QUOTE AND NEWS
Motley Fool  Jun 18  Comment 
Buying back one-third of your shares could be a brilliant move or a huge waste of cash.
MarketWatch  Feb 9  Comment 
Newell Brands Inc. stock increased by more than 5% in late trading Thursday after a report that activist investor Starboard Value LP will launch a proxy fight that seeks to replace the entire board. According to The Wall Street Journal, Starboard...
Wall Street Journal  Jan 31  Comment 
Amid concerns about Newell Brands’ strategic direction, one of the architects of the company’s $19 billion Jarden Corp. acquisition, Martin Franklin, tried to wrest control of the board, failed and quit.
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Read full story for latest details. Podcast favorites: Blindsided: How ISIS Shook The World | Bernie gets the Axe | Guns in America
Benzinga  Apr 15  Comment 
Newell Rubbermaid Inc. (NYSE: NWL) disclosed it has completed integration of the company with Jarden Corporation successfully. According to the company, the deal created a $16 billion consumer goods firm at the global level with a strong portfolio...
Wall Street Journal  Apr 15  Comment 
Jarden and Newell Rubbermaid shareholders signed off on a $15 billion merger. Now executives will cut costs and possibly prune some of the well-known brands.
MarketWatch  Mar 22  Comment 
Newell Rubbermaid Inc. said it named Russ Torres to the newly created position of chief transformation officer. Torres, who was previously a partner at consulting firm Bain & Co., will lead integration and transformation efforts, including...
SeekingAlpha  Feb 12  Comment 




 
TOP CONTRIBUTORS

Jarden Corporation, (NYSE: JAH) a U.S. consumer products manufacturer, owns brands in more than twenty niche markets. The conglomerate makes everything from Mr. Coffee kitchen appliances to Coleman camping products and Bicycle and Bee playing cards. Because Jarden's brands are concentrated in mature, slow-growth markets, [1] the company has seen little organic growth in recent years and has used acquisitions to grow revenue. With approximately $2 billion in debt, the company is highly leveraged and will find further acquisitions more difficult in the face of tightening credit conditions that began in 2008.

Jarden also faces growing competition from its own customers' private label brands. Mass retailers like Wal-Mart are offering fewer third party products as they try to bolster slowing profits with extra revenue from their own lines of generic consumer goods.

Company Overview

As a consumer goods conglomerate, Jarden covers a wide spread of markets. The company has aggressively pursued revenue growth in the past through acquisitions- however, this has not led to significant growth in its net income. To improve its results, the company's management plans to take fuller advantage of potential economies of scale in its manufacturing processes.

Business Financials

In 2009, JAH earned a total of $5.2 billion in revenues. This was a decline from its 2008 total revenues of $5.4 billion. However, despite the decrease in revenues, JAH was able to improve its net income. Between 2008 and 2009, JAH went from a net loss of $59 million in 2008 to a net profit of $129 million in 2009.[2]

Business Segments

JAH operates three primary business segments: Outdoor Solutions, Consumer Solutions and Branded Consumables.

Outdoor Solutions

The Outdoor Solutions segment manufactures or sources, markets and distributes global consumer active lifestyle products for outdoor and outdoor-related activities. For general outdoor activities, Coleman® is a leading brand for active lifestyle products, offering an array of products that include camping and outdoor equipment such as air beds, camping stoves, coolers, among others.[3]

Consumer Solutions

The Consumer Solutions segment manufactures, markets, and distributes a diverse line of household products, including kitchen appliances and personal care and wellness products for home use. This segment maintains a strong portfolio of globally recognized brands including Bionaire®, Crock-Pot®, FoodSaver®, Health o meter®, Holmes®, Mr. Coffee®, Oster®, Patton®, Rival®, Seal-a-Meal®, Sunbeam® and Villaware®.[4]

Branded Consumables

The Branded Consumables segment manufactures, markets and distributes a broad line of branded consumer products, many of which are affordable, consumable and fundamental household staples, including arts and crafts paint brushes, children’s card games, among others.[5]

Key Trends and Forces

Private Label pressures from major customers

The mass retailers and department stores that Jarden sales its products to are increasingly moving toward private label brands. These brands are typically marketed under the retailer's brand name and come with higher margins than traditional branded products.

Dependency on mass retailers

Jarden's dependency on mass retailer (Wal-Mart Stores (WMT) alone accounted for roughly a quarter of Jarden's total sales. This exacerbates the threat from generic or private-label competition. When Wal-Mart and fellow big-box retailers push their own private-label alternatives to compensate for lower overall retail revenue, Jarden feels the squeeze. The effects of private-label competition are most pronounced in the Branded Consumables segment and in the camping-oriented Coleman product lines.

High commodity costs hurt already declining margins

Low commodity prices are vital to a company like Jarden, since its successful integration of mature low-margin businesses depends on the creation of cost-reducing production and distribution synergies for growth. Thus, rising oil prices put Jarden's cost structure under pressure, especially since its manufacturing business requires vast quantities of energy-derivative materials like resin (see Plastics Prices) and fuel.

Outdoor Solutions sensitive to weather

Jarden's Outdoor Solutions segment is highly responsive to variations in weather patterns. For instance, seasons of heavy snow increase demand for Jarden's various winter sports brands, and thus raises sales for the affected quarters. Similarly, a warm, dry autumn could increase demand for Jarden's Coleman line of camping products (currently one of its weaker offerings).

Competitors

Jarden's spread-out nature makes it impossible to pinpoint a single main competitor. Apart from a few relatively similar consumer goods/appliances conglomerates like Newell Rubbermaid (NWL), which has numbers roughly parallel to Jarden's for earnings and revenue in both business segments, Jarden's primary competitors are conglomerates whose holdings overlap with Jarden's in only a handful of niche markets, small companies entirely invested in niche markets (like Lifetime Brands (LCUT)), and private label competitors, some backed by hefty retailers like Wal-Mart Stores (WMT).

References

  1. Seeking Alpha, "Are Jarden's Earnings Set to Implode?"
  2. JAH 10-K 2009 Item 6 Pg. 36
  3. JAH 10-K 2009 Item 1 Pg. 2
  4. JAH 10-K 2009 Item 1 Pg. 4
  5. JAH 10-K 2009 Item 1 Pg. 7
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