Sunbeam 2012 Annual Report Download

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2012
Annual Report
1
STRATEGIC DIRECTION
4
BUSINESS SEGMENTS
70
MANUFACTURING CENTERS
8
STRANDS OF JARDEN’S DNA
120
POWERFUL BRANDS
100
COUNTRIES WHERE OUR PRODUCTS ARE SOLD
371
FORTUNE 500 RANK
15,000
RETAIL CUSTOMERS
25,000
EMPLOYEES
6,700,000,000
NET SALES $

Table of contents

  • Page 1
    2012 Annual Report STRATEGIC DIRECTION 1 BUSINESS SEGMENTS 4 STRANDS OF JARDEN'S DNA 8 70 100 120 371 15,000 25,000 6,700,000,000 POWERFUL BRANDS FORTUNE 500 RANK RETAIL CUSTOMERS EMPLOYEES NET SALES $ MANUFACTURING CENTERS COUNTRIES WHERE OUR PRODUCTS ARE SOLD

  • Page 2
    ... and Develop the Best Talent Support the Individual, but Encourage Teamwork Think Lean, Act Large Listen, Learn and Innovate Deliver Exceptional Financial Results Have Fun, Work Hard and Execute Enhance the Communities in which we Operate Selected Financial Data Management's Discussion & Analysis...

  • Page 3
    ...of this year's annual report cover contest were Sherry Xue, Jarden Branded Consumables, China and Fabiein Dos Santos, Jarden Branded Consumables, France. Have Fun, Work Hard 04 Listen, Learn and Innovate Support the Individual, but Encourage Teamwork Better Act Large Retain and Develop the Best...

  • Page 4
    ... our own stock as an attractive investment opportunity compared to many of the outside acquisition opportunities that we evaluate on a regular basis. We also completed Jarden's first convertible notes offering in 2012, which was a timely and successful addition to our capital structure. We believe...

  • Page 5
    ... Earnings please see p. 76. which we work. As an example, Jarden spends on average in excess of one million dollars per day on brand and product development. We challenge ourselves to bring products to the market which genuinely enhance the everyday lives of consumers who use them. This focus helps...

  • Page 6
    ...retail store opened in Colorado in 2012. This store exemplifies one of the targeted growth initiatives behind the Marmot brand. Please see page 76 for a GAAP reconciliation of certain non-GAAP financial information. James E. Lillie Chief Executive Officer 4 Jarden Corporation Annual Report 2012

  • Page 7
    ... to have received over 150 awards in 2012. A selection of award winning products are included below. "Best Salt Water Reel" PENN Spinfisher Coleman Instant Tent "Best Buy" Volkl's Award Winning Freeski $384m 2012 CREATE-A-CROCK™ Brand Equity Investment Personalized Crock-Pot Slow Cooker...

  • Page 8
    ... Miken Operations Team are developing a "Just in Time" manufacturing process for composite bats. Consumer Solutions University was launched in 2012. K2 Brand 50th Anniversary in 2012 Manufacturing Centers 6 Jarden Corporation Annual Report 2012 70 'Lean' manufacturing process improvement...

  • Page 9
    ...events with our Executive Chairman and CEO. This year Martin and Jim ran five 10Ks in 5 countries in 4 days with over 1,000 fellow employees. 25+ First Alert Mexico Manufacturing Center was named the winner of the Jarden Manufacturing Excellence Award for "Best Overall" Zinc Products Manufacturing...

  • Page 10
    ... the center. Consumer Solutions and Branded Consumables co-develop our first Fresh Preserving Appliance Lean manufacturing efforts in our Indiana Ball Jar manufacturing center are focused on reducing machine changeover time to reduce inventory levels. 8 Jarden Corporation Annual Report 2012

  • Page 11
    .... Manufacturing Improvement Council reduce machine changeover time to improve machine throughput. Mr. Coffee Product Team developed a single serve coffee machine with a reservoir to respond to the desire for faster repeat brews. Coleman developed the first grill which can be stored vertically...

