Jarden Corporation reported solid top-line growth and better than
expected adjusted EPS and net income. The sales growth was in large
part due to its acquisition K2 Inc. and Pure Fishing, both of which
closed in August of this year. On the bottom line, much of the growth
was due to margin improvements at Jarden’s existing businesses, which
include Coleman and several other consumer products companies.

Q3 sales increased 28% to $1.3 billion from $1.0 billion the prior
year. The entire increase came from Jarden’s Outdoor Solutions segment,
which now includes Pure Fishing, K2 Sports, Shakespeare, Stearns,
Volkl, Marmot, and several other outdoor and snowsports brands, in
addition to the pre-existing Coleman business.

Coleman sales were said to be flat, along with most of Jarden’s
non-outdoor consumer brands. Overall, Jarden’s Outdoor Solutions
segment reported $498.4 million in sales for the quarter, up from
$208.4 million last year. That would put K2  and Pure Fishing
combined at roughly $290 million. While not an apples-to-apples
comparison, K2 Inc. reported $356.9 million in sales during its fiscal
third quarter in 2006. 

Outdoor Solutions operating margin was nearly cut in half to 3.2% of
sales compared to 6.1% last year. This drop was due to the inclusion of
the K2 Inc. portfolio of brands and Pure Fishing.

Total company’s net income was $21.2 million, or 28 cents per diluted
share, compared to $51.3 million, or 78 cents per diluted share, for Q3
of 2006, a 58.7% decline.  However, adjusted net income, taking
into account restructuring and integration expenses, was $70.3 million
compared to $58.9 million. As adjusted, diluted EPS was 94 cents per
diluted share compared to 90 cents per share a year ago.
 
>>> While
this deal creates far less visibility into the former K2 
business, it may be telling that the company did not re-name the
Outdoor Solutions group as the Sports Solutions group.  What does
that mean for the Rawlings/Worth business?  How about Earth
Products?  Will we see an MBO or two here in the near
future? 



>>> Jarden has to assess what fits and what doesn’t fit within this structure…