UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 23, 2015
Jarden Corporation
(Exact name of registrant as specified in its charter)
Delaware | 001-13665 | 35-1828377 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
1800 North Military Trail, Boca Raton, Florida |
33431 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (561) 447-2520
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On April 23, 2015, we issued a press release announcing our financial results for the quarter ended March 31, 2015. A copy of our press release announcing our earnings results for the quarter ended March 31, 2015 is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The earnings press release furnished herewith contains financial measures that are not in accordance with generally accepted accounting principles in the United States of America (GAAP). For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a companys 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 in accordance with GAAP in the statements of operations, 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, Jarden Corporation (the Company) has provided reconciliations within the earnings release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
To supplement our consolidated financial statements presented in accordance with GAAP, the Company uses non-GAAP measures of organic net sales growth, adjusted gross margin, adjusted selling, general and administrative expenses, segment earnings, adjusted net interest expense, adjusted income tax provision, adjusted net income and adjusted basic and diluted earnings per share. These non-GAAP measures are provided because management of the Company uses these financial measures in monitoring and evaluating the Companys 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 Companys 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 impairment charges of goodwill, intangibles and other assets, certain restructuring costs, acquisition-related and other costs, non-cash purchase accounting adjustments, the elimination of manufacturers profit in inventory, Venezuela related charges (deconsolidation, hyperinflationary and foreign exchange-related charges), non-cash stock-based compensation costs, gain (loss) on sale of certain assets, loss on early extinguishment of debt, non-cash original issue discount amortization and other items, as applicable. These non-GAAP measures should be considered in addition to, not a substitute for, measures of financial performance prepared in accordance with GAAP.
Also attached to this Current Report on Form 8-K as Exhibit 99.2 is a reconciliation of certain non-GAAP financial measures anticipated to be discussed during our April 23, 2015 earnings conference call to the most directly comparable financial measure in accordance with GAAP. EBITDA is expected to be presented in the earnings conference call because the Companys credit facility and senior subordinated notes contain financial and other covenants which are based on or refer to the Companys EBITDA. Additionally, EBITDA is a basis upon which our management assesses financial performance and we believe it is frequently used by securities analysts, investors and other interested parties in measuring the operating performance
and creditworthiness of companies with comparable market capitalization to the Company, many of which present EBITDA when reporting their results. Furthermore, EBITDA is one of the factors used to determine the total amount of bonuses available to be awarded to management and other employees. EBITDA is widely used by the Company to evaluate potential acquisition candidates. Adjusted EBITDA (as referred to as Segment Earnings), excluding adjustments relating to non-cash impairment charges of goodwill, intangibles and other assets, certain restructuring costs, acquisition-related and other costs, non-cash purchase accounting adjustments, the elimination of manufacturers profit in inventory, Venezuela related charges (deconsolidation, hyperinflationary and foreign exchange-related charges), non-cash stock-based compensation costs, loss on early extinguishment of debt, non-cash original issue discount amortization and other items, as applicable, is expected to be presented in the earnings conference call because it is a basis upon which the Companys management has assessed its financial performance in the years presented. Organic net sales growth, net sales growth excluding the impacts of foreign exchange, certain acquisitions and exited businesses from year over year comparisons, is expected to be presented in the earnings conference call because the Company believes this measure provides investors with a more complete understanding of the underlying sales trends by providing net sales on a consistent basis and it is one of the measures management of the Company uses to analyze operating performance. Additionally, the Company uses non-GAAP financial measures because the Companys 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 impairment charges of goodwill, intangibles and other assets, certain restructuring costs, acquisition-related and other costs, non-cash purchase accounting adjustments, the elimination of manufacturers profit in inventory, Venezuela related charges (deconsolidation, hyperinflationary and foreign exchange-related charges), gain (loss) on sale of certain assets, non-cash stock-based compensation costs, loss on early extinguishment of debt, non-cash original issue discount amortization and other items.
The non-GAAP financial measures described above should be considered in addition to, but not as a substitute for, measures of financial performance prepared in accordance with GAAP that are presented in the earnings release.
