Sumr investor presentation march 2015

Confidential Information Summer Infant -- Do Not Distribute

Summer Infant – Investor PresentationMarch 2015

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, 2014, 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

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, 2014, 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.

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Investor HighlightsLeading provider of juvenile products with strong, well-known brands• Summer - Monitors, Safety, Gear, & Bath• SwaddleMe - Nursery• Born Free - Feeding

Positive industry dynamics

• Increasing birth rates• More Millennial parents with higher disposable income

New management

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New management

• Enhanced experience across functional areas• Focus on improving operating performance, and reducing debt

Expanding revenue potential

• Focus on consumer driven innovation in core categories• Expanding e-commerce opportunities• International markets and specialty retail

Earnings expansion underway

• Streamlined operations• Exiting poorly performing products / licensing arrangements• Focus on high-margin categories and effective pricing strategies

Business Overview

UniquePositioning

to MeetMoms Needs

Brand

Creating a safe, calm feedingexperience

Innovative Care & Safetyproducts that provide

peace of mindThe 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

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UniquePositioning

to MeetMoms Needs

KeyCategories

Innovative Care & Safetyproducts that provide

peace of mind

Leveraging Brand Positioning, Breadth of Product Offering &Innovation to Improve Consumer Relationship

MonitorsGates

Bath & PottyStrollers

Travel AccessoriesHighchairs/Boosters

Swings/Bouncers

BottlesPacifiersTeethersFeeding

Electronics

Wearable BlanketsInfant Sleep Aids

Bedding

Product Priorities

Monitors Expansion

Expansion

Monitor

Nursery

Feeding

Safety

On-the-Go

Demonstrated Strength in New Product Developmentresulting in year-over-year growth in key areas

SocialEngagement

Content

Apps & Software

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Monitors +4%WiFi Video

Monitor

SwaddleMe +10%Expanded Shelf

Space

Safety +5%Pop ‘N Play

Gear +51%3D Lite Strollers

2015 Opportunity

Bottle GeniusNew Feeding System

Focused Brand StrategyInnovative New Products

UniquePositioning

to MeetMoms Needs

Brand

Continue to strengthen Continue to strengthen

Focused GrowthOpportunity

HD Video Monitors

Available Now

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UniquePositioning

to MeetMoms Needs

Focused GrowthOpportunity

Little Me / SwaddleMeCo-branded swaddle blankets

Available Mid-2015*Dates for availability are subject to change

Glass Bottles

Currently AvailableBottle Genius

Currently Available

Ultimate Pop ‘N Play

Available Now

HD Video Monitors

Available Now

Keep Me Warm

Available Now

Focused Growth Opportunity

3Dzyre Stroller

Available Now

Focus on Core Brands• Reduction in lower profit licensed brands• 2014 revenue from Summer owned brands

increased 8.75%• Product innovation focus on Summer,

SwaddleMe and Born Free brands• New product introductions each year

represent at least 20% of annual revenue

Focus on Core Brands & Channel Diversification

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Baby Specialty 28%

E-Commerce 20%

Specialty 3%Department Stores 3%

Discount/Outlet 3%

Mass 21%

International 16%

All Other 6%

2014 Sales by Channel

Babies R UsBuyBuyBaby

(Excludes drop ship)

Canada, EMEA, APLA

Walmart (US)Target (US)

(Excludes .COM)Amazon

Diapers.ComZulily

US & INT Retailers(.COM/Drop Ship)

Customer & Channel Diversification• Top 7 customer; 74% 2014 vs. 78% 2013• Increased focus and growth from e-commerce;

up 40% year-over-year• Future revenue opportunities identified in

International, Specialty & Department Stores• Working with select large retailers to enhance

our presence on their websites• Working to improve mobile and e-commerce

capabilities on summerinfant.com

Understanding Millennial Moms

59% bought aproduct

recommended byanother mom on a

parenting site 44% makepurchases online

via theirsmartphone

85% of the timethey spend

online is usingAPPS

9,000 Babieseach day are

born to ourMillennial Mom

Millennialsrepresent $170

billion in annualpurchasing power

CON

FID

ENTI

AL IN

FORM

ATIO

N

Connected:Texting, pinning, tweeting,

status updating; shespends on average 17.4hours a week on Social

media.

