powerpoint presentations22.q4cdn.com/957603896/files/doc_presentations/... · another mom on a...
TRANSCRIPT
June 2017
Certain statements in this presentation that are not historical fact may be deemed “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and Summer intends
that such forward-looking statements be subject to the safe harbor created thereby. Such forward-looking
statements include statements regarding the market position of Summer; the growth prospects of Summer;
anticipated sales and operating results; the development of new products; demand for Summer’s products;
and Summer’s business strategy. Summer cautions that these statements are qualified by important factors
that could cause actual results to differ materially from those reflected by such forward-looking statements.
Such factors include the concentration of Summer’s business with retail customers; the ability of Summer to
compete in its industry; Summer’s dependence on key personnel; Summer’s reliance on foreign suppliers; the
costs associated with pursuing and integrating strategic acquisitions; the costs associated with protecting
intellectual property; and other risks as detailed in Summer’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2016, and subsequent filings with the Securities and Exchange Commission. The
information contained in this presentation is accurate as of the date set forth on the cover page. Summer
assumes no obligation to update the information contained in this presentation.
Safe Harbor
2
Investor Highlights
Leading provider of juvenile products with strong, well-known brands and emerging sub-brands
• Summer - Monitors, Safety, Gear, & Bath
• SwaddleMe - Nursery
• Born Free - Feeding
Positive industry dynamics
• Stabilization of birth rates and 1st child spend are up
• More Millennial parents with higher disposable income
• Baby boomers spending on duplicate equipment for grandparents home
New management
• Enhanced experience across functional areas
• Focus on improving operating performance and continued debt reduction
Expanding revenue potential
• Focus on consumer driven innovation in core categories
• International markets
• Brand protection
Earnings expansion underway
• Streamlined operations
• Exited poorly performing products / licensing arrangements
• Focus on high-margin categories and effective pricing strategies3
Business Overview
Unique Positioning to Meet Moms
Needs
Brand
KeyCategories
Creating a safe, calm feeding experience
Innovative Care & Safety products that provide peace
of mind
The authority on safe sleep
A Portfolio of Strong Brands with Focus on Key Parenting NeedsServing Key Consumer Touch Points in Safety, Safe Sleep, and Feeding
Leveraging Brand Positioning, Breadth of Product Offering & Innovation to Improve Consumer Relationship
Monitors
Gates
Bath & Potty
Strollers
Travel Accessories
Highchairs/Boosters
Swings/Bouncers
Bottles
Pacifiers
Teethers
Feeding
Electronics
Wearable Blankets
Infant Sleep Aids
Bedding
4
Business Overview
Turnaround Progressing
Streamlined, Focused Operations
• Exited non-core, low-margin areas & licensing agreements
• Slashed $4M in annual costs
- G&A expenses down 10% versus 2015
• Reduced inventory to lowest levels in recent history
- Greatly improved quality of inventory
• Restructured credit facilities, saving $1M in cash annually
• Now focused on high-margin, targeted growth markets
• Continue to drive cash flow
• Further reduce debt and de-lever balance sheet
Summer Infant in Strong Position to Accelerate Top Line Expansion
5
Focus on Core Brands & Channel Diversification
Focus on Core Brands
• Reduction or elimination of lower profit licensed and private label products
• Product innovation focus on Summer and SwaddleMe brands and sub brands
• Goal of new product introductions each year representing at least 20% of annual revenue
Customer & Channel Diversification
• Increased focus and growth from e-commerce; now 30% of sales from 23% in 2015
• Future revenue opportunities identified in International, emerging sub brands, and new product introductions
• Working with select large retailers to enhance presence on their websites
• Working to improve mobile and e-commerce capabilities on summerinfant.com
6
All Other12%
Baby Specialty
21%
E-Comm30%
International14%
Mass23%
2016 Sales by Channel
Babies R UsBuyBuyBaby
Walmart (US)Target (US)
Amazon, Diapers.com, all Other US & Int E-Comm
Understanding Millennial Moms
59% bought a product
recommended by another mom on a
parenting site 44% make purchases online via
their smartphone
85% of the time they spend online
is using APPS
9,000 Babies each day are born to our Millennial
Mom
Millennials represent $170
billion in annual purchasing power
Connected:
Texting, pinning, tweeting, status updating; she spends
on average 17.4 hours a week on Social media.
Believe strongly that recommendations by other parents (46%)
and experts (35%) is important
Share Everything/Share Often:
Online and in-person, she talks about her product experiences and solicits feedback from her
peers when planning a purchase.
7*various sources and Company data
Understanding Millennial Moms
Retail Partners
8
9
Worldwide distribution
Toys r Us Dubai
10
Award winning
Products!
Summer Monitors
11
Wide View 2.0
• Large 5” color LCD video display
• Wide view lens technology
• Soft glow night light
• Automatic night vision
• Digital zoom
• Talk back to baby
• Sound lights
• Add up to 4 cameras
• 800ft range
• Adjustable swivel camera
• Table top or wall mountable
Wide view lens allows parent’s to see 4x more of baby’s room
Summer Safety
My Size Pottyo Look and feel of an adult toilet o Helps ensure a comfortable and confident transition
to the real thing.o Toilet handle makes a flushing sound o With built in wipe dispensero Exceeding all expectations o 4.3 stars on Amazon
Waterfall Baby Bathero Soothing waterfall feature circulates water to help
clean and warm babyo Removable bolster to support newborns
12
Summer StrollersIn Industry Top Five in 3 Years
13
3Dtote
• Convenience stroller with large storage
• XXL expandable storage basket
• Diaper bag hooks on handlebars
• Side & back storage pockets
• Cup holder, baby bottle holders, & toy loops
• 1 hand recline
• Large canopy with peek window
• Compact fold with auto-lock & carry strap
• Smooth glide wheels
• Super padded contoured hand grips
• Holds up to 50lbs
SwaddleMe – 4 Stages of Swaddleso SwaddleMe knows that when your baby sleeps better,
you sleep better. Our entire line of sleep products has been expertly designed and tested to keep babies snug, safe, and comfy every night throughout their first year.