The information in this Item 2.02 of this Current Report on Form 8-K and Exhibits 99.1 and 99.2 attached hereto shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits. The following Exhibits are furnished herewith as part of this report: |
Exhibit |
Description | |
99.1 | Press Release of Jarden Corporation, dated April 23, 2015, with respect to our financial results for the quarter ended March 31, 2015 (furnished only). | |
99.2 | Reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures (furnished only). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 23, 2015
JARDEN CORPORATION | ||
By: | /s/ James L. Cunningham III | |
Name: | James L. Cunningham III | |
Title: | Senior Vice President and Chief Accounting Officer |
EXHIBIT INDEX
Number |
Exhibit | |
99.1 | Press Release of Jarden Corporation, dated April 23, 2015, with respect to our financial results for the quarter ended March 31, 2015 (furnished only). | |
99.2 | Reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures (furnished only). |
Exhibit 99.1
Jarden Corporation | ||
Rachel Wilson | ||
203-845-5300 | ||
Investor Relations: Allison Malkin | ||
ICR, Inc. | ||
203-682-8225 | ||
Press: Liz Cohen | ||
Weber Shandwick | ||
212-445-8044 |
FOR IMMEDIATE RELEASE
JARDEN REPORTS FIRST QUARTER RESULTS
Net Sales of $1.7 Billion
Organic Net Sales Growth of 4.7%
Miami, FL, April 23, 2015 Jarden Corporation (NYSE: JAH) today reported its financial results for the quarter ended March 31, 2015.
For the quarter ended March 31, 2015:
| Organic net sales grew 4.7% or $82.2 million in the first quarter 2015; |
| Reported net sales were $1.73 billion for the first quarter 2015 and $1.73 billion for the same period in 2014; |
| Reported gross margin was 28.9% for first quarter 2015, compared to 29.7% for the same period in 2014; |
| Net loss of $55.5 million for first quarter of 2015, compared to net income of $3.7 million for the same period in 2014; |
| Loss per share was $0.30 per diluted share for first quarter 2015, compared to earnings of $0.02 per diluted share for the same period in 2014; |
| Adjusted gross margin was 29.8% in the first quarter 2015, compared to 30.4% for the same period in 2014; |
| Adjusted net income was $11.0 million in the first quarter of 2015, compared to $25.7 million for the same period in 2014; and |
| Adjusted earnings per share were $0.06 per diluted share in the first quarter of 2015, compared to $0.13 per diluted share for the same period in 2014. |
We have started the year with a solid performance, including 4.7% organic growth, driven by product innovation and continued momentum across our business. We reported first quarter revenue equal to last years record results despite significant continued foreign exchange headwinds and delivered as adjusted earnings per share in-line with our 2015 plan and expectations, said Martin E. Franklin, Executive Chairman.
James E. Lillie, Chief Executive Officer, commented, We are pleased to report a positive start to the year with our organic sales momentum continuing in the first quarter. This quarters strong results
- 1 -
reflect our 2014 inventory planning, which enabled us to muscle through the West Coast port issues. We believe that we are well positioned to deliver on our 2015 plan which includes organic sales growth in the 3-5% range and double digit adjusted earnings per share growth, on a currency neutral basis. Mr. Lillie added, As we enter our seasonally larger quarters, our teams remain focused on delivering a successful 2015, as well as delivering our long-term objectives.
Effective March 31, 2015 the Company deconsolidated its businesses in Venezuela and recorded the charges related to this accounting change, which are detailed in the notes to this release.
All earnings per share and shares outstanding amounts have been adjusted to reflect the effect of the 3-for-2 split of the Companys outstanding shares of common stock that occurred during the fourth quarter of 2014.
Please see the schedule accompanying this release for a reconciliation of non-GAAP organic net sales growth, adjusted gross margins, segment earnings, adjusted net income and adjusted basic and diluted earnings per share to the comparable GAAP measures.
