Sunbeam 2014 Annual Report Download

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Annual Report 2014

Table of contents

  • Page 1
    Annual Report 2014

  • Page 2
    ... Exceptional Financial Results 7. Have Fun, Work Hard and Execute 8. Enhance the Communities in which we Operate Conn Each year Jarden employees submit creative ideas for the cover of our annual report. This year's annual report cover contest was won by the Marker Völkl International Marketing...

  • Page 3
    ... Summary Performan6e Jarden Produ6ts: Conne6ted to Life Conne6ted to Customers & Communities Continuous Innovation Histori6al Performan6e Charts Sele6ted Finan6ial Data Management's Dis6ussion and Analysis Finan6ial Statements 2 5 6 10 11 12 13 15 35 Jarden Corporation Annual Report 2014 1

  • Page 4
    ...new products delivered many new records including: revenue, with strong appeal to consumers worldwide. gross margin, segment earnings, operating We termed and later trademarked our portfolio earnings, and adjusted diluted earnings per 'The Brands of Everyday Lifeâ„¢' recognizing share. Since the day...

  • Page 5
    ... Edison Awards this year, including one for our new home canning appliance, the Ball FreshTECH Automatic Home Canning System, winning in the Consumer Goods category. The Winter Olympics showcased many Jarden products with 145 competitors choosing to use Jarden winter sports equipment in competition...

  • Page 6
    • Generating Annual Adjusted Earnings Growth of at Least 10% on Average • Producing at Least $4.0 Billion of Cash Flow from Operations over Five Years (2014-2018) • Targeting Year-End Bank Leverage Ratio at or Below 3.0x global insights are part of Jarden's competitive advantage and what ...

  • Page 7
    ... Compound Return of over 33%. 1. Performance reflects total stock appreciation from Jarden's inception, defined as market close 9/21/2001 as Martin E. Franklin and Ian G.H. Ashken were officially appointed as senior management on 9/24/2001 through 12/31/2014. Jarden Corporation Annual Report 2014 5

  • Page 8
    ...of baby care for the last 50 years. From its German origins, the NUK brand has become a global baby care leader. Orthodontically designed feeding and soothing products serve as NUK's heritage. Functional and fashionable innovation helps mothers nurture their babies in all parts of the world. Saving...

  • Page 9
    ... our customers such as those who want to create healthy meals and snacks for themselves. # 1 in Blenders # 1 in Slow Cookers # 1 in Vacuum Packaging # 1 in Fresh Preserving # 1 in Coffee Makers Note: Positions noted above refer to the U.S. Market. Jarden Corporation Annual Report 2014 7

  • Page 10
    ... the manufacturing, innovation and marketing of outdoor products, enhancing people's experience and enjoyment of the outdoors by providing the best equipment to have fun and make memories. # 1 in Fishing # 1 in Skis & Bindings # # 1 in Camp Stoves 1 in Lanterns # 1 in Playing Cards # 1 in...

  • Page 11
    ... Plastic Cutlery # 1 in Warming Blankets # 1 in Air Purifiers & Humidifiers # # 1 in Firelogs 1 in Gloves & Sponges* Note: Positions noted above refer to the U.S. Market, unless indicated otherwise. * Home-use gloves and sponges in E.U. G5 market. Jarden Corporation Annual Report 2014 9

  • Page 12
    ... have market-leading brands in product categories, but also hold category management positions with many of our top retailers. & Communities 2014 Net Sales by Customer: $8.3 billion Customers Other 69% Mass A 13% Mass B 4% Club A 3% Int'l Mass B 1% Int'l Mass A 1% Mass D 1% Club B 1% Sporting...

  • Page 13
    ... Ball Jar Social Awareness Search innovative uses and engage with us and other Ball Jar fans on social media. Connected Home WeMo Crock-Pot® Program and adjust your CrockPot from your smart phone for convenient meals prepared on your time schedule. Jarden Corporation Annual Report 2014 11

  • Page 14
    ... and non-cash charges and credits. 2. For full year 2014, cash flow from operations of $627 million is inclusive of a $42 million cash charge primarily representing the cost of interest acceleration related to the early repayment of Jarden's 2020 bonds. 12 Jarden Corporation Annual Report 2014

  • Page 15
    ... Data Jarden Corporation Annual Report 2014 The following tables set forth the Company's selected financial data as of and for the years ended December 31, 2014, 2013, 2012, 2011 and 2010. The selected financial data set forth below has been derived from the audited consolidated financial statements...

