July 18, 2009 - Jarden Corp. (JAH-NYSE) engages in the manufacture, sourcing, marketing, and distribution of consumer products worldwide. The company operates in three segments: Outdoor Solutions, Consumer Solutions, and Branded Consumables.

The Consumer Solutions segment offers clippers and trimmers; electric blankets, mattress pads, and throws; household kitchen appliances, such as blenders, coffeemakers, irons, mixers, slow cookers, toasters, toaster ovens, and vacuum packaging machines; personal care and wellness products, including fans, humidifiers, heaters and air purifiers; hospitality products; and scales for consumer use. It sells its products through department stores, specialty retailers, and mass merchants.

The Branded Consumables segment provides household staples, including arts and crafts paint brushes, children's card games, clothespins, collectible tins, cordage, firelogs and firestarters, home safety equipment, home canning jars and accessories, kitchen matches, other craft items, plastic cutlery, playing cards and accessories, storage and workshop accessories, toothpicks, and other accessories through club, drug, grocery, hardware, mass merchant, and specialty retailers. The company was founded in 1991 and is headquartered in Rye, New York.

You may recognize some of Jarden's brands: Bicycle (cards), Ball, Coleman (camping), First Alert, Pine-Mountain, Mr. Coffee, Oster, Sunbeam, to name only a few. This is a company that makes many different products, most of which are priced at the lower to medium levels.

While the recession has been lowering sales, management's been busy lowering costs by limiting discretionary expenses, restructuring its business and streamlining operations. Also contributing to a better bottom line is commodity prices which seem to have stabilized taking some of the pressure off operating margins.

The company is expanding its already large product offerings and trying to capture more market share at the retail level. New products are expected to be introduced through 2012, most with lower price points. Another plus: it has in-home and backyard entertainment, and outdoor solution products that appeal to "staycationers" looking for at home activities during this difficult economic time. While inventories at the retail level are low currently, retailers should start rebuilding them toward the end of this year and certainly in 2010. And Jarden doesn't sell only in the U.S.. Overseas sales should help offset some of the domestic slowdown.

Jarden has been busy building its capital, issuing 12 million shares in April at $17.50, then placing a $300 million debt offering with an 8% coupon. Proceeds will most likely be used to pay off existing debt, new products and market expansion.

The stock went on quite a tear between the end of 2001 when it traded at $2.40 a share (all prices are split adjusted for 3 stock splits since 2002). It didn't stop going up until 2005 when it reached $42.30. It corrected for a while, then went to another new high of $45.10 in 2007. But then it cratered, reaching $7.20 at the end of last year during the October/November melt down in the general market. Even in this year, the stock has gone from $8.80 to $21, a 185% gain in a matter of 6 months.

More numbers: Market Cap is $1.61 billion. The Forward P/E is 21. Price to Book is 1.16. Operating margin for the last 12 months was 9.14%. Total cash is $267 million, making $3.49 a share in cash. Total debt is $2.77 billion. Current ratio is 2.185. Book value per share is $18.18. Beta is a rather high 1.66. There are 76.41 million shares outstanding and float of 73.53 million. Insiders own 3.65%. Institutions have 89.4%. There is no dividend.

Jarden has fixed some of its problems, the biggest one being the loss it showed last year. With better margins, better efficiencies, and lower cost products coming to market, the company would appear to be back on the right track to profitablity for some time to come. Its products shoud continue to sell well because of their lower price points, but the recession has been biting every consumer so investors shouldn't expect a quick turnaround in sales any time soon. Still, this is the kind of stock that has the potential to solidly build market share and earnings for some time to come.

- Company Web site: www.jarden.com

- Ted Allrich