The Company will be hosting a conference call at 8:30 a.m. (EDT) today, April 23, 2015, to further discuss its first quarter results. To listen to the call by telephone, please dial 888-576-4398 (domestic) or 719-325-2244 (international) and provide passcode: 2060611. The call will be simultaneously webcast at www.jarden.com. Supplemental information can be found in the For Investors section of the Companys website. A replay of the call and webcast will be available for three weeks shortly after completion of the live call. To access the replay, call 888-203-1112 (domestic) or 719-457-0820 (international) and provide passcode: 2060611 or visit www.jarden.com.
Jarden Corporation is a leading provider of a diverse range of consumer products with a portfolio of over 120 trusted, quality brands sold globally. Jarden operates in three primary business segments through a number of well recognized brands, including: Branded Consumables: Ball®, Bee®, Bernardin®, Bicycle®, Billy Boy®, Crawford®, Diamond®, Fiona®, First Alert®, First Essentials®, Hoyle®, Kerr®, Lehigh®, Lifoam®, Lillo®, Loew-Cornell®, Mapa®, Millefiori®, NUK®, Pine Mountain®, Quickie®, Spontex®, Tigex® and Yankee Candle®; Outdoor Solutions: Abu Garcia®, AeroBed®, Berkley®, Campingaz® and Coleman®, Dalbello®, ExOfficio®, Fenwick®, Gulp!®, Invicta®, K2®, Marker®, Marmot®, Mitchell®, PENN®, Rawlings®, Shakespeare®, Squadra®, Stearns®, Stren®, Trilene®, Völkl®, and Zoot®; and Consumer Solutions: Bionaire®, Breville®, Crock-Pot®, FoodSaver®, Health o meter®, Holmes®, Mr. Coffee®, Oster®, Patton®, Rainbow®, Rival®, Seal-a-Meal®, Sunbeam®, VillaWare® and White Mountain®. Headquartered in Florida, Jarden ranks #356 on the Fortune 500 and has over 30,000 employees worldwide. For further information about Jarden, 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 Companys earnings per share and adjusted diluted earnings per share, expected or estimated revenue, meeting financial goals, segment earnings, net interest expense, income tax provision, cash flow from operations, restructuring costs and other non-cash charges, the outlook for the Companys markets and the demand for its products, consistent profitable growth, free cash flow, future revenues and gross, operating and EBITDA margin improvement requirement and expansion, organic net sales growth, performance trends, bank leverage ratio, the success of new product introductions, growth in costs and expenses, the impact of commodities, currencies and transportation costs and the Companys ability to manage its risk in these areas, repurchase of shares of common stock from time to time under the Companys stock repurchase program, our ability to raise new debt, and the impact of acquisitions, divestitures, restructurings, and other unusual items, including the Companys ability to integrate and obtain the anticipated results and synergies from its consummated acquisitions. These projections and statements are based on managements 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 Companys periodic and other reports filed with the Securities and Exchange Commission.
