Summer Infant, Inc. Reports Strong Third Quarter 2009 Results

WOONSOCKET, RI, Nov 02 (MARKET WIRE) --
Summer Infant, Inc. (NASDAQ: SUMR)

-- Third quarter 2009 revenue increases 15% year over year to $41.0
million
-- Third quarter 2009 EBITDA increases 17% year over year to $4.4 million
-- Third quarter 2009 earnings per share of $0.13, excluding deal-related
expenses

Summer Infant, Inc. ("Summer Infant" or the "Company") (NASDAQ: SUMR)
today announced financial results for the third quarter and nine months
ended September 30, 2009.

Third Quarter 2009 Results

Net revenues for the third quarter of 2009 were $41.0 million, a 15%
increase from $35.6 million in the third quarter of 2008. This growth was
driven primarily by an expanded product offering at existing customers and
penetration into a larger number of stores within existing customers'
networks. The increase in revenue was also driven by strength in several
key categories, including nursery, bath and monitors.

Gross profit for the third quarter of 2009 was $14.9 million, a 20%
increase compared to $12.5 million in the third quarter of 2008. Gross
margin for the third quarter of 2009 was 36.4%, an increase from 35.0% in
the third quarter of 2008 and from the 35.5% reported in the second
quarter of 2009. Gross margin improved sequentially due to the benefit of
cost reductions that were negotiated during Q1 in addition to lower
commodity prices, lower costs from re-engineered products and the
implementation of alternative sourcing initiatives.

Selling, general and administrative ("SG&A") expenses, excluding
depreciation, amortization, non-cash stock option expense, and
deal-related expenses were $10.5 million for the third quarter of 2009,
compared to $8.7 million for the third quarter of 2008. SG&A as a
percentage of net revenues was 25.7% in the third quarter of 2009, an
increase compared to 24.5% in the third quarter of 2008 and the 25.1%
reported in the second quarter of 2009. SG&A expenses increased year over
year due to higher variable costs from higher revenues, increased
promotional expense as retail customers continued to advertise
significantly during the quarter, and several key new hires.

EBITDA (defined herein as earnings before interest, taxes, depreciation
and amortization, non-cash stock option expense, and deal-related
expenses), was $4.4 million for the third quarter of 2009, a 17% increase
compared to $3.8 million for the third quarter of 2008. EBITDA margin for
the third quarter of 2009 was 10.7% compared to 10.6% for the third
quarter of 2008.

Net income, excluding deal-related fees, for the third quarter of 2009 was
$2.1 million, or $0.13 per share, compared to $1.6 million, or $0.11 per
share, for the third quarter of 2008.

As of September 30, 2009, the Company had approximately $2.7 million of
cash and $37.9 million of debt. The ratio of net debt to EBITDA (as
defined) was approximately 2.5 times as of September 30, 2009. The
majority of the debt matures in June 2011. The Company is in compliance
with all debt covenants and continues to be able to access its credit
lines.

"We had continued strong performance in the third quarter across our
business," commented Jason Macari, Chairman and Chief Executive Officer of
Summer Infant. "We generated solid increases both on a sequential and year
over year basis, generating sales of approximately $41.0 million and
EBITDA of $4.4 million in the third quarter. While we are encouraged by
the recent pickup in sales trends, we continue to closely monitor consumer
spending and point of sales data, as it is still a challenging
environment. We continue to benefit from the major retailers
consolidating vendors and focusing on manufacturers who can provide a
broad product offering. Thus, we remain committed to continually
expanding the number of categories and products in our portfolio in order
to solidify and strengthen our relationships with our key retail
customers. We recently entered the crib category through the acquisition
of Butterfly Living in July 2009, and our retail customers have already
responded favorably to this new product offering. In addition, we
continue to aggressively invest in new product development in order to
increase our market share.

"As expected, our gross margin continued to improve in the third quarter
driven by cost reductions negotiated in the first quarter, the benefit of
lower commodity costs, our recent efforts to refine our product mix, and
the implementation of alternative sourcing strategies," added Mr. Macari.
"We are also very excited about the recent appointments of Denis Horton as
EVP of International Operations and Jeff Hale as Chief Operating Officer
to our senior management team. We believe they will be instrumental in
growing our business to a much higher level."

