

  • Page 60
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The Company conducts business globally and, as a result, the Company or its subsidiaries file income tax returns in the U.S. federal ...

  • Page 61
    ... Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The Company does not use cash to settle any of its options or restricted share awards and when available issues shares from its treasury stock instead of issuing new shares...

  • Page 62
    ...Consolidated Financial Statements Jarden Corporation Annual Report 2011 Stockholders' Equity In August 2011, the Board authorized a new stock repurchase program that would allow the Company to repurchase up to $500 of its common stock (the "Stock Repurchase Program"). During August 2011, the Company...

  • Page 63
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 Net Periodic Expense The components of net periodic pension and postretirement benefit expense for 2011, 2010 and 2009 are as follows: Pension Benefits 2011 2010 Total $ 2.1 18.7 (17.0) 3.2 7.0 1.6 $ 8.6 Domestic ...

  • Page 64
    ... Financial Statements Jarden Corporation Annual Report 2011 Funded Status The following table provides a reconciliation of the benefit obligation, plan assets and the funded status of the pension and postretirement plans as of December 31, 2011 and 2010: Pension Benefits 2011 2010 Total...

  • Page 65
    ... investments in U.S. large-capitalization stocks, U.S. small-capitalization stocks and international securities. The domestic fixed income investments are primarily comprised of investment-grade and high-yield securities through investments in corporate and government bonds, government agencies...

  • Page 66
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The composition of domestic pension plan assets at December 31, 2011 and 2010 is as follows: Fair Value Measurements of Plan Assets - Domestic...

  • Page 67
    ... Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) The activity for Level 3 pension plan assets for 2011 and 2010 is as follows: Level 3 Pension Plan Assets (In millions) Balance, December 31, 2009 Actual return...

  • Page 68
    ...Jarden Corporation Annual Report 2011 16. Reorganization Costs The Company did not incur any reorganization costs in 2010. Reorganization costs for 2011 and 2009 are as follows: 2011 (Dollars in millions, except per share data and unless otherwise indicated) (In millions) Outdoor Solutions Consumer...

  • Page 69
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) Accrued reorganization costs activity for 2011 and 2010 are as follows: Accrual Balance at December 31, 2010 Reorganization Costs Foreign ...

  • Page 70
    ...array of products that include camping and outdoor equipment such as air beds, camping stoves, coolers, foldable furniture, gas grills, lanterns and ï¬,ashlights, propane fuel, sleeping bags, tents and water recreation products such as inï¬,atable boats, kayaks and tow-behinds. The Outdoor Solutions...

  • Page 71
    ... Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) Segment information as of and for the years ended December 31, 2011, 2010 and 2009 is as follows: 2011 Outdoor Solutions Consumer Branded Solutions Consumables Process Solutions Total...

  • Page 72
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 (Dollars in millions, except per share data and unless otherwise indicated) 2009 Outdoor Solutions Consumer Branded Solutions Consumables Process Solutions Total Intercompany Operating Eliminations Segments Corporate/ ...

  • Page 73
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2011 19. Condensed Consolidating Financial Data The Company's Senior Notes and Senior Subordinated Notes (see Note 9) are fully guaranteed, jointly and severally, by certain of the Company's domestic subsidiaries ("Guarantor...

  • Page 74
    ...Consolidated Financial Statements Jarden Corporation Annual Report 2011 Condensed Consolidating Balance Sheets As of December 31, 2011 (Dollars in millions, except per share data and unless otherwise indicated) (In millions) Assets Current assets Investment in subsidiaries Non-current assets Total...

  • Page 75
    ... 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 of exchange rate changes on cash Net...

  • Page 76
    ... 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 of exchange rate changes on cash Net...

  • Page 77
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  • Page 78
    Reconciliation of GAAP to Non-GAAP Measures Jarden Corporation Annual Report 2011 Year Ended December 31, 2011 Reconciliation of Non- GAAP measure Net sales growth (Acquisitions)/Exited business, net Foreign exchange impacts Organic net sales growth 10.9% (5.9%) 5.0% (1.7%) 3.3% 76

  • Page 79
    ... is listed on the New York Stock Exchange. Symbol: JAH Corporate Headquarters Jarden Corporation 555 Theodore Fremd Avenue Rye, NY 10580 Telephone: 914-967-9400 Facsimile: 914-967-9405 www.jarden.com Investor Relations ICR, Inc. Norwalk, CT 203-682-8200 NYSE Corporate Governance Disclosure Jarden...

  • Page 80