RYE, N.Y., Oct. 30 /PRNewswire-FirstCall/ -- Jarden Corporation
(NYSE: JAH) today reported its financial results for the three and nine months
ended September 30, 2008.
For the three months ended September 30, 2008, net sales increased 10% to
$1.5 billion compared to $1.3 billion for the same period in the previous
year. For the three months ended September 30, 2008, net income was $63.8
million, or $0.83 per diluted share, compared to net income of $21.2 million,
or $0.28 per diluted share, in the three months ended September 30, 2007. On a
non-GAAP basis, adjusted net income was $74.9 million, or $0.98 per diluted
share, for the three months ended September 30, 2008, compared to $60.1
million, or $0.80 per diluted share, for the three months ended September 30,
2007.
For the nine months ended September 30, 2008, net sales increased 26% to
$4.0 billion compared to $3.2 billion for the same period in the previous
year. For the nine months ended September 30, 2008, net income was $111.5
million, or $1.46 per diluted share, compared to net income of $39.3 million,
or $0.54 per diluted share, in the nine months ended September 30, 2007. On a
non-GAAP basis, adjusted net income was $146.2 million, or $1.91 per diluted
share, for the nine months ended September 30, 2008, compared to $121.7
million, or $1.68 per diluted share, for the nine months ended September 30,
2007.
The Pure Fishing, Inc. and K2 Inc. businesses have been included in the
results of operations from their dates of acquisition in April 2007 and August
2007, respectively. Please see the schedule accompanying this release for a
reconciliation of GAAP to non-GAAP net income and diluted earnings per share.
"Our diversified business model delivered another record quarter, with
organic sales growth and increased segment earnings in each of our three
primary business segments, resulting in adjusted EPS up more than 22% from the
prior year quarter," said Martin E. Franklin, Chairman and Chief Executive
Officer of Jarden Corporation. "We attribute this success to the strength of
Jarden's leading brand portfolio and the relevance of our products to the
consumer in these tough economic times, coupled with our disciplined,
conservative management approach. We have often said that the more time
consumers spend in and around the home the better it is for many of our
businesses and we experienced this particularly in our Ball(R) fresh
preserving business, First Alert(R) safety systems, Coleman(R) outdoor
equipment and in the FoodSaver(R) appliance category in the third quarter."
Mr. Franklin continued, "Our last acquisition was over a year ago and the
earnings power of the business post any acquisition related adjustments can be
clearly seen in the fact that the GAAP EPS in the third quarter of 2008 was
greater than the as adjusted EPS in 2007. We have maintained our
conservative balance sheet and reduced year-over-year inventories in the
quarter, despite meaningful cost increases during the last 12 months. In these
uncertain times we are particularly pleased that we have maintained our strong
liquidity position as we head into our highest cash flow quarter of the year."
The Company will be holding a conference call at 9:45 a.m. EDT today,
October 30, 2008, to further discuss its results and respond to questions. The
call will be accessible via a webcast through the Company's website at
www.jarden.com and will be archived online until November 13, 2008.
Jarden Corporation is a leading provider of niche consumer products.
Jarden operates in three primary business segments through a number of well
recognized brands, including: Outdoor Solutions: Abu Garcia(R), Berkley(R),
Campingaz(R) and Coleman(R), Fenwick(R), Gulp!(R), JT(R), K2(R), Marker(R),
Marmot(R), Mitchell(R), Penn(R), Rawlings(R), Shakespeare(R), Stearns(R),
Stren(R), Trilene(R) and Volkl(R); Consumer Solutions: Bionaire(R),
Crock-Pot(R), FoodSaver(R), Health o meter(R), Holmes(R), Mr. Coffee(R),
Oster(R), Patton(R), Rival(R), Seal-a-Meal(R), Sunbeam(R), VillaWare(R) and
White Mountain(R); and Branded Consumables: Ball(R), Bee(R), Bicycle(R),
Crawford(R), Diamond(R), Dicon(R), First Alert(R), Forster(R), Hoyle(R),
Kerr(R), Lehigh(R), Leslie-Locke(R), Loew Cornell(R) and Pine Mountain(R).
Headquartered in Rye, N.Y., Jarden has over 25,000 employees worldwide. For
more information, please visit www.jarden.com.
