WOONSOCKET – Summer Infant Inc. reported a $3.9 million loss in the first quarter, or $1.81 per diluted share, compared with a $260,000 profit a year ago, the company said Tuesday.
Revenue for the juvenile brands company, known as SUMR Brands, in the quarter was $34.4 million, a decline from $36.2 million in the first quarter of 2020.
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“We continued to experience significant supply chain challenges this quarter, as expected, while making some progress with regard to price increases and margin stabilization,” said CEO Stuart Noyes. “Our ability to meet demand was once again hampered by container constraints. additional waves of COVID-19 in China impacted production at certain suppliers and, hence, our ability to receive finished goods.”
Noyes added that while costs have remained an ongoing headwind, the company is responding to the dynamic changes impacting both shipment timing and channel delivery by employing additional resources and enhanced supply chain management techniques.
“While we saw lower revenue across some key categories, there was strength in others, and online sales helped overall product throughput,” Noyes said.
The quarterly report also noted the company remains on track to complete the announced merger with Kids2, Inc., a Georgia manufacturer that owns the well-known Baby Einstein brand, during the second quarter.
In March, Summer Infant and Kids2 announced that the companies had reached an agreement that would have Kids2 pay $12 per share for Summer Infant – at the time about 40% more than what it was trading for on the Nasdaq Stock Market. At that price, the deal is valued at about $25.9 million.
The proposed transaction was approved by Summer Infant’s board of directors and several “significant shareholders,” the company said. Other stockholders must still vote on the transaction, and it’s unclear when that will take place. Several shareholders are suing to stop the company from being acquired by Kids2 Inc..
In a filing with the Securities and Exchange Commission on May 6, Summer Infant disclosed that federal lawsuits have been filed separately in New York and Pennsylvania by three shareholders, alleging that Summer Infant executives omitted information when notifying all company shareholders of the tentative agreement to sell the company to Kids2.