  • Page 16
    ... acquisitions; and a $19.7 million non-cash charge related to the impairment of goodwill and intangibles. (b) The results of Rexair Holdings, Inc., Yankee Candle Investments LLC, Mapa Spontex Baby Care and Home Care businesses, Aero Products International, Inc. and Quickie Manufacturing Corporation...

  • Page 17
    ...as blenders, coffeemakers, irons, mixers, slow cookers, tea kettles, toasters, toaster ovens and vacuum packaging machines; home environmental products, such as air purifiers, fans, heaters, humidifiers and vacuum cleaning systems; clippers, trimmers and other hair care products for professional use...

  • Page 18
    ..., electrical component and plumbing markets. The Company's objective is to increase profitability, cash flow and revenue while enhancing our position as a leading manufacturer, marketer and distributor of branded consumer products "used in and around the home" and "home away from home." The Company...

  • Page 19
    ... cash flow, availability under its existing credit facilities and new capital market offerings. 2014 Activity On August 29, 2014, the Company completed the acquisition of Rexair Holdings, Inc. ("Rexair"), a global provider of premium vacuum cleaning systems sold primarily under the Rainbow® brand...

  • Page 20
    ....6 147.7 2012 $ 6,696.1 4,771.7 1,924.4 1,320.5 27.1 - 576.8 185.3 - 391.5 147.6 $ 242.5 $ 203.9 $ 243.9 Results of Operations - Comparing 2014 to 2013 Net Sales (In millions) Branded Consumables Consumer Solutions Outdoor Solutions Process Solutions Corporate Intercompany...

  • Page 21
    Management's Discussion and Analysis Jarden Corporation Annual Report 2014 Net Sales Net sales for 2014 increased $931 million, or 12.7%, to $8.3 billion versus the prior year. Excluding the impact of the YCC Acquisition and the Rexair Acquisition (approximately 8%), net sales on a currency-neutral ...

  • Page 22
    ... 1.5%, versus the prior year, mostly due to the increase in the charges recorded related to the impairment of intangible assets. Impairment Charges In the fourth quarter of 2014, the Company's annual impairment test, in connection with certain fourth quarter triggering events, resulted in non-cash...

  • Page 23
    Management's Discussion and Analysis Jarden Corporation Annual Report 2014 Results of Operations - Comparing 2013 to 2012 (In millions) Branded Consumables Consumer Solutions Outdoor Solutions Process Solutions Corporate Intercompany eliminations 2013 $ 2,266.6 2,040.0 2,724.4 ...

  • Page 24
    Management's Discussion and Analysis Jarden Corporation Annual Report 2014 Selling, General and Administrative Costs SG&A for 2013 increased $199 million, or 15.1%, to $1.5 billion versus the prior year. The change is primarily due to the impact of acquisitions (approximately $128 million), an ...

  • Page 25
    ...$428 million, respectively. Cash used for the acquisition of businesses, net of cash acquired for 2013 increased $1.5 billion versus the prior year. For 2013, capital expenditures were $211 million versus $155 million in 2012. CAPITAL RESOURCES In July 2014, the Company completed the sale of â,¬300...

  • Page 26
    Management's Discussion and Analysis Jarden Corporation Annual Report 2014 The Company maintains a $500 million receivables purchase agreement (the "Securitization Facility") that matures in October 2016. At December 31, 2014, the borrowing rate margin and the unused line fee on the Securitization ...

  • Page 27
    ... the after-tax fair value gains or losses on these swaps is included as a component of accumulated other comprehensive income ("AOCI"). Foreign Currency Contracts The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to...