- 2 -
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except earnings per share)
Quarters ended | ||||||||||||||||||||||||
March 31, 2015 | March 31, 2014 | |||||||||||||||||||||||
As Reported (GAAP) (2) |
Adjustments (1)(4) |
Adjusted (Non-GAAP) (1)(2)(4) |
As Reported (GAAP) (2) |
Adjustments (1)(4) |
Adjusted (Non-GAAP) (1)(2)(4) |
|||||||||||||||||||
Net sales |
$ | 1,731.5 | $ | | $ | 1,731.5 | $ | 1,731.8 | $ | | $ | 1,731.8 | ||||||||||||
Cost of sales |
1,231.0 | (15.3 | ) | 1,215.7 | 1,217.4 | (11.5 | ) | 1,205.9 | ||||||||||||||||
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Gross profit |
500.5 | 15.3 | 515.8 | 514.4 | 11.5 | 525.9 | ||||||||||||||||||
28.9 | % | 29.8 | % | 29.7 | % | 30.4 | % | |||||||||||||||||
Selling, general and administrative expenses |
528.7 | (72.9 | ) | 455.8 | 450.9 | (11.6 | ) | 439.3 | ||||||||||||||||
30.5 | % | 26.3 | % | 26.0 | % | 25.4 | % | |||||||||||||||||
Restructuring costs, net |
2.6 | (2.6 | ) | | 0.3 | (0.3 | ) | | ||||||||||||||||
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Operating earnings (loss) |
(30.8 | ) | 90.8 | 60.0 | 63.2 | 23.4 | 86.6 | |||||||||||||||||
Interest expense, net |
52.9 | (9.6 | ) | 43.3 | 54.0 | (5.7 | ) | 48.3 | ||||||||||||||||
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Income (loss) before taxes |
(83.7 | ) | 100.4 | 16.7 | 9.2 | 29.1 | 38.3 | |||||||||||||||||
Income tax provision (benefit) |
(28.2 | ) | 33.9 | 5.7 | 5.5 | 7.1 | 12.6 | |||||||||||||||||
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Net income (loss) |
$ | (55.5 | ) | $ | 66.5 | $ | 11.0 | $ | 3.7 | $ | 22.0 | $ | 25.7 | |||||||||||
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Earnings (loss) per share: |
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Basic |
$ | (0.30 | ) | $ | 0.06 | $ | 0.02 | $ | 0.14 | |||||||||||||||
Diluted |
$ | (0.30 | ) | $ | 0.06 | $ | 0.02 | $ | 0.13 | |||||||||||||||
Weighted average shares outstanding: |
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Basic |
185.4 | 185.4 | 187.7 | 187.7 | ||||||||||||||||||||
Diluted |
185.4 | 193.7 | 193.2 | 193.2 |
See Notes to Earnings Release attached
- 3 -
JARDEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)
March 31, 2015 |
March 31, 2014 |
December 31, 2014 |
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Assets: |
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Cash and cash equivalents |
$ | 680.6 | $ | 1,306.2 | $ | 1,164.8 | ||||||
Accounts receivable, net |
1,197.3 | 1,251.0 | 1,277.9 | |||||||||
Inventories |
1,720.9 | 1,585.4 | 1,504.7 | |||||||||
Deferred taxes on income |
202.9 | 194.4 | 166.2 | |||||||||
Prepaid expenses and other current assets |
179.7 | 157.5 | 204.4 | |||||||||
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Total current assets |
3,981.4 | 4,494.5 | 4,318.0 | |||||||||
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Property, plant and equipment, net |
798.1 | 854.8 | 849.9 | |||||||||
Goodwill |
2,873.3 | 2,632.4 | 2,880.2 | |||||||||
Intangible assets, net |
2,580.1 | 2,387.9 | 2,598.5 | |||||||||
Other assets |
147.1 | 158.6 | 152.7 | |||||||||
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Total assets |
$ | 10,380.0 | $ | 10,528.2 | $ | 10,799.3 | ||||||
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Liabilities and stockholders equity: |
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Short-term debt and current portion of long-term debt |
$ | 536.9 | $ | 660.4 | $ | 594.9 | ||||||
Accounts payable |
721.2 | 685.9 | 809.9 | |||||||||
Accrued salaries, wages and employee benefits |
163.3 | 168.8 | 195.1 | |||||||||
Other current liabilities |
389.9 | 457.1 | 477.3 | |||||||||
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Total current liabilities |
1,811.3 | 1,972.2 | 2,077.2 | |||||||||
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Long-term debt |
4,429.6 | 4,521.9 | 4,464.0 | |||||||||
Deferred taxes on income |
1,231.2 | 1,155.3 | 1,222.1 | |||||||||
Other non-current liabilities |
418.7 | 354.8 | 426.7 | |||||||||
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Total liabilities |
7,890.8 | 8,004.2 | 8,190.0 | |||||||||