  • Page 12
    ... throughout Europe with the "Wash-ups" glove and leveraging First Alert distribution to expand in the U.S. Best Selling NUK "Learner Cup" Marmot's Best Selling Basic Work Glove Cash on Hand $1.0 billion As of 12/31/12 Berkley Top Selling Fishing Line 10 Jarden Corporation Annual Report 2012

  • Page 13
    ... the world. Asia Technical Center Annual Dinner $480m Consolidated Cash Flow from Operations Marmot opened a London, England store during the year and finished 2012 with a total of 36 managed retail locations. Coleman Australia employees on an overnight camping trip to conduct product testing...

  • Page 14
    ... "Autism Speaks" Lantern Coleman's New Headquarters near Denver, Colorado relocated in 2012 15%+ Reduction in Waste Disposal Enterprise-Wide in 2012 Jarden technical center team participate in a tree planting event in Guangzhou, China Quickie donated 5,000 cleaning tools for Super Storm Sandy...

  • Page 15
    ... earnings (loss) per share (a) OTHER FINANCIAL DATA Net cash provided by operating activities Net cash provided by (used in) financing activities Net cash used in investing activities Depreciation and amortization Capital expenditures Cash dividends declared per common share (d) BALANCE SHEET DATA...

  • Page 16
    Selected Financial Data Jarden Corporation Annual Report 2012 (b) The results of Mapa Spontex Baby Care and Home Care businesses, Aero Products International, Inc. and Quickie Manufacturing Corporation are included from their dates of acquisition of April 1, 2010, October 1, 2010 and December 17, ...

  • 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
    ... Analysis Jarden Corporation Annual Report 2012 The Process Solutions segment manufactures, markets and distributes a wide variety of plastic products including closures, contact lens packaging, medical disposables, plastic cutlery and rigid packaging. Many of these products are consumable in nature...

  • Page 19
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 In addition, the Company completed three tuck-in acquisitions during 2010, including the acquisition of Aero Products International, Inc. ("Aero") on October 1, 2010 and the acquisition of Quickie Manufacturing Corporation ("...

  • Page 20
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 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
    ...SG&A SG&A for 2012 increased $61.3 million, or 4.9%, to $1.3 billion versus the prior year. The increase is primarily due to an increase in marketing and product development costs (approximately $18 million) related to the Company's investment in brand equity, an increase in stock-based compensation...

  • Page 22
    ... shares outstanding decreased approximately 11%, primarily due to the Company's stock repurchase program (see "Capital Resources"). Results of Operations-Comparing 2011 to 2010 Net Sales Operating Earnings (Loss) Years Ended December 31, (In millions) Outdoor Solutions Consumer Solutions Branded...

  • Page 23
    ...ï¬,ecting lower levels of revenues and margins in the business than originally forecasted. During 2011, the Company also recorded a $9.1 million impairment charge within the Branded Consumables segment related to the impairment of an equity basis investment. Jarden Corporation Annual Report 2012 21

  • Page 24
    ... working capital movements, primarily related to the timing of the purchase of comparatively lower seasonal inventory levels in certain businesses and the corresponding effect on accounts payable. Cash Flows from Financing Activities Net cash provided by (used in) financing activities for 2012...

  • Page 25
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 CAPITAL RESOURCES In September 2012, the Company completed a private offering for the sale of $500 million aggregate principal amount of the Convertible Notes to qualified institutional buyers pursuant to Rule 144A under the...

  • Page 26
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 Contractual Obligations and Commercial Commitments The following table includes aggregate information about the Company's contractual obligations as of December 31, 2012 and the periods in which payments are due. Certain of ...

  • Page 27
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 Forward 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 purchases and sales and have maturity ...

  • Page 28
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 Income Taxes The Company records a valuation allowance to reduce its deferred tax assets to the amount that the Company believes is more likely than not to be realized. While the Company has considered future taxable income ...

  • Page 29
    ... stocks, U.S. small-capitalization stocks and international securities. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. Jarden Corporation Annual Report 2012...

  • Page 30
    ... Analysis Jarden Corporation Annual Report 2012 The expected long-term rate of return for plan assets is based upon many factors including expected asset allocations, historical asset returns, current and expected future market conditions, risk and active management premiums. The prospective target...