Believe stronglythat recommendationsby other parents (46%)and experts (35%) is

important

Share Everything/Share Often:

Online and in-person, shetalks about her productexperiences and solicitsfeedback from her peers

when planning a purchase.

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Expanding Digital Strategy

Video content for use on social, owned website & retailer sites

Email Blast to our SummerCircle Subscribers

Sweepstakes shared across social media and website

Seeding & support forOnline Reviews

Turnaround in Progress

• New management

• Streamlined product focus

• Exited non-core areas & licensing agreements

• 140 bps higher gross margin year-over-year

• 32% increase YoY in Adjusted EBITDA

2014 Successes

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• Target new markets

• Further expand margins

• Restructure credit facilities

• Drive cash flow

• Pay down debt

• Leverage G&A structure

Focus for 2015

Historical Financials

January 3, 2015 December 31, 2013 January 3, 2015 December 31, 2013

(unaudited) (unaudited)

Net sales $ 50,969 $ 44,738 $ 205,359 $ 208,173

Cost of goods sold 34,521 30,307 138,418 143,166

Gross profit 16,448 14,431 66,941 65,007

General & administrative expenses(1) 10,770 9,826 40,273 38,022Selling expense 4,695 4,785 18,437 20,839

Depreciation and amortization 1,416 1,364 5,548 6,280

Operating (loss)/income (433) (1,544) 2,683 (134)

Interest expense 884 871 3,455 3,999

Loss before taxes $ (1,317) $ (2,415) $ (772) $ (4,133)

(Benefit) for income taxes (706) (737) (527) (1,318)

Net loss $ (611) $ (1,678) $ (245) $ (2,815)

Loss per diluted share $ (0.03) $ (0.09) $ (0.01) $ (0.16)

Shares used in fully diluted EPS 18,141,738 17,979,480 18,060,799 17,929,734

For the fiscal year endedFor the 3 Months Ending



Net sales $ 50,969 $ 44,738 $ 205,359 $ 208,173

Cost of goods sold 34,521 30,307 138,418 143,166

Gross profit 16,448 14,431 66,941 65,007

General & administrative expenses(1) 10,770 9,826 40,273 38,022Selling expense 4,695 4,785 18,437 20,839

Depreciation and amortization 1,416 1,364 5,548 6,280

Operating (loss)/income (433) (1,544) 2,683 (134)

Interest expense 884 871 3,455 3,999

Loss before taxes $ (1,317) $ (2,415) $ (772) $ (4,133)

(Benefit) for income taxes (706) (737) (527) (1,318)

Net loss $ (611) $ (1,678) $ (245) $ (2,815)

Loss per diluted share $ (0.03) $ (0.09) $ (0.01) $ (0.16)

Shares used in fully diluted EPS 18,141,738 17,979,480 18,060,799 17,929,734


Q4 revenue up 14% vs. Q4 2013.

Full year, excluding discontinued licensed products revenue, was up 5.3% in 2014 vs. 2013

Significantly reduced operating loss YoY

Margin up 140 bps YoY

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Balance Sheet

January 3, 2015 December 31, 2013

Cash and cash equivalents $ 1,272 $ 1,573Trade receivables, net 38,794 34,574Inventory, net 44,010 38,378Property and equipment, net 13,080 14,796Other intangibles, net 20,679 21,575Other assets 4,632 4,471 Total assets $ 122,467 $ 115,367

Accounts payable $ 21,878 $ 22,072Accrued expenses 8,628 9,658Current portion of long-term debt 1,641 1,962Long term debt, less current portion 57,097 47,756Other long term liabilities 2,994 3,289Deferred tax liabilities 2,378 3,140 Total liabilities 94,616 87,877

