Summer Infant – Investor Presentation
May 2015
Confidential Information Summer Infant -- Do Not Distribute
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 Highlights
Leading provider of juvenile products with strong, wellknown 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
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
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Business Overview
A Portfolio of Strong Brands with Focus on Key Parenting Needs
Serving Key Consumer Touch Points in Safety, Safe Sleep, and Feeding
Brand
Unique
Positioning
to Meet
Moms Needs
Key
Categories
Innovative Care & Safety
products that provide
peace of mind
Monitors
Gates
Bath & Potty
Strollers
Travel Accessories
Highchairs/Boosters
Swings/Bouncers
The authority on safe sleep
Wearable Blankets
Infant Sleep Aids
Bedding
Creating a safe, calm feeding
experience
Bottles
Pacifiers
Teethers
Feeding
Electronics
Leveraging Brand Positioning, Breadth of Product Offering &
Innovation to Improve Consumer Relationship
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Product Priorities
Nursery
Safety
Expansion
Monitor
Monitors
Feeding
On-the-Go
Demonstrated Strength in New Product Development
Expansion
resulting in year-over-year growth in key areas
Monitors +4%
SwaddleMe +10%
2015 Opportunity
Safety +5%
Gear +51%
WiFi Video
Monitor
Expanded Shelf
Space
Bottle Genius
New Feeding System
Pop ‘N Play
3D Lite Strollers
Social
Engagement
Apps & Software
Content
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Focused Brand Strategy
Innovative New Products
Continue to strengthen
Continue to strengthen
Brand
Unique
Positioning
to Meet
HD Video Monitors
Moms
Needs
Available Now
Focused Growth
Opportunity
Ultimate Pop ‘N Play
Available Now
Keep Me Warm
Available Now
Focused Growth Opportunity
3Dzyre Stroller
Available Now
Focused Growth
Opportunity
Glass Bottles
Bottle Genius
Currently Available
Currently Available
Little Me / SwaddleMe
Co-branded swaddle blankets
Available Mid-2015
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*Dates for availability are subject to change
Focus on Core Brands & Channel Diversification
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
2014 Sales by Channel
Customer & Channel Diversification
All Other 6%
International 16%
Baby Specialty 28%
Canada, EMEA, APLA
•
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
Babies R Us
BuyBuyBaby
(Excludes drop ship)
Mass 21%
Walmart (US)
Target (US)
(Excludes .COM)
E-Commerce 20%
Amazon
Diapers.Com
Zulily
US & INT Retailers
(.COM/Drop Ship)
Discount/Outlet 3%
Specialty 3%
Department Stores 3%
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Understanding Millennial Moms
Millennials
represent $170
billion in annual
purchasing power
85% of the time
they spend
online is using
APPS
9,000 Babies
each day are
born to our
Millennial Mom
Connected:
Texting, pinning, tweeting,
status updating; she
spends on average 17.4
hours a week on Social
media.
Share Everything/
Share Often:
Online and in-person, she
talks about her product
experiences and solicits
feedback from her peers
when planning a purchase.
59% bought a
product
recommended by
another mom on a
parenting site
44% make
purchases online
via their
smartphone
Believe strongly
that recommendations
by other parents (46%)
and experts (35%) is
important
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Expanding Digital Strategy
Video content for use on social, owned website & retailer sites
Email Blast to our Summer
Circle Subscribers
Seeding & support for
Online Reviews
Sweepstakes shared across social media and website
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Turnaround in Progress
2014 Successes
•
•
•
•
•
Focus on Brands
Streamlined product focus
Exited non-core areas & licensing agreements
140 bps higher gross margin year-over-year
32% increase YoY in Adjusted EBITDA
Focus for 2015
•
•
•
•
•
•
Target new markets
Further expand margins
Restructure credit facilities
Drive cash flow
Pay down debt
Leverage G&A structure
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Recent Financials
Core Product Sales Up 12.9% Year-Over-Year
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Balance Sheet
Recently Restructured Debt
Now Focused on Inventory Reduction
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Adjusted EBITDA & EPS Reconciliation
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Senior Leadership Team
Dan Almagor
Executive Chairman
30+ Years Experience
Established turnaround - global leadership
Bob Stebenne
CEO, President and Chief Operating Officer
30+ Years Experience
Adept at increasing business profitability
Bill Mote
Chief Financial Officer
20+ Years Experience
Deep global financial acumen
Ken Price
President of Sales & Marketing
30+ Years Experience
Extensive customer relationships
Tony Paolo
SVP, Quality Assurance
30 Years Experience
Commitment to exceptional quality
Ron Cardone
SVP, Information Technology
30 Years Experience
Pragmatic approach to IT information resources
Mark Strozik
SVP, Human Resources
20+ Years Experience
Strong talent management background
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Investor Highlights
• Experienced & Focused
Management Team
• Leading Designer & Supplier
of Juvenile Products
• Strong Well-Known Brands
• Positive Industry Dynamics
• Focus on Core Strengths: NPD,
Monitors, Safety, Nursery
• Targeted Growth Categories:
Gear, Feeding
• 2015 Year of Stability &
Earnings & Balance sheet
Improvement
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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. The presentation
of this additional information should not be considered in isolation or as a substitute for results
prepared in accordance with GAAP. Summer has included a reconciliation of this information to the
most 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 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, 2014. 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.
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Thank you
Confidential Information Summer Infant – Do Not Distribute
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