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By PBN Staff
WOONSOCKET – Juvenile health, safety and wellness product maker Summer Infant Inc. posted a net loss of $65.4 million, or $3.65 per diluted share, for the three months ended Sept. 30, compared with a $2.1 million, or 11 cents per diluted share, gain during the same period in 2011.
During the quarter, the company’s revenue grew 1 percent to $63.98 million compared with $63.34 million during the 2011 third quarter.
“Our net revenue grew slightly year over year, despite the sluggish economy, weak retail environment and low birth rate trend. Furniture, nursery and play product sales were strong during the quarter, while we experienced softer sales of our gear products,” Jason Macari, Summer Infant chairman and CEO, said in a statement.
“Although our third-quarter bottom-line performance was disappointing, we are beginning to realize the benefits of the cost-reduction initiatives we implemented at the end of the second quarter,” said Macari, adding: “General and administrative expenses in the third quarter were lower compared with the prior-year quarter, and we are taking additional actions to decrease SG&A costs and improve margins.”
According to a release, the company’s profit drop was due to a goodwill and intangible asset impairment charge of $70.2 million. The charge was taken after a decline in market capitalization triggered an interim impairment analysis of goodwill, intangible and long-lived assets.
Based on a valuation study conducted after the triggering event, Summer Infant recognized an estimated goodwill write off of $61.9 million during the quarter as well as a charge based in impaired intangible assets of $8.3 million.
“Looking ahead, we expect improved bottom-line results in the fourth quarter and into 2013 as we realize savings from our cost-reduction initiatives, including our efforts to control promotional and advertising dollars,” said Macari. “We continue to believe in the key strategic drivers of our business, which include innovation, global expansion, brand building and operational excellence.”
“We made good progress in each of these areas in the third quarter and expect to build on that foundation as we grow a more profitable business,” he added.
For the first nine months of 2012, Summer Infant reported a net loss of $64.53 million, or $3.61 per diluted share, versus earnings of $4.2 million, or 23 cents per diluted share, during the same period in 2011.
Year-to-date, the company’s revenue rose 3.2 percent to $188.7 million, versus a reported revenue of $182.8 million for the first nine months of 2011.