Total stockholders’ equity 27,851 27,490Total liabilities and stockholders’ equity $ 122,467 $ 115,367

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January 3, 2015 December 31, 2013

Cash and cash equivalents $ 1,272 $ 1,573Trade receivables, net 38,794 34,574Inventory, net 44,010 38,378Property and equipment, net 13,080 14,796Other intangibles, net 20,679 21,575Other assets 4,632 4,471 Total assets $ 122,467 $ 115,367

Accounts payable $ 21,878 $ 22,072Accrued expenses 8,628 9,658Current portion of long-term debt 1,641 1,962Long term debt, less current portion 57,097 47,756Other long term liabilities 2,994 3,289Deferred tax liabilities 2,378 3,140 Total liabilities 94,616 87,877

Total stockholders’ equity 27,851 27,490Total liabilities and stockholders’ equity $ 122,467 $ 115,367

Inventory up 15% YoY down sequentially QoQ by 9.7%AR increase due to 14% higher sales vs. prior year 4Q

Both contributing factors to higher YE debt level

EBITDA Reconciliation



Reconciliation of Non-GAAP EBITDA

Net loss $ (611) $ (1,678) $ (245) $ (2,815)

Plus: interest expense 884 871 3,455 3,999

Plus: benefit for income taxes (706) (737) (527) (1,318)

Plus: depreciation and amortization 1,416 1,364 5,548 6,280

Plus: non-cash stock based stock compensation expense 209 164 1,220 893

Plus: permitted add-backs (2) 838 951 3,294 2,637

Adjusted EBITDA $ 2,030 $ 935 $ 12,745 $ 9,676


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Reconciliation of Non-GAAP EBITDA

Net loss $ (611) $ (1,678) $ (245) $ (2,815)

Plus: interest expense 884 871 3,455 3,999

Plus: benefit for income taxes (706) (737) (527) (1,318)

Plus: depreciation and amortization 1,416 1,364 5,548 6,280

Plus: non-cash stock based stock compensation expense 209 164 1,220 893


Adjusted EBITDA $ 2,030 $ 935 $ 12,745 $ 9,676


Not included in the Adjusted EBITDA calculation is $1.1 million of costs associated with the recall announced in 2014.

Adjusted EPS Reconciliation



Reconciliation of Adjusted EPS

Net loss $ (611) $ (1,678) $ (245) $ (2,815)


Plus: unamortized deferred financing costs(4) - - - 230

Plus: loss on certain close-out sales in January & February - - - 99

Adjusted Net (loss)/income $ (132) $ (1,030) $ 1,639 $ (690)

Adjusted earning per diluted share $ (0.01) $ (0.06) $ 0.09 $ (0.04)


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Reconciliation of Adjusted EPS

Net loss $ (611) $ (1,678) $ (245) $ (2,815)


Plus: unamortized deferred financing costs(4) - - - 230

Plus: loss on certain close-out sales in January & February - - - 99

Adjusted Net (loss)/income $ (132) $ (1,030) $ 1,639 $ (690)

Adjusted earning per diluted share $ (0.01) $ (0.06) $ 0.09 $ (0.04)


Senior Leadership Team

Carol Bramson 25+ Years ExperienceChief Executive Officer Strategic vision and management experience

Bob Stebenne 30+ Years ExperiencePresident and Chief Operating Officer Adept at increasing business profitability

Ken Price 30+ Years ExperiencePresident of Sales & Marketing Extensive customer relationships

Bill Mote 20+ Years ExperienceChief Financial Officer Deep global financial acumen

Anna Dooley 25+ Years ExperienceSVP, Product Development Consumer driven innovation

Tony Paolo 30 Years ExperienceSVP, Quality Assurance Commitment to exceptional quality

Ron Cardone 30 Years ExperienceSVP, Information Technology Pragmatic approach to IT information resources

