Summer Infant, Inc. Announces Debt Reduction and Cost Saving Initiatives
March 27 2009 - 8:30AM
Marketwired
Summer Infant, Inc. ("Summer Infant" or the "Company") (NASDAQ:
SUMR) (NASDAQ: SUMRW) today announced that it has implemented
certain debt reduction and cost saving initiatives designed to
better align its organization and overall cost structure in the
current challenging economic environment.
-- Summer Infant has entered into a sale-leaseback transaction related to
its corporate headquarters. Under the terms of the transaction, the
Company sold its facility to Faith Realty, a company owned by Jason Macari,
CEO and Chairman of Summer Infant, for $4.05 million and subsequently
entered into an agreement to lease the facility under a 7-year term. The
purchase price, which was determined by several independent appraisals of
the property, approximates the net book value of the building on the
Company's books, and therefore will result in an immaterial P&L impact.
The company will be leasing back the building for approximately the same
amount it currently pays in principal and interest payments each month on
its real estate loan. This transaction enables the Company to pay down
outstanding debt and provides greater borrowing flexibility.
Following a comprehensive review of its operations, the
Company's cost reduction activities include:
-- The Company has implemented a workforce reduction of approximately
10%, which is being phased in over the next few months and is expected to
save the company approximately $1.0 million on an annualized basis once
completed.
-- The Company has initiated a plan to consolidate certain warehousing
activities, which will be executed in the fourth quarter of this year.
This is expected to save approximately $1.0 million on an annualized basis
once fully implemented.
"Given the unprecedented economic challenges we are facing, we
continue to take steps to manage our cost structure in this
difficult environment," commented Jason Macari. "While we remain
very confident in our 2009 product lineup and our competitive
position, given the uncertainty in the macroeconomic environment,
we feel it is prudent to adjust our cost structure. We appreciate
the dedication and commitment of all of our employees, thus the
decision to reduce our staff is a very difficult one. We regret
having to take these actions; however, we believe these
cost-cutting measures are necessary, as it is critical that we
position our business to maximize our profitability without
sacrificing the quality of our products or the service we provide
for our customers. In addition, we are very pleased to have
successfully completed the sale-leaseback transaction, which
demonstrates our commitment to paying down debt and improving our
capital structure."
About Summer Infant, Inc.
Based in Woonsocket, Rhode Island, the Company is a designer,
marketer and distributor of branded durable juvenile health, safety
and wellness products (for ages 0-3 years), which are sold
principally to large U.S. retailers. The Company currently sells
proprietary products in a number of different categories, including
nursery audio/video monitors, safety gates, durable bath products,
bed rails, infant thermometers and related nursery, health and
safety products, booster and potty seats, soft goods, bouncers,
travel accessories, highchairs and swings.
Forward-Looking Statements
Certain statements in this release that are not historical fact
may be deemed "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, and the
Company intends that such forward-looking statements be subject to
the safe harbor created thereby. These forward-looking statements
relate to information or assumptions about the acquisitions of
Basic Comfort, Inc. and Kiddopotamus and Company, benefits and
synergies of these transactions, future opportunities for the
combined company and products and any other statements regarding
the future expectations, beliefs, goals or prospects of the
Company. These statements are accompanied by words such as
"anticipate," "expect," "project," "will," "believes," "estimate"
and similar expressions. The Company 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 the Company's
business with retail customers; the ability of the Company to
compete in its industry; the Company's dependence on key personnel;
the Company's reliance on foreign suppliers; the costs associated
with pursuing and integrating strategic acquisitions; and other
risks as detailed in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2008, and subsequent filings
with the Securities and Exchange Commission. The Company assumes no
obligation to update the information contained in this
presentation.
Contact: Joe Driscoll Chief Financial Officer Summer Infant,
Inc. (401) 671-6922 or Devlin Lander Integrated Corporate Relations
(415) 292-6855
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