Note: This news release contains "forward-looking statements" within the
meaning of the federal securities laws and is intended to qualify for the Safe
Harbor from liability established by the Private Securities Litigation Reform
Act of 1995, including statements regarding the Company's adjusted earnings
per share, repurchase of shares of common stock from time to time under the
Company's stock repurchase program, the outlook for Jarden's markets and the
demand for its products, estimated sales, segment earnings, earnings per
share, cash flows from operations, future revenues and margin requirement and
expansion, organic growth, the success of new product introductions, growth
in costs and expenses and the impact of acquisitions, divestitures,
restructurings, and other unusual items, including Jarden's ability to
integrate and obtain the anticipated results and synergies from its
acquisitions. These projections and statements are based on management's
estimates and assumptions with respect to future events and financial
performance and are believed to be reasonable, though are inherently uncertain
and difficult to predict. Actual results could differ materially from those
projected as a result of certain factors. A discussion of factors that could
cause results to vary is included in the Company's periodic and other reports
filed with the Securities and Exchange Commission.
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except earnings per share)
Three months ended
September 30, 2008 September 30, 2007
Adjusted Adjusted
As Adjust (non- As Adjust (non-
Reported -ments GAAP) Reported -ments GAAP)
(GAAP) (1)(2) (1)(2) (GAAP) (1)(2)(3) (1)(2)(3)
Net sales $1,455.6 $-- $1,455.6 $1,322.2 $-- $1,322.2
Cost of sales 1,039.8 -- 1,039.8 994.4 (45.3) 949.1
Gross profit 415.8 -- 415.8 327.8 373.1 373.1
Selling, general
and administrative
expenses 258.9 (4.0) 254.9 239.2 (3.0) 236.2
Reorganization
and
acquisition-
related
integration
costs, net 12.8 (12.8) -- 11.0 (11.0) --
Operating
earnings 144.1 16.8 160.9 77.6 59.3 136.9
Interest
expense, net 44.0 -- 44.0 43.0 -- 43.0
Loss on early
extinguishment
of debt -- -- -- -- -- --
Income before
taxes 100.1 16.8 116.9 34.6 59.3 93.9
Income tax
provision 36.3 5.7 42.0 13.4 20.4 33.8
Net income $63.8 $11.1 $74.9 $21.2 $38.9 $60.1
Earnings per
share:
Basic $0.85 $0.99 $0.29 $0.82
Diluted $0.83 $0.98 $0.28 $0.80
Weighted average
shares
outstanding:
Basic 75.4 75.4 73.3 73.3
Diluted 76.5 76.5 74.9 74.9
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except earnings per share)
Nine months ended
September 30, 2008 September 30, 2007
Adjusted Adjusted
As Adjust (non- As Adjust (non-
Reported -ments GAAP) Reported -ments GAAP)
(GAAP) (1)(2) (1)(2) (GAAP) (1)(2)(3) (1)(2)(3)
Net sales $4,033.0 $-- $4,033.0 $3,193.2 $-- $3,193.2
Cost of sales 2,908.6 -- 2,908.6 2,401.0 (72.4) 2,328.6
Gross profit 1,124.4 -- 1,124.4 792.2 72.4 864.6
Selling,
general and
administrative
expenses 775.2 (12.0) 763.2 581.0 (7.3) 573.7
Reorganization
and acquisition-
related
integration
costs, net 34.6 (34.6) -- 29.5 (29.5) --
Operating
earnings 314.6 46.6 361.2 181.7 109.2 290.9
Interest
expense, net 132.8 -- 132.8 100.7 -- 100.7
Loss on early
extinguishment
of debt -- -- -- 15.7 (15.7) --
Income before
taxes 181.8 46.6 228.4 65.3 124.9 190.2
Income tax
provision 70.3 11.9 82.2 26.0 42.5 68.5
Net income $111.5 $34.7 $146.2 $39.3 $82.4 $121.7
Earnings per
share:
Basic $1.48 $1.94 $0.56 $1.72
Diluted $1.46 $1.91 $0.54 $1.68
Weighted
average
shares
outstanding:
Basic 75.3 75.3 70.6 70.6
Diluted 76.4 76.4 72.5 72.5
See Notes to Earnings Release attached
JARDEN CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)
September 30, 2008 December 31, 2007
Assets
