Jarden sales dip, but CEO optimistic about company's cash position

By Lisa Kerner

Charlotte, N.C., Sept. 23 - The sluggish economy has paid off somewhat for Jarden Corp., according to company chairman and chief executive officer Martin E. Franklin.

Franklin said people are doing more things like camping and staying home, using any number of Jarden's 100 brand products such as Coleman, CrockPot and Ball.

A majority of Jarden's products sell for under $30 and none of its single product lines accounts for more than 5% of the company's revenue, Franklin said during a presentation at the Barclays Capital Back-to-School Consumer Conference in Boston on Wednesday.

Jarden, a Rye, N.Y.-based consumer products company, has not made a significant acquisition in the past two years, said Franklin, preferring to keep its leverage ratio in check.

Companies considered as possible acquisitions must have, among other things, category-leading positions in niche markets, products that generate recurring revenue and attractive historical margins or margin expansion opportunities, according to Franklin's presentation.

James Lillie, Jarden's president and chief operating officer, said current business drivers include achieving long-term average organic sales growth of between 3% and 5% and maintaining a bank leverage ratio of approximately 3 times.

From 2003 to 2008, Jarden's net sales grew to $5.3 billion from $839 million and the company's adjusted diluted earnings per share grew to $2.74 from $1.49.

Jarden's cash flow from operations grew to $250 million in 2008 from $70 million in 2003, according to Lillie's presentation.

Lillie said Jarden's leverage at the beginning of the year was 3.5 to 1 and is now at 3.0 to 1.

Despite first-half sales falling 6.5%, Lillie said he still feels "very good" about cash generation.

Franklin said the company does not need the capital markets "for anything" and can fund out of cash on hand, cash availability or cash flow.

According to Franklin, Jarden is now in a position to really think about how to allocate capital and is possibly getting closer to paying dividends to its shareholders.

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