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Jarden Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 1, 2011 04:06PM

Jarden Corp. (JAH) filed Quarterly Report for the period ended 2011-06-30. Jarden Corp. has a market cap of $2.84 billion; its shares were traded at around $30.99 with a P/E ratio of 9.96 and P/S ratio of 0.47. The dividend yield of Jarden Corp. stocks is 1.11%. Jarden Corp. had an annual average earning growth of 21% over the past 10 years. GuruFocus rated Jarden Corp. the business predictability rank of 2.5-star.



Highlight of Business Operations:

Cost of sales increased $60.4 million, or 5.3%, to $1.2 billion for the three months ended June 30, 2011 versus the same prior year period. The increase is primarily due to the impact of acquisitions and foreign currency translation (approximately $37 million) and increased sales, partially offset by a $25.3 million charge recorded during the three months ended June 30, 2010 related to the purchase accounting adjustment for the elimination of manufacturer’s profit in inventory related to the Acquisition that requires the fair value of the inventory acquired to be valued at the sales price of the finished inventory, less costs to complete and a reasonable profit allowance for selling effort. Cost of sales as a percentage of net sales for the three months ended June 30, 2011 and 2010 was 71.5% and 73.4%, respectively (71.8% for the three months ended June 30, 2010 excluding the charge for the elimination of manufacturer’s profit in inventory).

SG&A increased $38.7 million, or 14.1%, to $313 million for the three months ended June 30, 2011 versus the same prior year period. The increase is primarily due to the impact of acquisitions and gains recorded during the three months ended June 30, 2010 related to derivatives not designated as effective hedges ($14.9 million) and a mark-to-market gain ($10.1 million) associated with the Company’s Euro-denominated debt and intercompany loans.

Operating earnings for the three months ended June 30, 2011 in the Outdoor Solutions segment increased $5.9 million, or 6.0%, versus the same prior year period primarily due to the gross margin impact of higher sales (approximately $23 million), partially offset by a $17.3 million increase in SG&A. Operating earnings for the three months ended June 30, 2011 in the Consumer Solutions segment increased $6.8 million, or 18.5%, versus the same prior year period primarily due to increased gross margins during 2011 (approximately $16 million), partially offset by an increase in SG&A ($9.0 million). Operating earnings for the three months ended June 30, 2011 in the Branded Consumables segment increased $42.7 million, or 1,857%, versus the same prior year period primarily due to the impact of acquisitions and the charges recorded during the three months ended June 30, 2010 related to the impairment of goodwill and intangible assets ($18.3 million) and the purchase accounting adjustment for the elimination of manufacturer’s profit in inventory ($25.3 million) related to the Acquisition. Operating earnings in the Process Solutions segment for the three months ended June 30, 2011 decreased $2.4 million, or 26.7%, versus the same prior year period primarily as the result of the negative gross margin impact of lower sales and higher commodity costs.

Net income for the three months ended June 30, 2011 increased $35.5 million to $73.9 million versus the same prior year period. For the three months ended June 30, 2011 and 2010, earnings per diluted share were $0.83 and $0.43, respectively, The increase in net income was primarily due to: charges recorded during the three months ended June 30, 2010 related to the impairment of goodwill and intangible assets ($18.3 million) and the purchase accounting adjustment for the elimination of manufacturer’s profit in inventory ($25.3 million); incremental earnings from acquisitions; and the gross margin impact of higher sales.

Operating earnings for the six months ended June 30, 2011 in the Outdoor Solutions segment increased $16.0 million, or 11.6%, versus the same prior year period primarily due to the gross margin impact of higher sales (approximately $39 million), partially offset by a $22.9 million increase in SG&A. Operating earnings for the six months ended June 30, 2011 in the Consumer Solutions segment increased $7.0 million, or 9.2%, versus the same prior year period primarily due to increased gross margins during 2011 (approximately $23 million), partially offset by an increase in SG&A ($15.9 million). Operating earnings for the six months ended June 30, 2011 in the Branded Consumables segment increased $58.3 million, or 411%, versus the same prior year period primarily due to the impact of acquisitions and the charges recorded during the six months ended June 30, 2010 related to the impairment of goodwill and intangible assets ($18.3 million) and the purchase accounting adjustment for the elimination of manufacturer’s profit in inventory ($25.3 million) related to the Acquisition. Operating earnings in the Process Solutions segment for the six months ended June 30, 2011 decreased $1.2 million, or 8.2%.

Net income for the six months ended June 30, 2011 increased $114 million to $92.9 million versus the same prior year period. For the six months ended June 30, 2011 and 2010, earnings (loss) per diluted share were $1.04 and ($0.23), respectively. The increase in net income was primarily due to: charges recorded during the six months ended June 30, 2010, which include, $78.1 million of non-cash charges related to the Company’s Venezuela operations (see “Venezuela Operations”), impairment charges for goodwill and intangible assets ($18.3 million) and the purchase accounting adjustment for the elimination of manufacturer’s profit in inventory ($25.3 million); incremental earnings from acquisitions; and the gross margin impact of higher sales, partially offset by an increase in interest expense ($7.0 million) and the loss on early extinguishment of debt ($12.8 million) recorded during the six months ended June 30, 2011.

Read the The complete Report



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