Overall, Jarden Corporation’s management was pleased with the results of its Outdoor Solutions division in the quarter ended March 31, a seasonally slow period for the company. The sell-in of Coleman, fishing and team sports gear “met expectations” and margins were flat, excluding currency effects.
The company’s key objectives in 2009 include gaining more market share at retail through its various brands, continuing to drive costs out of its various businesses, maintaining a focus on cash flow (expected to be $250 million from operations after capital expenditures), and preparing for the second half of the year or 2010, when retailers are expected to begin increasing their open-to-buys again.
First-quarter operating earnings fell by 28 percent to $26.6 million from $37.0 million in Outdoor Solutions, including the impact of $9.4 million in charges related to the continuing integration of K2. Segment earnings excluding these costs as well as amortization and depreciation were down by 12 percent to $51.9 million.
Outdoor sales were down by 10.2 percent to $591.3 million, but without the weakness of the dollar, sales in constant currencies would have fallen by about 5 percent, with operating earnings nearly flat. The Outdoor Solutions division also includes Pure Fishing, Marmot Mountain, Tubbs, Atlas as well as Camping Gaz, the French company which is bundled with Coleman.
Jarden Corporation’s overall revenues were down by 6.4 percent to $1.14 billion, largely because of the foreign currency effect. Jarden continues to work diligently to lower its overall inventory levels across all segments. At quarter’s end, inventories were down by $113 million year-over-year and $59 million from the end of the fourth quarter.
On the financial front, the company has sold an additional 12 million common shares and secured an amendment to a $100 million senior credit facility due June 2012. Also, Jarden says it will move to reduce its $1.7 billion Term B facility to $1 billion before re-financing the package, and it does not expect any more integration and restructuring charges by 2010.