  • Page 31
    Management's Discussion and Analysis Jarden Corporation Annual Report 2012 New and Pending Accounting Pronouncements During 2012, 2011 and 2010, 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 2012 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, 2013...

  • Page 33
    Market for Registrant's Common Equity Jarden Corporation Annual Report 2012 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 2012 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
    ... of Independent Registered Public Accounting Firm Jarden Corporation Annual Report 2012 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, of comprehensive income, of...

  • Page 36
    ...Jarden Corporation Annual Report 2012 Years Ended December 31, (In millions, except per share amounts) Net Sales Cost of Sales Gross profit Selling... on investment Total other comprehensive loss, before tax Income tax benefit related to other comprehensive loss Comprehensive income $ 2012 2011 ...

  • Page 37
    ... Sheets Jarden Corporation Annual Report 2012 As of December 31, (In millions, except per share amounts) Assets Cash and cash equivalents Accounts receivable, net of allowances of $79.7 in 2012, $83.9 in 2011 Inventories Deferred taxes on income Prepaid expenses and other current assets Total...

  • Page 38
    ...fits from stock-based compensation 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 Other Net cash used in investing activities Effect of exchange rate...

  • Page 39
    ...Corporation Annual Report 2012 Common Stock Treasury Stock Shares Amount Accumulated Other Comprehensive Income (Loss) (In millions) Balance, December 31, 2009 Comprehensive income Restricted stock awards, stock options exercised and stock plan purchases Restricted stock awards cancelled and shares...

  • Page 40
    ... Annual Report 2012 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 trusted, quality brands sold...

  • Page 41
    ... located throughout Asia, Canada, Europe, Latin America and the United States. Approximately 20%, 20% and 21% of the Company's consolidated net sales in 2012, 2011 and 2010, respectively, were to a single customer who purchased product from the all of the Company's business segments. Cash and Cash...

  • Page 42
    ... applicable to current product sales that may indicate a deviation from such historical claim rate trends. Warranty reserves are included within "Other current liabilities" and "Other non-current liabilities" in the Company's consolidated balance sheets. 40 Jarden Corporation Annual Report 2012

  • Page 43
    ... Financial Statements Jarden Corporation Annual Report 2012 Sales Incentives and Trade Promotion Allowances The Company offers various sales incentives and trade promotional programs to its reseller customers from time to time in the normal course of business. These incentives and trade promotions...

  • Page 44
    .... Fair values are determined by the Company using market prices obtained from independent brokers or determined using valuation models that use as their basis readily observable market data that is actively quoted and can be validated through external sources, including independent pricing services...

  • Page 45
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2012 Stock-Based Compensation The Company estimates the fair value of share-based awards on the date of grant, which is generally the date the award is approved by the Board of Directors of the Company (the "Board") or committee...

  • 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
    ...to Consolidated Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) In addition, the Company completed three tuck-in acquisitions during 2010. On October 1, 2010, the Company acquired Aero Products International, Inc...

  • Page 48
    ..., the Company's annual impairment test, in connection with fourth quarter triggering events, resulted in a non-cash charge to reï¬,ect impairment of goodwill in the Company's Branded Consumables segment. The impairment charge was recorded primarily within the United States Playing Cards business and...

  • Page 49
    ... Consolidated Financial Statements Jarden Corporation Annual Report 2012 Intangibles activity for 2012 and 2011 is as follows: Gross Carrying Amount at December 31, 2011 Accumulated Amortization and Foreign Exchange Net Book Value at December 31, 2012 (Dollars in millions, except per share data and...

  • Page 50
    ...Consolidated Financial Statements Jarden Corporation Annual Report 2012 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. The...

  • Page 51
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 9. Debt Debt is comprised of the following at December 31, 2012 and 2011: (In millions) Senior Secured Credit Facility Term Loans 8% Senior Notes due 2016 (a) 6 1/8% Senior Notes due 2022 (a) 7 1/2% Senior Subordinated ...

