Summer Infant reverses loss in 3Q

SUMMER INFANT reported $233,000 in profit, or 1 cent per diluted share, in the third quarter, reversing a loss of $1.8 million, or 10 cents per share, in the same prior-year period.
SUMMER INFANT reported $233,000 in profit, or 1 cent per diluted share, in the third quarter, reversing a loss of $1.8 million, or 10 cents per share, in the same prior-year period.

WOONSOCKET – Summer Infant Inc. reported $233,000 in profit, or 1 cent per diluted share, in the third quarter, reversing a loss of $1.8 million, or 10 cents per share, in the prior-year period, the baby and juvenile-product maker reported this week.
The company posted a 3.3 percent decline in revenue for the period that ended Oct. 1 to $48.6 million from $50.2 million in the third quarter of 2015. Excluding $1.7 million in sales related to Summer Infant’s bank-approved inventory reduction plan and furniture exit last year, revenue was “relatively flat” over the year, the company said in its earnings release.
“Summer Infant’s third quarter played out largely as expected, with strong underlying operating performance – including earnings of $0.01 per share – even as revenue was flat year over year,” Mark Messner, president and CEO, said in a statement. “Our balance sheet is in the best shape we’ve seen in many quarters, and the company is well positioned for improved bottom line results going forward.”
He said the company is working on initiatives to “better utilize our intellectual property to drive further brand recognition and channel development.”
As a result, certain products, such as RF monitors, are being overhauled to become more appealing to customers and available at a variety of prices. He said they are also working with retailers on promotional strategies to lessen reliance on third-party wholesalers.

“The steps we are taking today, we believe, will set the stage for higher growth, margin expansion and increased brand loyalty in 2017 and beyond,” Messner said.
The release said general and administrative expenses were $9.7 million compared with $13 million last year, a 25 percent decline, and legal expenses fell to $100,000 compared with $3.7 million in the 2015 third quarter.
Legal costs stem from a lawsuit filed in spring 2015, when Summer Infant sued former CEO Carol Bramson; Annamaria Dooley, former senior vice president of product development; Kenneth N. Price, former president of global sales; as well as Carson J. Darling, Dulcie M. Madden, and Bruce Work in federal court. Summer Infant claimed they were trying to create a competing company. A confidential settlement with Darling and Madden, who were former consultants to the company, was reached last year.

According to a filing with the U.S. Securities and Exchange Commission, on Aug. 5, a stipulation was filed whereby Dooley agreed to dismiss certain of her counterclaims against the company and Dan Almagor, chairman of the company’s Board of Directors.
“In an effort to resolve this matter, the company and the remaining defendants have agreed to participate in non-binding mediation, which is ongoing, and the litigation is stayed pending the outcome of the mediation. The company has incurred significant expenses related to this lawsuit to date and may continue to incur expenses related to this lawsuit,” the filing said.
In addition, the company said it received reimbursement of $598 as of Oct. 1 from its insurers for a portion of its defense costs and defense costs of certain defendants.
“The company cannot predict the outcome of this lawsuit or for how long it will remain active,” the filing stated.

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