Fast-growing sales helped Summer Infant Inc., Rhode Island’s newest public company, boost its pro forma net income by 90 percent in the third quarter to $1.06 million for the “Summer Operating Companies,” up from $558,000 a year earlier.
Earnings per diluted share grew to 8 cents from the 2006 third quarter’s 5 cents per share.
Using the Summer Operating Companies – Summer Infant (USA) Inc., Summer Infant Europe Ltd. and Summer Infant Asia Ltd. – as the basis for its initial third-quarter financial report allows it to compare more clearly the results for its major operating units before the March 6 merger with KBL Healthcare Acquisition Corp. II, the parent company said. Summer Infant said it would release full-company results in its upcoming SEC 10-Q filing.
“We are very pleased to report solid performance for the first nine months and remain on track to hit our year-end guidance,” said Jason Macari, CEO of Summer Infant Inc. and its operating companies, in a news release.
The company has grown rapidly since 2001, when it had about $1 million in sales, and it’s now projecting $75 million in annual sales.
At the retail level, Summer products – which include video monitors, safety gates, bath items and other baby-oriented products – have been selling much more rapidly, the company said, helped by increased placements.
“The No. 1 thing that’s happening is our sales have gone up dramatically over the last year,” chief financial officer Joe Driscoll said.
In addition, the company said, operating costs have been held down, keeping Summer Infant profitable even as it invests in its own growth. At this point, the company has 81 employees.
Most of Summer Infant’s business is conducted out of the U.S. office, with only 10 percent of sales in Europe. In Asia, the company’s employees are focused on research and design. Summer farms its manufacturing out through contracts.
Net revenue for the first nine months of 2007 – $57.04 million – represents a 43.3-percent increase over the same period in 2006, the company said, while net income is up 72.9 percent to $2.72 million. That increase, along with “customer commitments to date and updated sales data,” has led the company to forecast a banner year.
The quarter ending Sept. 30 is another step for a company that has continually increased in value since Macari bought it in 2001.
“He really re-energized the business,” Driscoll said.
During the past six years, the company has seen annual top-line growth of about 50 percent each year, but gains for the third quarter were more than expected, Driscoll said.
“This is a big one. This is the most significant quarterly increase we’ve seen in quite some time,” Driscoll said. “We really have a great amount of momentum right now. Consumers really are buying a lot of our products.”
Although 2008 forecast likely won’t be ready for another month, Driscoll said the company is thinking positively for the future.
“We’re hopeful to continue growing the top line and the bottom line by pretty substantial numbers,” he said. “So as soon as we have those numbers out we’re going to share our formal forecast with the world. We’re very positive about the future.”
For Driscoll, Macari and others, the success of Summer Infant isn’t the first time they’ve increased a company’s worth – the same leadership team worked together at Safety 1st , Driscoll said.
During the 1990s, Macari owned that Canton, Mass.-based juvenile-product company, building it up to be a success and eventually selling it to Canadian-based Dorel Juvenile Group in 2000. “Jason has reassembled a lot of the people from Safety 1st, so hopefully we can do it again,” Driscoll said. •
