Jarden ‘08 Profits Rise From K2 Acquisition

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February 12 2009
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Jarden Corporation’s Outdoors Solutions division, which includes K2, posted Q4 sales of $494 million, a 13.4% drop from the same period last year. However, teh company’s operating loss for the quarter improved over 98% from $21.5 million in 2007 to a loss of $0.4 million in 2008. Total sales for 2008 were up 46.1% to $2.5 billion and operating earnings jumped 293% to $172 million, primarily due to a boost in revenues from the company’s acquisition of K2.

According to SportsOneSource:

The company recorded a net loss of $170 million, or $2.28 a share, after a non-cash impairment charge against goodwill and intangible assets of $283 million resulting from the company’s annual impairment testing. Sales decreased 8% to $1.4 billion from $1.5 billion a year ago.

The loss in the quarter ended Dec. 31, 2008 compared to a net loss of $11.2 million, or 15 cents, a year ago.
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On a non-GAAP basis, adjusted net income was $62.7 million, or $0.83 per diluted share, for the quarter ended Dec. 31, 2008, compared to $48.9 million, or $0.64 per diluted share, for the quarter ended December 31, 2007.

For the year ended Dec. 31, 2008, net sales increased 16% to $5.4 billion compared to $4.7 billion in the previous year. For the year ended Dec. 31, 2008, the company recorded a net loss of $58.9 million, or (78 cents) per share, compared to net income of $28.1 million, or 38 cents per diluted share, in the year ended Dec. 31, 2007. The results include a non-cash impairment charge against goodwill and intangible assets of $283 million resulting from the company’s annual impairment testing. On a non-GAAP basis, adjusted net income was $209 million, or $2.74 per diluted share, for the year ended Dec. 31, 2008, compared to $171 million, or $2.33 per diluted share, for the year ended Dec. 31, 2007.

At Dec. 31, 2008, the company’s working capital was $1.4 billion and cash and cash equivalents were $393 million, over $30 million higher than the estimate provided in early January. The company’s leverage ratio for bank purposes was 3.5x, ahead of the estimate provided in January, the position at the end of 2007 and leaving significant room below the bank covenant. For the year ended Dec. 31, 2008 cash flows from operations was $250 million, adding to the company’s overall strong liquidity position.

The Pure Fishing, Inc. and K2 Inc. businesses have been included in the results of operations from their dates of acquisition in April 2007 and August 2007, respectively.