  • Page 28
    Management's Discussion and Analysis Jarden Corporation Annual Report 2014 The following table presents the fair value of derivative financial instruments as of December 31, 2014: December 31, 2014 (In millions) Derivatives designated as effective hedges: Cash flow hedges: Interest rate swaps ...

  • Page 29
    ... flow and market multiple methods. The income approach used is the discounted cash flow methodology and is based on five-year cash flow projections. The cash flows projected are analyzed on a "debt-free" basis (before cash payments to equity and interest bearing debt investors) in order to develop...

  • Page 30
    ... consolidated financial statements). The Company did not record any impairment charges in 2013 or 2012 in connection with its annual impairment testing. While some of the Company's businesses experienced a revenue decline and decreased profitability in 2014, the Company believes that its long-term...

  • Page 31
    ...'s Discussion and Analysis Jarden Corporation Annual Report 2014 Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. The expected long-term rate of return for plan assets...

  • Page 32
    ... per share, expected or estimated revenue, meeting financial goals, the outlook for the Company's markets and the demand for its products, estimated sales, segment earnings, net interest expense, income tax provision, restructuring and other charges, cash flows from operations, consistent profitable...

  • Page 33
    Management's Discussion and Analysis Jarden Corporation Annual Report 2014 The Company is exposed to the price risk that the rising cost of commodities has on certain of its raw materials. As such, the Company monitors the commodities markets and from time to time the Company enters into commodity-...

  • Page 34
    ... Annual Report 2014 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 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...

  • Page 35
    ...-Oxley Act of 2002, management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2014. In making this assessment, management used the criteria set forth in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring...

  • Page 36
    ..., on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting...

  • Page 37
    Financial Statements and Supplementary Data Jarden Corporation Annual Report 2014 Consolidated Statements of Operations Years Ended December 31, (In millions, except per share amounts) Net sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring costs, net ...

  • Page 38
    ... Long-term debt Deferred taxes on income Other non-current liabilities Total liabilities Commitments and contingencies (see Note 11) Stockholders' equity: Preferred stock ($0.01 par value, 5.0 shares authorized, no shares issued and outstanding at December 31, 2014 and 2013) Common stock...

  • Page 39
    ... Excess tax benefits from stock-based compensation Other, net Net cash provided by financing activities Cash flows 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 40
    ... Statements of Changes in Stockholders' Equity Jarden Corporation Annual Report 2014 Common Stock Treasury Stock Shares Amount (In millions) Balance, December 31, 2011 Comprehensive income Restricted stock awards, stock options exercised and stock plan purchases Restricted stock awards...

  • Page 41
    ... accounting principles in the United States of America ("GAAP"). All significant intercompany transactions and balances have been eliminated upon consolidation. Unless otherwise indicated, references in the consolidated financial statements to 2014, 2013 and 2012 are to the Company's calendar years...

  • Page 42
    ...'s trade receivables are due from retailers and distributors located throughout Asia, Canada, Europe, Latin America and the United States. Approximately 15%, 17% and 20% of the Company's consolidated net sales in 2014, 2013 and 2012, respectively, were to a single customer who purchased product from...

  • Page 43
    ... return rates and its reasonable judgment. The Company sells gift cards to customers in its retail stores, third-party retail stores and through consumer direct operations. Gift cards do not have an expiration date. At the point of sale of a gift card, the Company records deferred revenue. Gift card...

  • Page 44
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2014 Cost of Sales The Company's cost of sales includes the costs of raw materials and finished goods purchases, manufacturing costs and warehouse and distribution costs. (Dollars in millions, except per share data and unless...

  • Page 45
    ... Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) Financial instruments that potentially subject the Company to credit risk consist primarily of trade receivables and interest-bearing investments. Trade...

  • Page 46
    ... stock awards that contain performance or market vesting conditions, the Company excludes these awards from diluted earnings per share computations until the end of the reporting period that the contingency is met. Pension and Postretirement Benefit Plans The Company records annual amounts...

  • Page 47
    ... financial position, results of operations or cash flows of the Company. 3. Acquisitions 2014 Activity On August 29, 2014, the Company completed the acquisition of Rexair Holdings, Inc. ("Rexair"), a global provider of premium vacuum cleaning systems sold primarily under the Rainbow® brand name...