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Total stockholders equity |
2,489.2 | 2,524.0 | 2,609.3 | |||||||||
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Total liabilities and stockholders equity |
$ | 10,380.0 | $ | 10,528.2 | $ | 10,799.3 | ||||||
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See Notes to Earnings Release attached
- 4 -
JARDEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Quarters ended | ||||||||
March 31, 2015 |
March 31, 2014 |
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Cash flows from operating activities: |
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Net income (loss) |
$ | (55.5 | ) | $ | 3.7 | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Depreciation and amortization |
47.5 | 45.6 | ||||||
Venezuela related charges |
60.6 | | ||||||
Stock-based compensation |
38.9 | 34.9 | ||||||
Excess tax benefits from stock-based compensation |
(19.8 | ) | (33.3 | ) | ||||
Other non-cash items |
(0.3 | ) | (7.0 | ) | ||||
Changes in operating assets and liabilities, net effects from acquisitions: |
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Accounts receivable |
53.6 | (57.4 | ) | |||||
Inventory |
(255.6 | ) | (175.6 | ) | ||||
Accounts payable |
(85.8 | ) | 23.0 | |||||
Other current assets and liabilities |
(104.2 | ) | (92.0 | ) | ||||
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Net cash used in operating activities |
(320.6 | ) | (258.1 | ) | ||||
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Cash flows from financing activities: |
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Net change in short-term debt |
(60.2 | ) | (5.5 | ) | ||||
Proceeds from issuance of long-term debt |
2.0 | 690.2 | ||||||
Payments on long-term debt |
(12.2 | ) | (30.1 | ) | ||||
Issuance (repurchase) of common stock, net |
(34.6 | ) | (193.9 | ) | ||||
Excess tax benefits from stock-based compensation |
19.8 | 33.3 | ||||||
Debt issue costs |
| (16.0 | ) | |||||
Other |
(0.4 | ) | (1.6 | ) | ||||
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Net cash provided by (used in) financing activities |
(85.6 | ) | 476.4 | |||||
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Cash flows from investing activities: |
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Additions to property, plant and equipment |
(48.1 | ) | (41.1 | ) | ||||
Acquisition of businesses, net of cash acquired |
(33.2 | ) | | |||||
Other |
39.9 | 3.3 | ||||||
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Net cash used in investing activities |
(41.4 | ) | (37.8 | ) | ||||
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Effect of exchange rate changes on cash and cash equivalents |
(36.6 | ) | (2.8 | ) | ||||
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Net increase (decrease) in cash and cash equivalents |
(484.2 | ) | 177.7 | |||||
Cash and cash equivalents at beginning of period |
1,164.8 | 1,128.5 | ||||||
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Cash and cash equivalents at end of period |
$ | 680.6 | $ | 1,306.2 | ||||
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See Notes to Earnings Release attached
- 5 -
JARDEN CORPORATION
NET SALES AND OPERATING EARNINGS BY SEGMENT (Unaudited)
(in millions)
Branded Consumables |
Consumer Solutions |
Outdoor Solutions |
Process Solutions |
Intercompany Elimination (a) |
Total Operating Segments |
Corporate/ Unallocated |
Consolidated | |||||||||||||||||||||||||
Quarter ended March 31, 2015 |
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Net sales |
$ | 645.3 | $ | 379.2 | $ | 624.9 | $ | 104.1 | $ | (22.0 | ) | $ | 1,731.5 | $ | | $ | 1,731.5 | |||||||||||||||
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Segment earnings (loss) |
$ | 74.6 | $ | 30.1 | $ | 40.4 | $ | 11.3 | $ | | $ | 156.4 | $ | (57.4 | ) | $ | 99.0 | |||||||||||||||
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Adjustments to reconcile to reported operating earnings (loss): |
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Restructuring costs, net |
(0.6 | ) | | | | | (0.6 | ) | (2.0 | ) | (2.6 | ) | ||||||||||||||||||||
Acquisition-related and other costs |
(4.4 | ) | (4.7 | ) | (8.2 | ) | | | (17.3 | ) | (1.8 | ) | (19.1 | ) | ||||||||||||||||||
