Sunbeam 2012 Annual Report Download - page 22

20 Jarden Corporation Annual Report 2012
Management’s Discussion and Analysis
Jarden Corporation Annual Report 2012
Net Sales
Net sales for 2011 increased $657 million, or 10.9%, to $6.7 billion versus the prior year. Acquisitions provided net sales growth
of approximately 6%. Excluding acquisitions, sales increased approximately 5%, primarily due to increased sell-through in certain
product categories, expanded product offerings and favorable foreign currency translation, partially offset by weakness in certain
product categories. On a currency-neutral basis net sales increased approximately 3%.
Net sales in the Outdoor Solutions segment increased $253 million, or 10.1%. Increased sales in the apparel, camping and outdoor,
team sports and winter sports businesses provided an increase of approximately 8% in net sales, largely related to expanded air
bed product offerings, increased point of sale and earthquake-related sales. Favorable foreign currency translation accounted for an
increase of approximately 2% in net sales.
Results of Operations—Comparing 2011 to 2010
Net Sales
Operating Earnings
(Loss)
Years Ended December 31,
(In millions) 2011 2010 2011 2010
Outdoor Solutions $ 2,772.1 $ 2,518.7 $ 276.4 $ 228.6
Consumer Solutions 1,880.3 1,869.6 236.7 233.4
Branded Consumables 1,734.4 1,345.3 105.4 109.0
Process Solutions 351.2 342.7 21.9 25.0
Corporate — — (117.5) (188.7)
Intercompany eliminations (58.1) (53.6) — —
$ 6,679.9 $ 6,022.7 $ 522.9 $ 407.3
Reorganization Costs and Impairment Charges
Reorganization costs for 2012 increased $3.7 million to $27.1 million versus the prior year, primarily related to reorganization plans
initiated in the Outdoor Solutions and Consumer Solutions segments. Reorganization costs of $12.6 million were recorded in the
Outdoor Solutions segment related to a plan to reorganize certain manufacturing facilities in the Far East within the winter sport
business. Reorganization costs of $14.1 million were recorded in the Consumer Solutions segment related to a plan to rationalize the
operating processes of certain international operations.
Interest Expense
Net interest expense for 2012 increased $5.6 million to $185 million versus the prior year, primarily due to higher average debt
levels, partially offset by a decrease in the weighted average interest rate for 2012 to 5.2% from 5.4% in 2011.
Income Taxes
The Company’s reported tax rate for 2012 and 2011 was 37.7% and 38.0%, respectively. The increase from the statutory tax rate to
the reported tax rate for 2012 results principally from U.S. tax expense related to the taxation of foreign income and tax expense
related to foreign tax audit adjustments. The increase from the statutory tax rate to the reported tax rate for 2011 results principally
from the U.S. tax expense ($12.3 million) related to U.S. goodwill impairment.
Net Income
Net income for 2012 increased $39.2 million to $244 million versus the prior year. For 2012 and 2011, earnings per diluted share were
$3.10 and $2.31, respectively. The increase in net income was primarily due to a gross profit increase (approximately $70 million),
primarily due to increased margins and higher sales; and the charges recorded in 2011 for the impairment of goodwill, intangibles
and other assets ($52.5 million) and the loss on early extinguishment of debt ($12.8 million), partially offset by the aforementioned
increase in SG&A. On a period-over-period basis, the diluted weighted average shares outstanding decreased approximately 11%,
primarily due to the Company’s stock repurchase program (see “Capital Resources”).
Note: Changes in net sales on a currency neutral basis that are presented hereafter are provided to enhance visibility of the underlying operations by
excluding the impact of foreign currency translation on period-over-period changes.