  • Page 52
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) Upon closing, the Company used approximately $100 of the net proceeds to repurchase the Company's common stock in privately negotiated ...

  • Page 53
    ... Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) exceeding certain agreed upon capital expenditures, creating or suffering liens, completing certain mergers, consolidations and sales of assets, acquisitions...

  • Page 54
    ... Financial Statements Jarden Corporation Annual Report 2012 Cash Flow Hedges At December 31, 2012, the Company had $900 notional amount outstanding in swap agreements, which included $500 notional amount of forward-starting swaps that will become effective commencing December 31, 2013, that exchange...

  • Page 55
    ...Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) The following table presents gain and loss activity (on a pretax basis) for 2012, 2011 and 2010 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, 2012 and thereafter are as follows: Years Ending December 31, 2013 2014 2015 2016 2017 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 2012 (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 2012 (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 2012 (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
    ... Financial Statements Jarden Corporation Annual Report 2012 (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...

  • Page 62
    ... Financial Statements Jarden Corporation Annual Report 2012 Stockholders' Equity In January 2012, the Company commenced a "modified Dutch auction" self-tender offer (the "Offer") to purchase up to $500 in value of its common stock. In March 2012, pursuant to the terms of the Offer, the Company...

  • Page 63
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 15. Employee Benefit Plans The Company maintains defined benefit pension plans for certain of its employees and provides certain postretirement medical and life insurance benefits for a portion of its employees. At ...

  • Page 64
    ... Financial Statements Jarden Corporation Annual Report 2012 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, 2012 and 2011: Pension Benefits 2012 2011 Total...

  • Page 65
    ... benefit obligation Fair value of plan assets 2012 $ 400.0 272.8 2011 $ 379.3 250.7 The Company employs a total return investment approach for its pension plans whereby a mix of equities and fixed income investments are used to maximize the long-term return of pension plan assets. The...

  • Page 66
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) The composition of domestic pension plan assets at December 31, 2012 and 2011 is as follows: Fair Value Measurements of Plan Assets - Domestic...

  • Page 67
    ... Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) The activity for Level 3 pension plan assets for 2012 and 2011 is as follows: Level 3 Pension Plan Assets (In millions) Balance, December 31, 2010 Actual return...

  • Page 68
    ..., the Company also initiated a plan to rationalize the overall cost structure of the Branded Consumables segment through headcount reductions. Reorganization costs for 2011 relate to these plans. For 2011, other costs are primarily comprised of moving costs. 66 Jarden Corporation Annual Report 2012

  • Page 69
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) Accrued reorganization costs activity for 2012 and 2011 are as follows: Accrual Balance at December 31, 2011 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
    ... Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) Segment information as of and for the years ended December 31, 2012, 2011 and 2010 is as follows: 2012 Outdoor Solutions Consumer Branded Solutions Consumables...

  • Page 72
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 (Dollars in millions, except per share data and unless otherwise indicated) 2010 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 2012 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
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2012 Condensed Consolidating Balance Sheets As of December 31, 2012 (Dollars in millions, except per share data and unless otherwise indicated) (In millions) Assets Current assets Investment in subsidiaries Non-current ...

  • Page 75
    ... to property, plant and equipment Acquisition of business, net of cash acquired Intercompany investing activities, net Other Net cash used in investing activities Effect of exchange rate changes on cash Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and...

  • Page 76
    ... property, plant and equipment Acquisition of business, net of cash acquired Intercompany investing activities, net Other Net cash used in investing activities Effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year...

  • Page 77
    This page is intentionally left blank. Jarden Corporation Annual Report 2012 75

  • Page 78
    ... 31, 2012 GROSS MARGIN (%) Gross margin as reported Fair market value adjustment to inventory Rationalization of international manufacturing facilities Adjusted gross margin 28.7% 0.1% 0.2% 29.0% 27.8% 0.1% 0.4% 28.3% 0.9% - (0.2)% 0.7% 2011 Inc/(Dec) 76 Jarden Corporation Annual Report 2012

  • Page 79
    ... Jarden's common stock 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 Process Solutions...

  • Page 80