Venezuela related charges (b) |
| | | | | | (60.6 | ) | (60.6 | ) | ||||||||||||||||||||||
Depreciation and amortization |
(20.5 | ) | (9.7 | ) | (13.1 | ) | (2.8 | ) | | (46.1 | ) | (1.4 | ) | (47.5 | ) | |||||||||||||||||
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Operating earnings (loss) |
$ | 49.1 | $ | 15.7 | $ | 19.1 | $ | 8.5 | $ | | $ | 92.4 | $ | (123.2 | ) | $ | (30.8 | ) | ||||||||||||||
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Branded Consumables |
Consumer Solutions |
Outdoor Solutions |
Process Solutions |
Intercompany Elimination (a) |
Total Operating Segments |
Corporate/ Unallocated |
Consolidated | |||||||||||||||||||||||||
Quarter ended March 31, 2014 |
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Net sales |
$ | 621.8 | $ | 344.0 | $ | 684.1 | $ | 102.3 | $ | (20.4 | ) | $ | 1,731.8 | $ | | $ | 1,731.8 | |||||||||||||||
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Segment earnings (loss) |
$ | 75.0 | $ | 36.5 | $ | 55.3 | $ | 12.3 | $ | | $ | 179.1 | $ | (52.8 | ) | $ | 126.3 | |||||||||||||||
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Adjustments to reconcile to reported operating earnings (loss): |
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Restructuring costs, net |
| (0.3 | ) | | | | (0.3 | ) | | (0.3 | ) | |||||||||||||||||||||
Acquisition-related and other costs |
(5.0 | ) | (3.0 | ) | (5.2 | ) | | | (13.2 | ) | | (13.2 | ) | |||||||||||||||||||
Venezuela related charges (b) |
| | | | | | (4.0 | ) | (4.0 | ) | ||||||||||||||||||||||
Depreciation and amortization |
(20.0 | ) | (7.7 | ) | (13.8 | ) | (2.8 | ) | | (44.3 | ) | (1.3 | ) | (45.6 | ) | |||||||||||||||||
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Operating earnings (loss) |
$ | 50.0 | $ | 25.5 | $ | 36.3 | $ | 9.5 | $ | | $ | 121.3 | $ | (58.1 | ) | $ | 63.2 | |||||||||||||||
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(a) | Intersegment sales are recorded at cost plus an agreed-upon intercompany profit on intersegment sales. |
(b) | Venezuela non-cash impairment, balance sheet remeasurement and deconsolidation charges in 2015 and foreign exchange losses on Venezuela cash conversion in 2014. |
- 6 -
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 quarters ended March 31, 2015 and 2014.
For the quarter ended March 31, 2015, adjustments to net loss included $60.6 million of Venezuela related charges, consisting of a non-cash impairment charge related to fixed assets, balance sheet remeasurement charges, and loss on deconsolidation; $19.1 million of costs primarily associated with European distribution realignment, rationalization of manufacturing facilities, Venezuela inventory write-down, and acquisition-related and other costs; $8.5 million of amortization of acquired intangible assets; $2.6 million of restructuring costs associated with lease exit costs; and $9.6 million of non-cash original issue discount amortization on convertible notes. Also included in the adjustments to net loss for the quarter ended March 31, 2015 is the tax provision adjustment of $33.9 million, which reflects the normalization of the adjusted results to the Companys 2015 estimated 34% effective tax rate.
For the quarter ended March 31, 2014, adjustments to net income included $0.3 million of restructuring costs primarily associated with international operations; $13.2 million of acquisition-related and other costs primarily associated with the rationalization of international manufacturing facilities; $4.0 million of Venezuela foreign exchange losses on cash conversion; $5.9 million of amortization of acquired intangible assets; and $5.7 million of non-cash original issue discount amortization on the convertible notes. Also, included in the adjustments to net income for the quarter ended March 31, 2014 is the tax provision adjustment of $7.1 million, which reflects the normalization of the adjusted results to the Companys 2014 estimated 33% effective tax rate.
Note 2: All earnings per share and shares outstanding amounts have been adjusted to reflect the effect of the 3-for-2 split of the Companys outstanding shares of common stock that occurred during the fourth quarter of 2014.