Current assets:
Cash and cash equivalents $214.7 $220.5
Accounts receivable, net 992.2 978.5
Inventories 1,281.5 1,126.2
Deferred taxes on income 132.1 140.5
Prepaid expenses and other
current assets 113.1 84.5
Total current assets 2,733.6 2,550.2
Property, plant and equipment,
net 516.4 510.9
Goodwill 1,675.6 1,610.8
Intangible assets, net 1,051.9 1,126.6
Other assets 78.5 69.6
Total assets $6,056.0 $5,868.1
Liabilities and stockholders' equity
Current liabilities:
Short-term debt and current
portion of long-term debt $356.3 $297.8
Accounts payable 479.2 439.3
Accrued salaries, wages and
employee benefits 138.3 134.6
Taxes on income 21.1 20.9
Other current liabilities 386.0 387.8
Total current liabilities 1,380.9 1,280.4
Long-term debt 2,458.3 2,449.5
Deferred taxes on income 331.6 335.2
Other non-current liabilities 231.5 264.4
Total liabilities 4,402.3 4,329.5
Total stockholders' equity 1,653.7 1,538.6
Total liabilities and
stockholders' equity $6,056.0 $5,868.1
See Notes to Earnings Release attached
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Three months Nine months
ended ended
September September September September
30, 2008 30, 2007 30, 2008 30, 2007
Cash flows from operating
activities:
Net income $63.8 $21.2 $111.5 $39.3
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 30.8 26.0 89.7 64.9
Other non-cash items 35.4 (6.0) 61.1 4.7
Changes in assets and
liabilities, net of
effects
from acquisitions:
Accounts receivable (128.8) (122.1) (30.6) (79.5)
Inventory (46.3) 14.5 (169.3) (52.4)
Accounts payable 16.6 30.5 38.1 50.2
Other current assets and
liabilities 16.4 41.3 (45.8) (3.9)
Net cash (used in)
provided by operating
activities (12.1) 5.4 54.7 23.3
Cash flows from financing
activities:
Net change in short-term
debt 18.1 244.3 66.8 303.0
Proceeds from issuance of
senior debt -- 700.0 25.0 1,350.0
Payments on long-term debt (4.5) (335.5) (20.7) (729.2)
Proceeds from issuance of
stock, net of transaction
fees -- 0.3 1.9 10.5
Repurchase of common stock
and shares tendered for
taxes -- -- (10.9) (24.9)
Debt issuance costs (0.4) (4.5) (2.6) (36.4)
Other, net -- 1.9 (2.5) 0.8
Net cash provided by
financing activities 13.2 606.5 57.0 873.8
Cash flows from investing
activities:
Additions to property,
plant and equipment (24.7) (18.1) (70.0) (55.4)
Acquisition of businesses,
net of cash acquired (11.7) (574.1) (40.8) (906.0)
Other -- 51.7 (7.4) 20.5
Net cash used in investing
activities (36.4) (540.5) (118.2) (940.9)
Effect of exchange rate
changes on cash and cash
equivalents (5.0) 3.4 0.7 3.7
Net increase (decrease) in
cash and cash equivalents (40.3) 74.8 (5.8) (40.1)
Cash and cash equivalents
at beginning of period 255.0 87.7 220.5 202.6
Cash and cash equivalents
at end of period $214.7 $162.5 $214.7 $162.5
See Notes to Earnings Release attached
JARDEN CORPORATION
NET SALES AND OPERATING EARNINGS BY SEGMENT (Unaudited)
(in millions)
Outdoor Solutions Consumer Branded Process
(a) Solutions Consumables Solutions
Three months ended
September 30, 2008
Net sales $620.1 $542.7 $223.5 $83.7
Segment earnings (loss) $83.6 $82.8 $36.5 $8.9
Adjustments to
reconcile to reported
operating earnings (loss):
Reorganization and
acquisition-related
integration costs,
net (6.8) -- (2.5) (0.7)
Depreciation and
amortization (15.9) (6.8) (4.7) (3.2)
Operating earnings
(loss) $60.9 $76.0 $29.3 $5.0
Outdoor Solutions Consumer Branded Process
(a) Solutions Consumables Solutions
Three months ended
September 30, 2007
Net sales $498.4 $540.1 $213.5 $86.7
Segment earnings (loss) $72.6 $79.3 $34.0 $8.0
Adjustments to
reconcile to reported
operating earnings(loss):
Reorganization and
acquisition-related
integration costs,
net (0.7) (7.3) (1.7) --
Manufacturer's profit
