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. 2 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 3 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 4 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 5 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 6 *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% 7 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 8 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 9 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 10 Recent Financials Core Product Sales Up 12.9% Year-Over-Year 11 Balance Sheet Recently Restructured Debt Now Focused on Inventory Reduction 12 Adjusted EBITDA & EPS Reconciliation 13 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 14 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 15 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. 16 Thank you Confidential Information Summer Infant – Do Not Distribute 17
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