"Looking ahead, we are very encouraged by ordering rates and POS trends so
far in the fourth quarter despite the tough operating environment,"
continued Mr. Macari. "Nevertheless, the fourth quarter is typically
seasonally slower than the third quarter, as retailers generally allocate
more of their purchasing dollars to seasonal holiday items as opposed to
our product categories. Therefore, we project our fourth quarter sales and
profits to be somewhat lower than the third quarter. We are encouraged by
the product placements we have received for next year; based on retailer
commitments, we expect to significantly increase our shelf space and
generate net revenue in 2010 of at least $170 million."

Nine Months Ended September 30, 2009 Results

For the nine months ended September 30, 2009, net revenues were $114.2
million, an increase of 17% compared to $98.0 million for the first nine
months of 2008. EBITDA (as defined herein above), excluding deal-related
fees, for the nine months ended September 30, 2009 was $10.7 million, or
9.4% of net revenues, compared to the $10.0 million, or 10.3% of net
revenues, during the first nine months of 2008.

Accounting for Interest Rate Swap Agreements

In 2007 and 2008 the Company entered into various interest rate swap
agreements as required under the Bank of America credit agreement. These
interest rate swap agreements provide a hedge against potential increases
in interest rates by locking in a portion of the outstanding debt at a
fixed rate. The fair value of the swaps approximated the stated value from
the inception of the swaps until the fourth quarter of 2008, when the fair
value declined due to the significant dislocation that occurred in the
financial markets. This decline in value was not recorded by the Company
at that time. Consequently, the Company will be restating its fourth
quarter and full year 2008 results to record a liability and a charge to
the income statement of approximately $0.7 million, which reflects the
reduced fair value of the swaps at December 31, 2008 (net of income tax
impact). If the swaps are held to maturity, as required by the credit
agreement, the fair value and the stated value will ultimately equal each
other. Therefore the 2008 expense of $0.7 million is expected to reverse
into income over the next two years. The restatement will reduce
stockholders' equity from $62.2 million to $61.5 million at December 31,
2008. The restatement of 2008 results will have no impact on operating
income or cash flow of the company. The Company is in the process of
revising certain of its prior financial filings.

Conference Call Information

Summer Infant, Inc. will host a conference call today, Monday, November 2,
2009 at 4:30 p.m. Eastern Time, to discuss financial results for its third
quarter and nine months ended September 30, 2009. This call is being
webcast and can be accessed by visiting the Investor section of our
website at www.summerinfant.com. Investors may also listen to the call via
telephone by dialing (480) 629-9714 (confirmation code: 4177499). In
addition, a telephone replay will be available by dialing (303) 590-3030
(confirmation code: 4177499) through November 16, 2009, at 11:59 p.m.
Eastern Time.

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, nursery products, booster and
potty seats, infant bedding, bouncers, travel accessories, highchairs,
swings and nursery furniture.

Use of Non-GAAP Financial Information

This release includes presentations of EBITDA, which is defined herein as
income before interest and taxes plus depreciation, amortization, non-cash
stock option expense, and deal-related expenses. The Company believes that
the presentation of EBITDA provides useful information to investors as it
indicates more clearly the ability of the Company's assets to generate
cash sufficient to pay interest on its indebtedness, meet capital
expenditure and working capital requirements and otherwise meet its
obligations as they become due. EBITDA is commonly used as a measure of
leverage capacity, debt service ability and liquidity. EBITDA is not
considered a measure of financial performance under U.S. generally
accepted accounting principles (GAAP), and the items excluded from EBITDA
are significant components in understanding and assessing our financial
performance. EBITDA should not be considered in isolation or as an
alternative to such GAAP measures as net income, cash flows provided by
or used in operating, investing or financing activities or other
financial statement data presented in our consolidated financial
statements as an indicator of financial performance or liquidity. The
Company provides reconciliations of EBITDA and any other non-GAAP
financial measures in its press releases of historical performance.
However, reconciliation for forward-looking EBITDA projections presented
in this release is not being provided due to the number of variables in
the projected range of EBITDA. The EBITDA range in this release is
calculated in accordance with the Company's past practices. Since EBITDA
is not a measure determined in accordance with GAAP and is susceptible to
varying calculations, EBITDA, as presented, may not be comparable to
other similarly titled measures of other companies.