Note 3: Organic net sales growth is a non-GAAP measure of net sales growth excluding the impacts of foreign exchange, certain acquisitions and exited businesses from year-over-year comparisons. The Company believes this measure provides investors with a more complete understanding of the underlying sales trends by providing net sales on a consistent basis. Organic net sales growth is also one of the measures used by management to analyze operating performance. The following table provides a reconciliation of organic net sales growth to the comparable GAAP measure of net sales growth for the quarter ended March 31, 2015:
Quarter ended | ||||||||
March 31, 2015 | ||||||||
Reconciliation of Non-GAAP measure |
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Net sales decrease |
$ | (0.3 | ) | | ||||
Foreign exchange impacts |
92.3 | 5.3 | % | |||||
(Acquisitions) exited businesses, net |
(9.8 | ) | (0.6 | )% | ||||
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Organic net sales growth |
$ | 82.2 | 4.7 | % | ||||
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Note 4: This earnings release contains non-GAAP financial measures that may not be directly comparable to other similarly titled measures used by other companies. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a companys 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 operations, 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 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 monitoring and evaluating the Companys 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 Companys 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, non-cash impairment charges of goodwill, intangibles and other assets,
- 7 -
adjustments relating to certain restructuring costs, acquisition-related and other costs, non-cash purchase accounting adjustments, the elimination of manufacturers profit in inventory, Venezuela related charges (deconsolidation, hyperinflationary and foreign exchange-related charges), non-cash stock-based compensation costs, gain (loss) on sale of certain assets, loss on early extinguishment of debt, non-cash original issue discount amortization and other items, as applicable. Adjusted gross margin is calculated by dividing adjusted gross profit by net sales. Segment earnings (As Adjusted EBITDA) margin is calculated by dividing segment earnings (As Adjusted EBITDA) by net sales. Adjusted selling, general and administrative expenses (SG&A) margin is calculated by dividing adjusted SG&A by net sales. Adjusted net interest expense is calculated by deducting original issue discount amortization from net interest expense. Adjusted income tax provision is calculated by adding the income tax provision adjustment, which reflects the normalization of the adjusted results to the Companys estimated effective tax rate, to the income tax provision. These non-GAAP measures should be considered in addition to, but not as a substitute for, measures of financial performance prepared in accordance with GAAP.
Adjusted gross margins:
Quarters ended | ||||||||||||
March 31, 2015 |
March 31, 2014 |
Increase/ (Decrease) |
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Gross margins as reported |
28.9 | % | 29.7 | % | (0.8 | )% | ||||||
Acquisition-related and other costs, net |
0.9 | % | 0.7 | % | 0.2 | % | ||||||
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Adjusted gross margins |
29.8 | % | 30.4 | % | (0.6 | )% | ||||||
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Adjusted selling, general administrative costs as a percent of sales:
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Quarters ended | ||||||||||||
March 31, 2015 |
March 31, 2014 |
Increase/ (Decrease) |
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Reported selling, general and administrative cost as a percent of sales |
30.5 | % | 26.0 | % | 4.5 | % | ||||||
Acquisition-related and other costs, net |
(0.2 | )% | (0.1 | )% | (0.1 | )% | ||||||
Venezuela related charges |
(3.5 | )% | (0.2 | )% | (3.3 | )% | ||||||
Amortization of acquired intangibles |
(0.5 | )% | (0.3 | )% | (0.2 | )% | ||||||
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Adjusted selling, general and administrative costs as a percent of sales |
26.3 | % | 25.4 | % | 0.9 | % | ||||||
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# # #
- 8 -
Exhibit 99.2
JARDEN CORPORATION | ||
Reconciliation of Non-GAAP Financial Measures | ||
