Jarden Corporation, parent company to Coleman, reported that net sales for the third quarter increased 10% to $1.0 billion compared to $938 million for the same period in the previous year. Net income was $51.3 million, or 78 cents per diluted share, in the period, compared to $24.0 million, or 40 cents per diluted share, in the third quarter of 2005.
Sales in the Outdoor Solutions division, which includes Coleman, declined 2.7% to $208.4 million for the quarter, while operating profits decreased 10.5% to approximately $12.8 million for the period.
On a non-GAAP basis, net income as adjusted was $58.2 million, or 89 cents per diluted share, for the quarter ended September 30, compared to $50.8 million, or 74 cents per diluted share, in Q3 2005.
For the nine months ended September 30, 2006, net sales increased 26% to $2.8 billion compared to $2.2 billion for the same period in the previous year. Net income was $70.3 million, or $1.07 per diluted share for the nine months ended September 30, 2006, compared to $9.6 million or $0.19 per diluted share for the nine months ended September 30, 2005. On a non-GAAP basis, net income as adjusted was $113.3 million, or $1.72 per diluted share for the nine months ended September 30, 2006, compared to $104.0 million, or $1.59 per diluted share for the nine months ended September 30, 2005. The American Household and Holmes Group businesses have been included in the results of operations from January 2005 and July 2005, respectively.
Martin E. Franklin, chairman and CEO, commented, “We are delighted to have achieved the important milestone of posting our first billion dollar sales quarter coupled with strong earnings and record third quarter operating cash flow of over $91 million. This outstanding performance was based in part on strong retail sales of our jars, fans and coolers at the end of the summer and strong initial sell in of our winter seasonal products, such as electric blankets and heaters. We also achieved the first increase in gross margin reported by Jarden on a year-over-year basis since the fourth quarter 2004 and we currently anticipate that this is the start of a trend towards continued gross margin expansion.”
Mr. Franklin continued “We are cautiously optimistic that the holiday season will produce continuing positive results based on quarter-to-date sell- in and POS data. At this point we are confident that we will exceed the goal we set for ourselves at the beginning of the year of growing as adjusted EPS by 15% over the 2005 level. Given the rising interest rate and commodity cost environment we have experienced for most of the year, as well as concerns regarding consumer spending, we consider this is an excellent result. During 2006, we have invested in the future of our business by spending substantial discretionary amounts focused on new product development, marketing, sales promotion and media. As a result, we have many exciting new products and marketing programs lined up for introduction in 2007 and believe the momentum we have built in 2006 should carry over into 2007.”
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except earnings per share)
Three month periods ended
September 30, 2006 September 30, 2005
As Adjustments As As Adjustments As
Reported (1)(3) Adjusted Reported (1)(3) Adjusted
(GAAP) (non-GAAP) (GAAP) (non-GAAP)
(1)(3) (2) (1)(3)
Net sales $1,033.1 $ -- $1,033.1 $938.0 $ -- $938.0
Cost of
sales 767.9 (3.9) 764.0 699.3 (4.2) 695.1
Gross profit 265.2 3.9 269.1 238.7 4.2 242.9
General and
administrative
expenses 156.0 (8.1) 147.9 169.2 (29.8) 139.4
Reorganization
and
acquisition-
related
Integration
costs, net 7.5 (7.5) -- 7.2 (7.2) --
Operating
earnings 101.7 19.5 121.2 62.3 41.2 103.5
Interest
expense,
net 29.6 -- 29.6 23.5 -- 23.5
Income before
taxes 72.1 19.5 91.6 38.8 41.2 80.0
Income tax
provision 20.8 12.6 33.4 13.4 15.8 29.2
Net income $51.3 $6.9 $58.2 $25.4 $25.4 $50.8
Paid in-kind
dividends on
Series B and
C preferred
stock -- -- -- (1.4) 1.4 --
Income allocable
to common
stockholders $51.3 $6.9 $58.2 $24.0 $26.8 $50.8
Earnings per share:
Basic $0.79 $0.90 $0.41 $0.87
Diluted $0.78 $0.89 $0.40 $0.74
JARDEN CORPORATION
NET SALES AND OPERATING INCOME BY SEGMENT (Unaudited)
(in millions)
Branded Consumer Outdoor Process
Consumables Solutions Solutions Solutions
(a) (b) (c)
Three months ended
September 30, 2006
Sales $221.9 $540.7 $208.4 $79.1
Adjusted segment
earnings (loss) $38.4 $83.7 $17.8 $7.0
Adjustments to
reconcile to
reported operating
earnings (loss):
Manufacturer's
profit in
inventory (3.9) -- -- --
Reorganization costs (0.8) (8.2) (0.9) --
Other integration-
related costs -- (0.6) -- --
Stock-based
compensation -- -- -- --
Depreciation and
amortization (3.3) (5.9) (4.1) (2.3)
Operating earnings
(loss) $30.4 $69.0 $12.8 $4.7
Total
Intercompany Operating Corporate/
Eliminations (d) Segments Unallocated Consolidated
Three months ended
September 30, 2006
Sales $(17.0) $1,033.1 $ -- $1,033.1
Adjusted segment
earnings (loss) $ -- $146.9 $ (9.6) $137.3
Adjustments to
reconcile to
reported operating
earnings (loss):
Manufacturer's
profit in
inventory -- (3.9) -- (3.9)
Reorganization costs -- (9.9) 2.4 (7.5)
Other integration-
related costs -- (0.6) (1.1) (1.7)
Stock-based
compensation -- -- (6.4) (6.4)
Depreciation and
amortization -- (15.6) (0.5) (16.1)
Operating earnings
(loss) -- $116.9 $(15.2) $101.7
Branded Consumer Outdoor Process
Consumables Solutions Solutions Solutions
(a) (b) (c)
(Reclassified)
Three months ended
September 30, 2005
Sales $189.1 $495.0 $214.1 $60.5
Adjusted segment
earnings (loss) $30.8 $71.9 $18.9 $7.9
Adjustments to
reconcile to
reported operating
earnings (loss):
Manufacturer's
profit in inventory -- (4.2) -- --
Reorganization costs (0.5) (6.1) (0.3) --
Stock-based
compensation -- -- -- --
Depreciation and
amortization (2.7) (6.0) (4.3) (2.4)
Operating earnings
(loss) $27.6 $55.6 $14.3 $5.5
Total
Intercompany Operating Corporate/
Eliminations (d) Segments Unallocated Consolidated
(Reclassified)
Three months ended
September 30, 2005
Sales $(20.7) $938.0 $ -- $938.0
Adjusted segment
earnings (loss) $ -- $129.5 $(10.6) $118.9
Adjustments to
reconcile to
reported operating
earnings (loss):
Manufacturer's
profit in inventory -- (4.2) -- (4.2)
Reorganization costs -- (6.9) (0.3) (7.2)
Stock-based
compensation -- -- (29.8) (29.8)
Depreciation and
amortization -- (15.4) -- (15.4)
Operating earnings
(loss) -- $103.0 $(40.7) $62.3
