Earnings at Jarden Corporation's Outdoor Segment rose dramatically on double-digit sales growth in the fourth quarter and year ended Dec. 31, 2010 as charges related to acquisition fell off dramatically.
Fourth-quarter operating earnings from the segment grew nearly seven fold to $22.4 million as reorganization and other integration costs from recent acquisitions dropped off to $7.4 million from $29.2 million in the fourth quarter of 2009. Jarden acquired K2 in 2007 in a deal then valued at $1.2 billion.
Jarden's total fourth-quarter sales, including sales from Jarden's Consumer Solutions, Branded Consumables and Process Solutions segments, increased 21% to $1.7 billion. Net income reached $46.7 million, or 52 cents per diluted share, compared to net income of $1.2 million, or a penny per diluted share, for the fourth quarter of 2009. On a non-GAAP basis, adjusted net income for the quarter was $76.6 million, or 86 cents per diluted share, compared to $68.5 million, or 77 cents per diluted share, for the same period in the previous year. The quarter ended Dec. 31, 2010 includes the results from Mapa Spontex, which was acquired April 1, 2010.
For the year ended Dec. 31, 2010, Jarden's total net sales increased 17%, with organic net sales growth of 7%, to $6.0 billion compared to $5.2 billion in the previous year. Net income reached $107 million, or $1.19 per diluted share, compared to net income of $129 million, or $1.52 per diluted share, in the previous year. On a non-GAAP basis, adjusted net income was $260 million, or $2.90 per diluted share, compared to $221 million, or $2.60 per diluted share, in the previous year. The performance reflects the results from Mapa Spontex, a Paris-based maker of baby products and cleaning solutions acquired April 1, 2010.
“Our record fourth quarter results marked a strong finish to what was an outstanding year for Jarden,” said Martin E. Franklin, Chairman and Chief Executive Officer of Jarden Corporation. “We reported exceptional organic growth of seven percent, both for the quarter and the full year, which was well above our goal of 3-5%. This revenue growth, combined with the acquisitions completed during the year and our ability to leverage our operating platform to help offset macro cost increases, allowed us to produce record earnings and generate substantial free cash flow during the fourth quarter.
As Jarden enters its 10th year, our focus on the fundamental characteristics that have allowed us to win over the last decade, including new product development, market leading brands, and operational excellence, remains unchanged,” Franklin continued. “We believe this commitment, coupled with the operating values encapsulated in Jarden's DNA, will drive consistent, profitable growth for our shareholders in the future. I believe that Jarden is just beginning to hit its stride and I am as personally committed as ever to helping Jarden build on its success in the future.”
JARDEN CORPORATION NET SALES AND OPERATING EARNINGS BY SEGMENT (Unaudited) (in millions) | |||||||||||||||||||||||||||||
Outdoor Solutions | Consumer Solutions | Branded Consumables | Process Solutions | Intercompany Eliminations (a) | Total Operating Segments | Corporate/ Unallocated | Consolidated | ||||||||||||||||||||||
Quarter ended December 31, 2010 | |||||||||||||||||||||||||||||
Net sales | $ | 604.0 | $ | 617.1 | $ | 398.4 | $ | 77.5 | $ | (12.8) | $ | 1,684.2 | $ | — | $ | 1,684.2 | |||||||||||||
Segment earnings (loss) | $ | 47.8 | $ | 101.7 | $ | 60.7 | $ | 8.9 | $ | — | $ | 219.1 | $ | (15.7) | $ | 203.4 | |||||||||||||
Adjustments to reconcile to reported operating earnings(loss): | |||||||||||||||||||||||||||||
Fair value adjustment to inventory | (2.1) | — | — | — | — | (2.1) | — | (2.1) | |||||||||||||||||||||
Acquisition-related and other items | (7.4) | (4.0) | (3.4) | — | — | (14.8) | (13.0) | (27.8) | |||||||||||||||||||||
Venezuela hyperinflationary and devaluation charge recovery, net | — | — | — | — | — | — | 7.5 | 7.5 | |||||||||||||||||||||
Impairment of goodwill and other intangibles | (0.7) | — | — | — | — | (0.7) | — | (0.7) | |||||||||||||||||||||
Depreciation and amortization | (15.2) | (7.4) | (13.3) | (3.4) | — | (39.3) | (0.5) | (39.8) | |||||||||||||||||||||
Operating earnings (loss) | $ |
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