Provisions booked by Jarden Corp. for its winter sports operations in the fourth quarter of 2015 add to speculation that they may be divested after the consummation of its merger with Newell Rubbermaid, which was agreed in principle on Dec. 14. Analysts had speculated that the whole Outdoor Solutions segment may be up for sale at some point, including major outdoor brands such as The Coleman Company and Marmot Mountain.

According to the last financial report announced by Jarden ahead of the merger, the Outdoor Solutions segment of Jarden Corp. recorded essentially flat sales of $2,737 million for last year as compared to $2,739 million in 2014. Jarden' acquisition of Jostens last November helped boost the segment's revenues by 13 percent to $703.9 million in the fourth quarter.

Excluding Jostens, sales were down by 2 percent in dollars and up by 3 percent in local currencies for the year. They were aided by increases in camping, fishing and winter sports thanks to expanded product offerings and, in part, increased demand in Europe and other markets.

However, the segment booked an operating loss of $159.3 million for the quarter, 220 percent higher than in the year-earlier period, due to Jarden's decision to take impairment charges totaling $145.6 million for its winter sports business, which comprises among other brands K2, Völkl, Marker, Madshus, Morrow and Ride Snowboards, Atlas and Tubbs. This compares with impairment charges of $9.9 million taken for the same period a year ago.

The writeoff includes a goodwill impairment charge of $119.2 million and a $26.4 million charge related to the fair value of certain trade names, primarily in the winter sports sector, because of a decrease in forecast cash values resulting from the continued deterioration in sales and margins in their operations. We understand the problems concerned K2, rather than Völkl, and that they were probably due to poor deliveries of skis manufactured by the group in Asia.

Also included are costs of $4.4 million for reductions in employment levels, primarily in Europe, and an inventory adjustment of $18.2 million. The acquisition of Jostens and the inventory adjustment depressed gross margins, which could not be offset by a decrease of about $28 million in selling and general & administrative costs.

For the full financial year, the Outdoor Solutions segment's operating profit was down by 82 percent to $34.1 million from $193.4 million. The profitability of the Outdoor Solutions - or rather Outdoor Problems – segment has been more erratic than the performance of the bigger consumer products segment of the future merged Newell Brands, with which it has a very tenuous relationship. Jarden moved into the sector in 2007 with its $765 million acquisition of K2. It has since acquired more than 30 other snow sports, outdoor and fishing tackle brands.

Meanwhile, the merger between Jarden and Newell Rubbermaid has made a big step forward as investors owning more than 90 percent of Jarden's bonds had already agreed by April 1, well ahead of an April 15 deadline for a final decision on the merger, to an exchange offer for new debt due to be issued by the future combined company. Acceptances were received from investors who own 90.4 percent of Jarden's €271.1 million in 3.75 percent notes and by 98.4 percent of those who own $295.1 million in 5 percent notes.

At separate meetings due to be held on April 15 in Atlanta, where Newell Rubbermaid is based, shareholder of both companies will vote on the terms of the merger, under which Newell Rubbermaid will pay $21 in cash plus 86.2 percent of a Newell Rubbermaid share for each share in Jarden. Anti-trust authorities in Europe and the U.S. have already cleared the merger.

Newell Rubbermaid has obtained a $1.5 billion loan and plans to issue up to $9.5 billion in new bonds to pay off a $10.5 bridge loan that Goldman Sachs has agreed to provide to finance the deal.