Summer Infant Enters Into Amended Credit Agreement
20 October 2017 - 11:00PM
Summer Infant, Inc. ("Summer Infant" or the "Company")
(NASDAQ:SUMR), a global leader in premium juvenile products, today
announced that the Company has amended its existing credit facility
to provide near-term financial flexibility as a result of the
bankruptcy filing by Toys “R” Us, Inc. (“TRU”) on September 18,
2017. As part of the amendment, Summer Infant’s lenders waived any
loan violations that may have occurred due to “overadvances” made
after TRU receivables were no longer deemed “eligible accounts” for
purposes of the revolver borrowing base, reflecting the bankruptcy
filing. The amendment also includes certain provisions to provide
additional flexibility to the Company in light of the TRU
insolvency proceedings, including permitting post-bankruptcy-filing
TRU receivables to qualify as eligible accounts, as is further
detailed in the Company's Current Report on Form 8-K being filed
today with the SEC.
The bankruptcy of TRU negatively impacted net
revenue of Summer Infant by approximately $2.3 million during the
third quarter, primarily related to delayed shipments to Babies “R”
Us. In addition, the Company expects to record a charge in the
third quarter of approximately $2.1 million as an allowance for bad
debt related to pre-bankruptcy petition accounts receivable from
TRU.
Mark Messner, Chief Executive Officer,
commented, "We have analyzed our near term exposure to Babies “R”
Us and believe it prudent to reserve an allowance for doubtful
accounts given the time it may take for the bankruptcy to run its
course. Going forward, we are taking the appropriate steps to serve
this customer, actively manage our inventory, and roll out new
products in the fourth quarter. We’re pleased that, once again, we
were supported by all institutions participating in our credit
agreement with regard to the amendment to provide near-term
financial flexibility.”
The estimated impact of the TRU bankruptcy on
the Company’s third quarter results is based on management’s
preliminary financial analysis. The unaudited consolidated
condensed financial statements for the three and nine months ended
September 30, 2017 are not yet available and subject to
adjustments. These preliminary estimates may differ materially from
the actual results that will be reflected in the Company’s
unaudited consolidated condensed financial statements for the three
and nine months ended September 30, 2017 when completed.
About Summer Infant, Inc.Based
in Woonsocket, Rhode Island, the Company is a global leader of
premium juvenile products for ages 0-3 years which are sold
principally to large North American and international 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, nursery products,
strollers, booster and potty seats, swaddling blankets, bouncers,
travel accessories, highchairs, swings, and infant feeding
products. For more information about the Company, please visit
www.summerinfant.com.
Forward-Looking
StatementsCertain statements in this release may be deemed
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and the Company intends that such
forward-looking statements be subject to the safe harbor created
thereby. These statements concern management's current
assumptions, estimates, beliefs, and expectations and anticipated
events or trends and similar expressions concerning matters that
are not historical facts These statements are accompanied by
words such as “anticipate,” “expect,” “project,” “will,”
“believes,” “estimate” and similar expressions, and include
statements regarding the impact of the TRU bankruptcy on the
Company’s third quarter results. 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
ability to continue to control costs and expenses, including legal
expenses; the Company’s dependence on key personnel; the Company’s
reliance on foreign suppliers; the Company’s ability to develop,
market and launch new products; the Company’s ability to grow sales
with existing and new customers and in new channels; the Company’s
ability to meet required financial covenants under its loan
agreements; and other risks as detailed in the Company’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 Company assumes no obligation to update the
information contained in this release.
Company Contact:Chris WittyInvestor
Relations646-438-9385cwitty@darrowir.com
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