Jarden Corporation reported a 48.3% jump in first quater net sales to $1.22 billion compared to $820.9 million for the same period in the previous year. Net sales were buoyed by the acquisitions of Pure Fishing and K2 Inc., which collectively would have added approximately $635.5 million in sales to the 2007 quarter. Including that result in the year-ago quarter, net sales would have decreased 16.4%. Softness in the company's Branded Consumables and Consumer Solutions segments offset 3.6% organic sales growth for the Outdoor Solutions business.
“While the first quarter is traditionally Jarden's seasonally smallest quarter, our performance was in line with our expectations and a good start to achieving our full year outlook,” said Martin E. Franklin, chairman and CEO of Jarden Corporation. “Whereas the recessionary environment is having a negative impact on overall consumer confidence and retail sales, it was gratifying that our Outdoor Solutions segment posted overall organic sales growth of approximately 3.6% in the quarter, with four of its five divisions showing year-over-year organic growth. The top-line declines at Consumer Solutions and Branded Consumables were expected and, based on the programs in place for sell-in shipments during our busier quarters, we still anticipate that both these businesses will show organic growth in the second half and for the full year.”
Mr. Franklin continued, “The synergies from the K2 and Pure Fishing acquisitions are helping offset the cost inflation we are experiencing, particularly from commodities and the weak U.S. dollar. In addition, falling LIBOR rates during the quarter and better than budgeted cash flow helped reduce our interest expense. As we outlined at our Investor Day presentation in early March, we continue to believe that the tough macro environment provides the opportunity for Jarden to distinguish itself from a number of its competitors, with our market leading brands and focus on operating excellence, cost controls and new product development.”
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except earnings per share)Quarters ended
March 31, 2008
As Adjusted
Reported Adjustments (non-GAAP)
(GAAP) (1)(3) (1)(3)Net sales $1,217.4 $ — 1,217.4
Cost of sales 889.6 — 889.6
Gross profit 327.8 — 327.8
Selling, general and
administrative expenses 259.8 (4.0) 255.8
Reorganization and acquisition-
related integration costs, net 10.7 (10.7) —
Operating earnings 57.3 14.7 72.0
Interest expense, net 46.2 — 46.2
Loss on early extinguishment
of debt — — —
Income before taxes 11.1 14.7 25.8
Income tax provision 6.4 2.9 9.3
Net income $4.7 $11.8 16.5Earnings per share:
Basic $0.06 $0.22
Diluted $0.06 $0.22
Weighted average shares outstanding:
Basic 75.0 75.0
Diluted 76.2 76.2Quarters ended
March 31, 2007
As Adjusted
Reported Adjustments (non-GAAP)
(GAAP) (1)(2)(3) (1)(2)(3)Net sales $820.9 $ — $820.9
Cost of sales 619.6 — 619.6
Gross profit 201.3 — 201.3
Selling, general and
administrative expenses 151.2 (1.7) 149.5
Reorganization and acquisition-
related integration costs, net 9.1 (9.1) —
Operating earnings 41.0 10.8 51.8
Interest expense, net 25.0 — 25.0
Loss on early extinguishment
of debt 14.8 (14.8) —Income before taxes 1.2 25.6 26.8
Income tax provision (0.2) 9.9 9.7Net income $1.4 $15.7 $17.1
Earnings per share:
Basic $0.02 $0.25
Diluted $0.02 $0.24
Weighted average shares outstanding:
Basic 69.0 69.0
Diluted 70.3 70.3