  • Page 48
    ... Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) reported had the YCC Acquisition been completed as of January 1, 2012 and should not be taken as indicative of the Company's future consolidated results...

  • Page 49
    ...) Intangibles Patents Manufacturing process and expertise Brand names Customer relationships and distributor channels Trademarks and tradenames Additions Impairment Charge Accumulated Amortization and Foreign Exchange Net Book Value at December 31, 2014 Amortization Periods (years...

  • Page 50
    ... Consolidated Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) In the fourth quarter of 2014, the Company's annual impairment test, in connection with certain fourth quarter triggering events, resulted in non-cash...

  • Page 51
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 8. Warranty Reserve Warranty reserve activity for 2014 and 2013 is as follows: (In millions) Warranty reserve at January 1, Provision for warranties issued Warranty claims paid Acquisitions and other adjustments ...

  • Page 52
    ...2034 Convertible Notes for each trading day during such ten trading-day period was less than 98% of the closing sale price of the Company's common stock for each trading day during such ten trading-day period multiplied by the then current conversion rate; or 50 Jarden Corporation Annual Report 2014

  • Page 53
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) • if the Company calls any 2034 Convertible Notes for redemption; or • on or after December 15, 2033, and on or prior to the close of business...

  • Page 54
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) The Facility contains certain restrictions, subject to certain exceptions and qualifications, on the conduct of the Company and certain of its...

  • Page 55
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) 10. Derivative Financial Instruments From time to time, the Company enters into derivative transactions to hedge its exposures to interest ...

  • Page 56
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2014 (In millions) Derivatives designated as effective hedges: Cash flow hedges: Interest rate swaps Foreign currency contracts Fair value hedges: Interest rate swaps Subtotal Derivatives not designated as effective hedges...

  • Page 57
    ... Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) The following table presents gain and loss activity (on a pretax basis) for 2014, 2013 and 2012 related to derivative financial instruments not designated as effective...

  • Page 58
    ... 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 59
    ... adverse effect on the consolidated financial position, results of operations or cash flows of the Company. 12. Taxes on Income The components of the provision for income taxes attributable to continuing operations for 2014, 2013 and 2012 are as follows: (In millions) Current income tax expense...

  • Page 60
    ...Consolidated Financial Statements Jarden Corporation Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) Deferred tax assets (liabilities) at December 31, 2014 and 2013 are comprised of the following: (In millions) Intangibles Goodwill Financial reporting...

  • Page 61
    ... of undistributed earnings attributable to the Company's operations in Venezuela. The following table sets forth the details and the activity related to unrecognized tax benefit as of and for the years ended December 31, 2014 and 2013: (In millions) Unrecognized tax benefits, January 1, Increases...

  • Page 62
    ... Company does not use cash to settle any of its options or restricted stock awards and when available issues shares from its treasury stock instead of issuing new shares. Common stock options vest ratably over an explicit service period of typically 3 to 4 years and generally have a contractual term...

  • Page 63
    ... stock awards granted in 2014, in January 2014, the Board authorized an annual grant of approximately 0.8 million restricted stock awards to certain executive officers. These awards had an aggregate grant date fair value of $28.8 and vested during 2014 when the Company's weighted average share price...

  • Page 64
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 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 65
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 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, 2014 and 2013: (In millions) Change...

  • Page 66
    ... expected future market conditions, risk and active management premiums. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns on the Company's defined benefit pension plan's investments. The Company's target asset allocation for 2014 and 2013 is as...

  • Page 67
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 (In millions) Asset Category Equity securities and funds: Domestic International Fixed income securities and funds Alternative investments Cash and other Total (In millions) Asset Category Equity securities ...

  • Page 68
    ... Annual Report 2014 (Dollars in millions, except per share data and unless otherwise indicated) The activity for Level 3 pension plan assets for 2014 and 2013 is as follows: (In millions) Balance, December 31, 2012 Actual return on plan assets: Relating to assets held at year-end Purchases, sales...