Mark Strozik 20+ Years ExperienceSVP, Human Resources Strong talent management background

Carol Bramson 25+ Years ExperienceChief Executive Officer Strategic vision and management experience

Bob Stebenne 30+ Years ExperiencePresident and Chief Operating Officer Adept at increasing business profitability

Ken Price 30+ Years ExperiencePresident of Sales & Marketing Extensive customer relationships

Bill Mote 20+ Years ExperienceChief Financial Officer Deep global financial acumen

Anna Dooley 25+ Years ExperienceSVP, Product Development Consumer driven innovation

Tony Paolo 30 Years ExperienceSVP, Quality Assurance Commitment to exceptional quality

Ron Cardone 30 Years ExperienceSVP, Information Technology Pragmatic approach to IT information resources

Mark Strozik 20+ Years ExperienceSVP, Human Resources Strong talent management background

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• New ExperiencedManagement Team

• Leading Designer & Supplierof Juvenile Products

• Strong Well-Known Brands

• Positive Industry Dynamics

• Focus on Core Strengths:Monitors, Safety, Nursery

• Targeted Growth Categories:Gear, Feeding

• 2015 Year of Stability &Earnings Improvement

Investor Highlights

• New ExperiencedManagement Team

• Leading Designer & Supplierof Juvenile Products

• Strong Well-Known Brands

• Positive Industry Dynamics

• Focus on Core Strengths:Monitors, Safety, Nursery

• Targeted Growth Categories:Gear, Feeding

• 2015 Year of Stability &Earnings Improvement

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This presentation includes certain financial information not derived in accordance with generallyaccepted accounting principles (“GAAP”). This presentation includes references to EBITDA, which isdefined as income before interest and taxes plus depreciation, amortization, deal-related fees andnon-cash stock option expense. Summer believes that the presentation of this non-GAAP measureprovides information that is useful to investors as it indicates more clearly the ability of Summer’sassets to generate cash sufficient to pay interest on its indebtedness, meet capital expenditure andworking capital requirements and otherwise meet its obligations as they become due. The presentationof this additional information should not be considered in isolation or as a substitute for resultsprepared in accordance with GAAP. Summer has included a reconciliation of this information to themost comparable GAAP measures in its filings with the Securities and Exchange Commission.

Recipients of the presentation and other interested persons are advised to read all reports and otherfilings made by Summer with the Securities and Exchange Commission under the Securities Act of1933, 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, 2014. You can obtain a copyof any of these filings, without charge, by directing a request to Summer Infant, Inc., 1275 Park EastDrive, Woonsocket, RI 02895, or on the Internet at the SEC’s website, www.sec.gov.

Use of Non-GAAP Financial MetricsThis presentation includes certain financial information not derived in accordance with generallyaccepted accounting principles (“GAAP”). This presentation includes references to EBITDA, which isdefined as income before interest and taxes plus depreciation, amortization, deal-related fees andnon-cash stock option expense. Summer believes that the presentation of this non-GAAP measureprovides information that is useful to investors as it indicates more clearly the ability of Summer’sassets to generate cash sufficient to pay interest on its indebtedness, meet capital expenditure andworking capital requirements and otherwise meet its obligations as they become due. The presentationof this additional information should not be considered in isolation or as a substitute for resultsprepared in accordance with GAAP. Summer has included a reconciliation of this information to themost comparable GAAP measures in its filings with the Securities and Exchange Commission.

Recipients of the presentation and other interested persons are advised to read all reports and otherfilings made by Summer with the Securities and Exchange Commission under the Securities Act of1933, 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, 2014. You can obtain a copyof any of these filings, without charge, by directing a request to Summer Infant, Inc., 1275 Park EastDrive, Woonsocket, RI 02895, or on the Internet at the SEC’s website, www.sec.gov.

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Thank youConfidential Information Summer Infant – Do Not Distribute

Sumr investor presentation march 2015

Economy & Finance

Transcript of Sumr investor presentation march 2015