in inventory (43.8) -- -- (1.5)
Depreciation and
amortization (11.9) (6.6) (4.3) (2.8)
Operating earnings
(loss) $16.2 $65.4 $28.0 $3.7
JARDEN CORPORATION
NET SALES AND OPERATING EARNINGS BY SEGMENT (Unaudited)
(in millions)
Total
Intercompany Operating Corporate/
Elimination(b) Segments Unallocated Consolidated
Three months ended
September 30, 2008
Net sales $(14.4) $1,455.6 $-- $1,455.6
Segment earnings
(loss) $-- $211.8 $(24.1) $187.7
Adjustments to
reconcile to reported
operating earnings
(loss):
Reorganization and
acquisition-related
integration costs,
net -- (10.0) (2.8) (12.8)
Depreciation and
amortization -- (30.6) (0.2) (30.8)
Operating earnings
(loss) $-- $171.2 $(27.1) $144.1
Total
Intercompany Operating Corporate/
Elimination(b) Segments Unallocated Consolidated
Three months ended
September 30, 2007
Net sales $(16.5) $1,322.2 $-- $1,322.2
Segment earnings
(loss) $-- $193.9 $(34.0) $159.9
Adjustments to
reconcile to reported
operating earnings(loss):
Reorganization and
acquisition-related
integration costs,
net -- (9.7) (1.3) (11.0)
Manufacturer's profit
in inventory -- (45.3) -- (45.3)
Depreciation and
amortization -- (25.6) (0.4) (26.0)
Operating earnings
(loss) $-- $113.3 $(35.7) $77.6
JARDEN CORPORATION
NET SALES AND OPERATING EARNINGS BY SEGMENT (Unaudited)
(in millions)
Outdoor Solutions Consumer Branded Process
(a) Solutions Consumables Solutions
Nine months ended
September 30, 2008
Net sales $1,987.0 $1,242.3 $589.3 $264.5
Segment earnings
(loss) $240.3 $161.0 $76.7 $29.4
Adjustments to
reconcile to reported
operating earnings(loss):
Reorganization and
acquisition-related
integration costs,
net (20.8) -- (6.0) (2.8)
Depreciation and
amortization (46.8) (19.7) (13.1) (9.3)
Operating earnings
(loss) $172.7 $141.3 $57.6 $17.3
Outdoor Solutions Consumer Branded Process
(a) Solutions Consumables Solutions
Nine months ended
September 30, 2007
Net sales $1,128.4 $1,264.5 $588.8 $260.7
Segment earnings
(loss) $163.5 $155.6 $80.3 $24.5
Adjustments to
reconcile to reported
operating earnings(loss):
Reorganization and
acquisition-related
integration costs,
net (3.7) (18.5) (5.7) --
Manufacturer's profit
in inventory (70.9) -- -- (1.5)
Depreciation and
amortization (23.6) (20.3) (12.6) (7.2)
Operating earnings
(loss) $65.3 $116.8 $62.0 $15.8
Total
Intercompany Operating Corporate/
Elimination(b) Segments Unallocated Consolidated
Nine months ended
September 30, 2008
Net sales $(50.1) 4,033.0 $-- $4,033.0
Segment earnings
(loss) $-- 507.4 $(68.5) $438.9
Adjustments to
reconcile to reported
operating earnings(loss):
Reorganization and
acquisition-related
integration costs,
net -- (29.6) (5.0) (34.6)
Depreciation and
amortization -- (88.9) (0.8) (89.7)
Operating earnings
(loss) $-- 388.9 $(74.3) $314.6
Total
Intercompany Operating Corporate/
Elimination(b) Segments Unallocated Consolidated
Nine months ended
September 30, 2007
Net sales $(49.2) 3,193.2 $-- $3,193.2
Segment earnings
(loss) $-- 423.9 $(75.4) $348.5
Adjustments to
reconcile to reported
operating earnings(loss):
Reorganization and
acquisition-related
integration costs,
net -- (27.9) (1.6) (29.5)
Manufacturer's profit
in inventory -- (72.4) -- (72.4)
Depreciation and
amortization -- (63.7) (1.2) (64.9)
Operating earnings
(loss) $-- 259.9 $(78.2) $181.7
(a) Effective April and August 2007, the Company acquired Pure Fishing,
Inc. and K2 Inc., respectively, which, other than K2 Inc.'s monofilament
business, are reflected in the Outdoor Solutions segment from their respective
dates of acquisition. On a pro forma basis, including these acquisitions, net
sales in the Outdoor Solutions segment for the three and nine months ended
September 30, 2007 would have been $613.1 million and $1,956.2 million,
respectively.