  • Page 69
    ... Financial Statements Jarden Corporation Annual Report 2014 16. Restructuring Costs Restructuring costs for 2014, 2013 and 2012 are as follows: (In millions) Branded Consumables Consumer Solutions Outdoor Solutions Total (In millions) Branded Consumables Consumer Solutions Outdoor Solutions...

  • Page 70
    ...as blenders, coffeemakers, irons, mixers, slow cookers, tea kettles, toasters, toaster ovens and vacuum packaging machines; home environmental products, such as air purifiers, fans, heaters, humidifiers and vacuum cleaning systems; clippers, trimmers and other hair care products for professional use...

  • Page 71
    ... technical and outdoor apparel and equipment under brand names such as CAPP3L®, Ex Officio®, K2®, Marker®, Marmot®, Planet Earth®, Ride®, Völkl® and Zoot®, and premium air beds under the AeroBed® brand. The Outdoor Solutions Segment also sells a variety of products sold internationally...

  • Page 72
    ...Consolidated Financial Statements Jarden Corporation Annual Report 2014 Branded Consumer Solutions Outdoor Solutions (Dollars in millions, except per share data and unless otherwise indicated) 2013 Total Process Intercompany Operating Solutions Eliminations Segments Corporate/ Unallocated...

  • Page 73
    ... Financial Statements Jarden Corporation Annual Report 2014 Geographic Information Geographic information as of and for the years ended December 31, 2014, 2013 and 2012 is as follows: (In millions) 2014 Net sales Property, plant and equipment, net 2013 Net sales Property, plant and equipment...

  • Page 74
    ... consolidating financial data of the Company ("Parent"), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis, using the equity method of accounting for subsidiaries, as of and for the years ended December 31, 2014, 2013 and 2012. Condensed Consolidating Results of...

  • Page 75
    ... Financial Statements Jarden Corporation Annual Report 2014 (In millions) Net sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring cost, net Operating earnings Interest expense, net Income (loss) before taxes and equity earnings of subsidiaries Income tax...

  • Page 76
    Notes to Consolidated Financial Statements Jarden Corporation Annual Report 2014 Condensed Consolidating Balance Sheets (In millions) Assets: Cash and cash equivalents Accounts receivable Inventories Other current assets Total current assets Property, plant and equipment, net Goodwill Intangibles...

  • Page 77
    ... to Consolidated Financial Statements Jarden Corporation Annual Report 2014 (In millions) Assets: Cash and cash equivalents Accounts receivable Inventories Other current assets Total current assets Property, plant and equipment, net Goodwill Intangibles, net Intercompany receivables Investment in...

  • Page 78
    ... on long-term debt Issuance (repurchase) of common stock, net Excess tax benefits from stock-based compensation 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...

  • Page 79
    ... from issuance of long-term debt Payments on long-term debt Issuance (repurchase) of common stock, net Excess tax benefits from stock-based compensation Other Net cash provided by (used in) financing activities Investing activities: Additions to property, plant and equipment Acquisition of business...

  • Page 80
    ... on long-term debt Issuance (repurchase) of common stock, net Excess tax benefits from stock-based compensation 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...

  • Page 81
    ... to Non-GAAP Measures Jarden Corporation Annual Report 2014 We use certain non-GAAP financial measures in this Annual Report because they are a basis upon which the Company's management has assessed its financial performance in the years presented. Additionally, the Company uses non-GAAP financial...

  • Page 82
    Reconciliation of GAAP to Non-GAAP Measures Jarden Corporation Annual Report 2014 Organic Net Sales Growth (Dollars In millions) Net Sales Growth Foreign Exchange Impacts (Acquisitions)/exited businesses and other, net Organic Net Sales Growth Year ended December 31, 2014 $ 931.2 100.8 (602.2) $ 429...

  • Page 83
    ... common stock is listed on the New York Stock Exchange. Symbol: JAH Investor Relations Rachel C. Wilson Vice President - Investor and Financial Relations Norwalk, CT 203-849-4664 ICR, Inc. Norwalk, CT 203-682-8200 Administrative Offices Jarden Corporation 1800 North Military Trail Boca Raton, FL...

  • Page 84