WOONSOCKET – Infant and toddler product maker Summer Infant Inc. (Nasdaq: SUMR, SUMRW) posted a profit of $1.61 million, a 51.51-percent increase from the year-ago $1.06 million, on net revenue that rose 67.82 percent to $35.57 million.
Earnings per diluted share rose to 11 cents from the 2007 third quarter’s 8 cents per share.
“Despite a tough operating environment, Summer Infant again delivered a solid quarter,” Jason Macari, CEO of Summer Infant Inc. and its “Summer Infant Operating Companies” – Summer Infant (USA) Inc., Summer Infant Europe Ltd. and Summer Infant Asia Ltd. – said in an after-market statement.
“We continued to gain sales momentum across all of our retail channels and core product lines, as well as expand our presence on retailer’s shelves through the addition of new products from the Basic Comfort and Kiddopotamus acquisitions,” Macari said. “In addition, we acquired several product lines from Dolly Inc. in the third quarter that will further expand our soft goods presence at several major retail customers, beginning in the fourth quarter of this year.
“Looking ahead, we are very excited about our 2009 product lineup – unveiled at the September industry trade show – including a new licensing agreement with Carter’s Inc. in our baby gear and infant health categories. These new products are already resonating with our retail partners and are generating incremental shelf space for next year.”
The company posted “organic” revenue growth, excluding its second-quarter acquisitions of Basic Comfort and Kiddopotamus, of about 38 percent. New-product introductions, new customers “and continued growth in the company’s core categories” drove the year-over-year improvement, Summer Infant said.
But the company’s third-quarter gross margin narrowed to 35 percent, from the year-ago 37.6 percent, squeezed by rising costs for goods manufactured in China and higher resin costs for U.S. goods.
For the first nine months of 2008, Summer Infant posted net income of $3.94 million, a 44.71-percent increase from the year-ago $2.72 million, on net revenue that rose 71.77 percent to $97.98 million. Earnings per diluted share rose to 27 cents – or 28 cents excluding about $11.1 million in acquisition-related fees – from the year-ago period’s 21 cents per share.
Yet, “while we are very pleased with our year-to-date financial results,” Macari said, “the challenging macroeconomic environment and uncertainty regarding consumer spending leave us cautious heading into the fourth quarter. … Consistent with trends reported in the broader retail sector, we have seen a slowdown in retail ordering early in the fourth quarter,” he said.
“Despite this recent ordering softness, revenue for the first nine months of 2008 tracked ahead of our expectations,” the CEO added, “and therefore, we now expect to meet or exceed the high end of our previously issued revenue guidance“ of $129 to $130 million for all of 2008.
The company also is projecting full-year earnings of 37 cents to 40 cents per diluted share. But, Summer Infant noted, “this outlook assumes that consumer spending does not significantly decline in the fourth quarter from current levels.”
Summer Infant Inc. (Nasdaq: SUMR, SUMRW) designs and makes audio-video monitors, safety gates, bed rails, infant thermometers, booster and potty seats and other products for toddler and infants. Additional information is available at www.SummerInfant.com.
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