For the quarters ended March 31, 2015 and 2014 | ||
in millions |
Segment earnings:
Quarters ended | ||||||||
March 31, 2015 |
March 31, 2014 |
|||||||
Net income (loss) |
$ | (55.5 | ) | $ | 3.7 | |||
Income tax provision (benefit) |
(28.2 | ) | 5.5 | |||||
Interest expense, net |
52.9 | 54.0 | ||||||
Depreciation and amortization |
47.5 | 45.6 | ||||||
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Earnings before interest, taxes, depreciation and amortization (EBITDA) |
16.7 | 108.8 | ||||||
Other adjustments: |
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Restructuring costs, net |
2.6 | 0.3 | ||||||
Acquisition-related and other costs, net |
19.1 | 13.2 | ||||||
Venezuela related charges (a) |
60.6 | 4.0 | ||||||
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Segment earnings (As Adjusted EBITDA) |
$ | 99.0 | $ | 126.3 | ||||
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(a) | Venezuela non-cash impairment, balance sheet remeasurement and deconsolidation charges in 2015, and foreign exchange losses on Venezuela cash conversion in 2014. |
Organic net sales:
Organic net sales growth is a non-GAAP measure of net sales growth excluding the impacts of foreign exchange, certain acquisitions and exited businesses from year-over-year comparisons. The Company believes this measure provides investors with a more complete understanding of the underlying sales trends by providing net sales on a consistent basis. Organic net sales growth is also one of the measures used by management to analyze operating performance. The following tables provide reconciliation of organic net sales growth to the comparable GAAP measure of net sales growth for the quarter ended March 31, 2015:
Quarter ended March 31, 2015 | ||||||||||||||||||||||||
Branded | Consumer | Outdoor | Process | |||||||||||||||||||||
Consumables | Solutions | Solutions | Solutions | Eliminations | Consolidated | |||||||||||||||||||
Net sales growth (decrease) |
3.8 | % | 10.2 | % | (8.7 | )% | 1.8 | % | 7.8 | % | | |||||||||||||
Foreign exchange impacts |
5.9 | % | 4.8 | % | 5.7 | % | 0.4 | % | | 5.3 | % | |||||||||||||
(Acquisitions)/exited businesses and other, net |
| (2.8 | )% | | | | (0.6 | )% | ||||||||||||||||
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Organic net sales growth |
9.7 | % | 12.2 | % | (3.0 | )% | 2.2 | % | 7.8 | % | 4.7 | % | ||||||||||||
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Excluding impact of Cadence |
| (7.8 | )% | | | | (1.5 | )% | ||||||||||||||||
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Organic net sales growth, excluding impact of Cadence |
9.7 | % | 4.4 | % | (3.0 | )% | 2.2 | % | 7.8 | % | 3.2 | % | ||||||||||||
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Adjusted gross margins:
Quarters ended | ||||||||||||
March 31, 2015 |
March 31, 2014 |
Increase/ (Decrease) |
||||||||||
Gross margins as reported |
28.9 | % | 29.7 | % | (0.8 | )% | ||||||
Acquisition-related and other costs, net |
0.9 | % | 0.7 | % | 0.2 | % | ||||||
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Adjusted gross margins |
29.8 | % | 30.4 | % | (0.6 | )% | ||||||
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Adjusted selling, general administrative costs as a percent of sales:
Quarters ended | ||||||||||||
March 31, 2015 |
March 31, 2014 |
Increase/ (Decrease) |
||||||||||
Reported selling, general and administrative cost as a percent of sales |
30.5 | % | 26.0 | % | 4.5 | % | ||||||
Acquisition-related and other costs, net |
(0.2 | )% | (0.1 | )% | (0.1 | )% | ||||||
Venezuela related charges |
(3.5 | )% | (0.2 | )% | (3.3 | )% | ||||||
Amortization of acquired intangibles |
(0.5 | )% | (0.3 | )% | (0.2 | )% | ||||||
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Adjusted selling, general and administrative cost as a percent of sales |
26.3 | % | 25.4 | % | 0.9 | % | ||||||
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2015 Adjusted diluted earnings per share:
Adjusted diluted earnings per share is calculated based on GAAP earnings per diluted share but excluding the impact of certain restructuring, non-operational and non-cash charges and credits. At this time, management is not able to estimate the aggregate impact, if any, of these items in 2015 and therefore is not able to provide a corresponding GAAP equivalent for its adjusted earnings per diluted share guidance.
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