(b) Intersegment sales are recorded at cost plus an agreed-upon
intercompany profit on intersegment sales.
Jarden Corporation
Notes to Earnings Release
Note 1: Adjustments relate to items that are excluded from the "as
reported" results to arrive at the "Adjusted" results for the three and nine
months ended September 30, 2008 and 2007. For the three months ended September
30, 2008 adjustments to net income consist of $12.8 million of reorganization
and acquisition-related integration costs and $4.0 million of amortization of
acquired intangible assets. Also, included in the adjustments to net income
for the three months ended September 30, 2008 is the tax provision adjustment
of $5.7 million which reflects the normalization of the adjusted results to
the Company's estimated 36% effective tax rate.
For the three months ended September 30, 2007 adjustments to net income
consist of $45.3 million of manufacturer's profit in inventory charged to cost
of sales which is the purchase accounting fair value adjustment to inventory
associated with the K2 Inc. acquisition; $11.0 million of reorganization and
acquisition-related integration costs; and $3.0 million of amortization of
acquired intangible assets. Also, included in the adjustments to net income
for the three months ended September 30, 2007 is the tax provision adjustment
of $20.4 million which reflects the normalization of the adjusted results to
the Company's estimated 36% effective tax rate.
For the nine months ended September 30, 2008 adjustments to net income
consist of $34.6 million of reorganization and acquisition-related integration
costs and $12.0 million of amortization of acquired intangible assets. Also,
included in the adjustments to net income for the nine months ended September
30, 2008 is the tax provision adjustment of $11.9 million which reflects the
normalization of the adjusted results to the Company's estimated 36% effective
tax rate.
For the nine months ended September 30, 2007 adjustments to net income
consist of $72.4 million of manufacturer's profit in inventory charged to cost
of sales which is the purchase accounting fair value adjustment to inventory
associated with the Pure Fishing, Inc. ($27.1 million) and K2 Inc. ($45.3
million) acquisitions; $29.5 million of reorganization and acquisition-related
integration costs; $7.3 million of amortization of acquired intangible assets;
and $15.7 million for the loss on the early extinguishment of debt. Also,
included in the adjustments to net income for the nine months ended September
30, 2007 is the tax provision adjustment of $42.5 million which reflects the
normalization of the adjusted results to the Company's estimated 36% effective
tax rate.
Note 2: This earnings release contains non-GAAP financial measures. For
purposes of Regulation G, a non-GAAP financial measure is a numerical measure
of a company's historical or future financial performance, financial position
or cash flows that excludes amounts, or is subject to adjustments that have
the effect of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP in the
statements of income, balance sheets, or statements of cash flows of the
Company; or includes amounts, or is subject to adjustments that have the
effect of including amounts, that are excluded from the most directly
comparable measure so calculated and presented. Pursuant to the requirements
of Regulation G, the Company has provided reconciliations of the non-GAAP
financial measures to the most directly comparable GAAP financial measures.
These non-GAAP measures are provided because management of the Company uses
these financial measures in maintaining and evaluating the Company's ongoing
financial results and trends. Management uses this non-GAAP information as an
indicator of business performance, and evaluates overall management with
respect to such indicators. Additionally, the Company uses non-GAAP financial
measures because the Company's credit agreement provides for certain
adjustments in calculations used for determining whether the Company is in
compliance with certain credit agreement covenants, including, but not limited
to, adjustments relating to non-cash purchase accounting adjustments, certain
reorganization and acquisition-related integration costs, non-cash stock-based
compensation costs and loss on early extinguishment of debt. These non-GAAP
measures should be considered in addition to, not as a substitute for,
measures of financial performance prepared in accordance with GAAP.
Note 3: In prior years, the Company had adjusted for non-cash stock
compensation costs to derive its adjusted net income. In 2008, the Company no
longer adjusts for these costs and therefore, prior year amounts have been
restated to conform with the current year presentation. The Company recorded
non-cash stock compensation costs of $5.8 million and $16.1 million for the
three months ended September 30, 2008 and 2007, respectively, and $16.5
million and $33.2 million for the nine months ended September 30, 2008 and
2007, respectively.