SAFER SLEEP. BRIGHTER DAYS.
SwaddleMe Wearable Blanket• Mother & Baby Awards, Best Newborn Sleep Aid – BRONZE 2010• She Knows Parenting Awards 2013• American Baby, BESTS 2013• Mom’s Choice Awards, SILVER 2015
14
Pop Line – Portable On The Go ProductsPop ‘n Jump is the perfect entertainer for parents and babies on the go! It’s compact, light-weight folding frame comes fully assembled and sets up in seconds.
• Pop ‘n Sit Portable Booster makes feeding time easy with a removable, BPA free tray, innovative pop and fold set-up, and over the shoulder carrying bag. Rated 4.8 stars
• Pop ‘n Sit High Chair is perfect for dining on-the-go or even in the patio with your little one. When your baby needs a place to eat, just pop it open.
• Pop’n Play Ultimate Playard allows you to create a safe portable play area for baby.
Consumer Digest Best Buy
15
Awards & Recognition
Multi-Use Extra Tall Walk-Thru Gate
About
• A top pregnancy & parenting resource• Over 2M followers on social media• Babycenter.com receives over 26M unique
monthly visitors (UMV)
BabyCenter
2016 Moms’ Picks Award
Products are voted on by parents as their best-in-class picks for each category.
16
Financials
Gross Margin Growth Year/Year17
April 1, 2017 April 2, 2016
Net sales 47,340$ 49,670$
Cost of goods sold 32,051 33,944
Gross profit 15,289$ 15,726$
General and administrative expenses (1) 9,272 10,753
Selling expense 3,911 3,916
Depreciation and amortization 1,056 1,156
Operating income/(loss) 1,050$ (99)$
Interest expense 724 640
Income/(loss) before taxes 326$ (739)$
Income tax provision/(benefit) 156 (406)
Net income/(loss) 170$ (333)$
Income/(loss) per diluted share 0.01$ (0.02)$
Shares used in fully diluted EPS 18,599,386 18,386,572
(1) Includes s tock based compensation expense
Three Months Ended
Balance Sheet
18
April 1, 2017 December 31, 2016
(unaudited)
Cash and cash equivalents $ 724 $ 999
Trade receivables, net 34,369 34,137
Inventory, net 36,839 36,140
Property and equipment, net 9,811 9,965
Intangible assets, net 14,621 14,813
Other assets 5,288 5,683
Total assets $ 101,652 $ 101,737
Accounts payable $ 28,359 $ 30,684
Accrued expenses 8,724 7,757
Current portion of long-term debt 4,500 4,500
Long term debt, less current portion 42,176 41,206
Other long term liabilities 2,728 2,770
Total l iabilities 86,487 86,917
Total stockholders’ equity 15,165 14,820
Total l iabilities and stockholders’ equity $ 101,652 $ 101,737
Adjusted EBITDA & EPS Reconciliation
19
April 1, 2017 April 2, 2016
Reconciliation of Adjusted EBITDANet income/(loss) (GAAP) 170$ (333)$
Plus: interest expense 724 640
Plus: provision/(benefit) for income taxes 156 (406)
Plus: depreciation and amortization 1,056 1,156
Plus: non-cash stock based compensation expense 85 127
Plus: permitted add-backs 169 1,984
Adjusted EBITDA (Non-GAAP) 2,360$ 3,168$
Reconciliation of Adjusted EPS
Net income/(loss) (GAAP) 170$ (333)$
Plus: permitted add-backs 169 1,984
Tax impact of items impacting comparability (57) (675)
Adjusted Net income/(loss) (Non-GAAP) 282$ 976$
Adjusted Earnings per diluted share (Non-GAAP) 0.02$ 0.05$
Three Months Ended
Investor Highlights• Leading Designer &
Supplier of Juvenile Products
• Strong Well-Known Brands
• Positive Industry Dynamics
• Experienced Management Team
• Focused on Core Strengths: R&D, Leveraging our Brands, and Operational Excellence
• Targeted Growth Strategies in all Product Categories
.
20
Use of Non-GAAP Financial Metrics
This presentation includes certain financial information not derived in accordance with generally accepted
accounting principles (“GAAP”). This presentation includes references to EBITDA, which is defined as income
before interest and taxes plus depreciation, amortization, deal-related fees and non-cash stock option expense.
Summer believes that the presentation of this non-GAAP measure provides information that is useful to
investors as it indicates more clearly the ability of Summer’s assets to generate cash sufficient to pay interest
on its indebtedness, meet capital expenditure and working capital requirements and otherwise meet its
obligations as they become due. This presentation includes references to adjusted EBITDA and adjusted
earnings per diluted share. Adjusted EBITDA is defined as income before interest and taxes plus depreciation,
amortization, non-cash stock option expense and bank permitted add-backs.
Recipients of the presentation and other interested persons are advised to read all reports and other filings
made by Summer with the Securities and Exchange Commission under the Securities Act of 1933, as amended,
and Securities Exchange Act of 1934, as amended, including, but not limited to, Summer’s Annual Report on
Form 10-K for the year ended December 31, 2016. You can obtain a copy of any of these filings, without charge,
by directing a request to Summer Infant, Inc., 1275 Park East Drive, Woonsocket, RI 02895, or on the Internet at
the SEC’s website, www.sec.gov.
21
Thank You
22