March 2017
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, 2016, 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, well- known brands and emerging sub-brands • Summer - Monitors, Safety, Gear, & Bath • SwaddleMe - Nursery • Born Free - Feeding Positive industry dynamics • Stabilization of birth rates and 1 st child spend are up • More Millennial parents with higher disposable income • Baby boomers spending on duplicate equipment for grandparents home New management • Enhanced experience across functional areas • Focus on improving operating performance and continued debt reduction Expanding revenue potential • Focus on consumer driven innovation in core categories • International markets • Brand protection Earnings expansion underway • Streamlined operations • Exited poorly performing products / licensing arrangements 3 • Focus on high-margin categories and effective pricing strategies
Business Overview 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 Innovative Care & Safety Positioning The authority on safe sleep Creating a safe, calm feeding products that provide to Meet experience peace of mind Moms Needs Monitors Gates Bottles Key Wearable Blankets Bath & Potty Pacifiers Categories Infant Sleep Aids Strollers Teethers Bedding Travel Accessories Feeding Highchairs/Boosters Electronics Swings/Bouncers Leveraging Brand Positioning, Breadth of Product Offering & Innovation to Improve Consumer Relationship 4
Turnaround Progressing Streamlined, Focused Operations • Exited non-core, low-margin areas & licensing agreements • Slashed $4M in annual costs - G&A expenses down 10% versus 2015 • Reduced inventory to lowest levels in recent history - Greatly improved quality of inventory • Restructured credit facilities, saving $1M in cash annually • Now focused on high-margin, targeted growth markets • Continue to drive cash flow • Further reduce debt and de-lever balance sheet Summer Infant in Strong Position to Accelerate Top Line Expansion 5
Focus on Core Brands & Channel Diversification Focus on Core Brands • Reduction or elimination of lower profit licensed and private label products • Product innovation focus on Summer and SwaddleMe brands and sub brands • Goal of new product introductions each year representing at least 20% of annual revenue 2016 Sales by Channel Customer & Channel Diversification Mass All Other 23% • Increased focus and growth from e-commerce; 12% Walmart (US) now 30% of sales from 23% in 2015 Target (US) Baby • Future revenue opportunities identified in Specialty 21% International, emerging sub brands, and new product introductions Babies R Us International BuyBuyBaby • Working with select large retailers to enhance 14% presence on their websites E-Comm • Working to improve mobile and e-commerce 30% capabilities on summerinfant.com Amazon, Diapers.com, all Other US & Int E-Comm 6
Understanding Millennial Moms Understanding Millennial Moms Millennials 59% bought a 85% of the time represent $170 product they spend billion in annual recommended by online is using purchasing power another mom on a APPS 44% make parenting site purchases online 9,000 Babies via their each day are smartphone born to our Millennial Mom Connected: Believe strongly Share Everything/ Texting, pinning, tweeting, that recommendations Share Often: status updating; she by other parents (46%) Online and in-person, she spends on average 17.4 and experts (35%) is talks about her product hours a week on Social important experiences and solicits media. feedback from her peers when planning a purchase. *various sources and Company data 7
Retail Partners 8
Worldwide distribution Toys r Us Dubai 9
Award winning Products! 10
Summer Monitors Wide View 2.0 • Large 5” color LCD video display • Wide view lens technology • Soft glow night light • Automatic night vision • Digital zoom • Talk back to baby • Sound lights • Add up to 4 cameras Wide view lens allows parent’s to see 4x more of baby’s room • 800ft range • Adjustable swivel camera • Table top or wall mountable 11
Summer Safety My Size Potty Waterfall Baby Bather Look and feel of an adult toilet Soothing waterfall feature circulates water to o o o Helps ensure a comfortable and confident help clean and warm baby transition to the real thing. Removable bolster to support newborns o Toilet handle makes a flushing sound o With built in wipe dispenser o Exceeding all expectations o o 4.3 stars on Amazon 12
Summer Strollers In Industry Top Five in 3 Years 3Dtote • Convenience stroller with large storage • XXL expandable storage basket • Diaper bag hooks on handlebars • Side & back storage pockets • Cup holder, baby bottle holders, & toy loops • 1 hand recline • Large canopy with peek window • Compact fold with auto-lock & carry strap • Smooth glide wheels • Super padded contoured hand grips • Holds up to 50lbs 13
SwaddleMe – 4 Stages of Swaddles SwaddleMe knows that when your baby sleeps o better, you sleep better. Our entire line of sleep products has been expertly designed and tested to keep babies snug, safe, and comfy every night throughout their first year. SAFER SLEEP. BRIGHTER DAYS . SwaddleMe Wearable Blanket • Mother & Baby Awards, Best Newborn Sleep Aid – BRONZE 2010 • She Knows Parenting Awards 2013 • American Baby, BESTS 2013 • Mom’s Choice Awards, SILVER 2015 14
Pop Line – Portable On The Go Products Pop ‘n Jump is the perfect entertainer for parents and babies on the go! It’s compact, light-weight folding frame comes fully assembled and sets up in seconds. • Pop ‘n Sit Portable Booster makes feeding time easy with a removable, BPA free tray, innovative pop and fold set-up, and over the shoulder carrying bag. Rated 4.8 stars • Pop ‘n Sit High Chair is perfect for dining on-the-go or even in the patio with your little one. When your baby needs a place to eat, just pop it open. • Pop’n Play Ultimate Playard allows you to create a safe portable play area for baby. Consumer Digest Best Buy 15
Financials Three Months Ended Twelve Months Ended December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016 Net sales $ 45,531 $ 50,779 $ 194,328 $ 205,804 Cost of goods sold 31,233 35,180 132,577 143,854 Gross profit $ 14,298 $ 15,599 $ 61,751 $ 61,950 General and administrative expenses (1) 10,823 10,897 41,292 46,132 Selling expense 3,785 4,485 15,269 17,780 Depreciation and amortization 1,568 2,853 5,011 6,780 Impairment of intangible assets 2,993 - 2,993 - Operating loss $ (4,871) $ (2,636) $ (2,814) $ (8,742) Interest expense 781 580 2,682 3,333 Loss before taxes $ (5,652) $ (3,216) $ (5,496) $ (12,075) Income tax expense benefit (1,174) (111) (1,174) (3,424) Net loss $ (4,478) $ (3,105) $ (4,322) $ (8,651) Loss per diluted share $ (0.24) $ (0.17) $ (0.23) $ (0.47) Shares used in fully diluted EPS 18,488,342 18,351,914 18,440,436 18,267,596 (1) Includes stock based compensation expense Gross Margin Growth Year/Year 16
Balance Sheet December 31, 2016 January 2, 2016 Cash and cash equivalents $ 999 $ 923 Trade receivables, net 34,137 40,514 Inventory, net 36,140 36,846 Property and equipment, net 9,965 12,007 Intangible assets, net 14,813 18,512 Other assets 5,683 4,336 Total assets $ 101,737 $ 113,138 Accounts payable $ 30,684 $ 29,541 Accrued expenses 7,757 9,584 Current portion of long-term debt 4,500 3,318 Long term debt, less current portion (1) 41,206 48,767 Other long term liabilities 2,770 2,962 Total liabilities 86,917 94,172 Total stockholders’ equity 14,820 18,966 Total liabilities and stockholders’ equity $ 101,737 $ 113,138 17
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