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 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.

Summer Infant, Inc.
Consolidated Statements of Operations (unaudited)
(amounts in thousands of US dollars, except share and per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Net revenues $ 40,984 $ 35,575 $ 114,194 $ 97,982
Cost of goods sold 26,080 23,109 74,016 63,263
--------- --------- --------- ---------
Gross profit 14,904 12,466 40,178 34,719
Selling, general, and
administrative expenses 10,517 8,706 29,444 24,648
Depreciation and amortization 1,014 741 3,043 1,866
Deal-related fees 215 - 215 214
Non-cash stock option expense 133 90 632 270
Income before interest 3,025 2,929 $ 6,844 7,721
Interest expense 232 506 1,128 1,473
--------- --------- --------- ---------
Income before taxes $ 2,793 $ 2,423 $ 5,716 $ 6,248
Provision for income taxes 838 817 1,715 2,312
--------- --------- --------- ---------
Net income $ 1,955 $ 1,606 $ 4,001 $ 3,936
========= ========= ========= =========

Net Income, excluding deal-related
fees $ 2,106 $ 1,606 $ 4,152 $ 4,071

Earnings per diluted share $ 0.12 $ 0.11 $ 0.26 $ 0.27

Earnings per share, excluding
deal-related fees $ 0.13 $ 0.11 $ 0.27 $ 0.28

Shares used in fully diluted EPS
(in 000's) 16,010 15,056 15,608 14,627

EBITDA Reconciliation:
Income before interest $ 3,025 2,929 $ 6,844 7,721
Plus: depreciation and amortization 1,014 741 3,043 1,866
Plus: deal-related fees 215 - 215 214
Plus: non-cash stock option expense 133 90 632 270
--------- --------- --------- ---------
EBITDA $ 4,387 $ 3,760 $ 10,734 $ 10,071
--------- --------- --------- ---------

Note: Financial results for the nine months ended September 30, 2008 do not
include the full nine month impact of the acquisitions of Basic Comfort,
which closed on March 31, 2008, and Kiddopotamus, which closed on April 18,
2008. If the acquisitions had occured on January 1, 2008, the results for
the first six months of 2008 would have included approximately $5.9 million
and $1.0 million of additional revenue and EBITDA, respectively, from the
acquisitions of Basic Comfort and Kiddopotamus.

Summer Infant, Inc.
Consolidated Balance Sheet
(amounts in thousands of US dollars)

Unaudited
September 30, December 31,
2009 2008 (a)

Cash and cash equivalents $ 2,714 $ 988
Trade receivables 34,758 29,358
Inventory 28,702 30,882
Property and equipment, net 11,294 11,212
Goodwill and other intangibles 60,733 55,582
Other assets 2,226 2,513
------------ ------------
Total assets $ 140,427 $ 130,535
============ ============

Current portion of long-term debt $ 2,307 $ 1,654
Accounts payable, accrued expenses and other
liabilities 35,172 25,141
Long term debt, less current portion 35,578 42,277
------------ ------------
Total liabilities 73,057 69,072

Total stockholders' equity 67,370 61,463
------------ ------------
Total liabilities and stockholders' equity $ 140,427 $ 130,535
============ ============

(a) includes adjustment to prior year audited numbers for fair value
interest rate swap accounting; liabilities have increased by $748 and
stockholders' equity has decreased by $748 as of December 31, 2008 from
previously reported numbers.

Contact:

Joe Driscoll
Chief Financial Officer
Summer Infant, Inc.
(401) 671-6922

or

Devlin Lander
ICR
(415) 419-5606
devlin.lander@icrinc.com

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