Summer Infant (SUMR) 17 Mar 212020 Q4 Earnings call transcript

Good day and welcome to the SUMR Brands Fiscal Year 2020 Fourth Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Chris Witty, would like to to over conference the Investor turn I Relations Advisor. Please go ahead.

These and to outlook differ statements me various refer This include relate today other Exchange to provide filings and Hello conference call Ed Schwartz. these XX-Q forward-looking Stuart Form contained subject are risks Securities may welcome the on brief for its Commission. now the results with XXXX Please CFO, SUMR beyond. Brands’ Report to factors XX-K, and like would fourth uncertainties to Noyes; Form call. and actual With that and cause the quarterly Safe in in on and that Annual forward-looking on and the to is call a statements. materially our XXXX could statements I the the Brands' company's CEO, SUMR risk events company's quarter Harbor Statement. to from report

During may make These adjusted understanding in operations. adjusted financial income, a to the believes investors call, net measures, gain SUMR earnings share. non-GAAP are changes help metrics meaningful management the EBITDA, and company per of adjusted which Brands' references

Noyes. please measures, like to company's turn reconciliation measures the included And that, I'd For financial evening. Stuart? with Stuart on non-GAAP in release results the to more information over financial tables a the GAAP for see of non-GAAP issued to yesterday call

through good results today. after overview detail. and developments our morning appreciate of joining call an go I'll Ed in Chris Thanks providing conference We financial will which fourth by you our everyone. start quarter recent

top to the we fiscal approach end results several As challenges we saw as quarter disclosed impacting line our XXXX. of ability last grow we

a market. delayed in associated situation to these supply among re-opening of chain than international businesses. to our mid-tier mortar exacerbated us hampered issues customers anticipated the constraints and in brick COVID-XX of was by getting leading product slower resurgence recovery and that the This logistics Foremost of were

addition sales in in was will XXXX's moment review charges the variance year-over-year That challenging top-line this it fact said than significant to a included the quarter recorded closeout was suffice but our extraordinary which the further coming with that Such the revenue this in in case that In resulted adjusted some coupled year. say reflects not headwinds fourth quarter lower. in more a year had the Ed XXXX. EBITDA quarter expected. good past company

organization. higher higher were of We when work with quarter have saw throughout under SG&A we and for due to pleased are than million weathered was things well gross this last margins and just all dramatically in the levels responsiveness ended and considered to a significantly year substantial this year We the cut as and sheet did XXXX hard year-over-year leaner, the in the this interest in strengthening from storm dedication we reduction tariff even adjusted these our financial reduced resulted mix. balance have to place in midst retroactive organization an overall of become streamlined overall We've pandemic. testimony past strategies our The put months in exclusions to an also improved a XX margins customer flexibility. as quarter. And $XX associates expenses. Fourth product improving expense debt the the debt, tandem, and notably in our

lower due overall of consistent demand lagging constraints and a consumer COVID-XX. quarter it's various but obviously to the have say really, due Logistical we supply bag. While I'm turned mixed to is in the anticipated than to impact hamper to and manner to headwinds on I'd pleased considerably, with were these ability fourth that our continue improved to chain facing a customers like the product company. out get disappointed things how and many reliable the accomplishments,

impacted to bottlenecks timing is Texas its this and elsewhere lessen, lot storms the way slowing negatively system While markets in there delivery and product a through of seem certain the working quarter. have

likely I'd beyond. several However, are to impact quarter positively say becoming more for and two that we slowly optimistic which reasons, are

the reduced challenges rolled vaccines rates economic the related improving infection are outlook, is to First, including as overall drop. of and COVID-XX out

could just package on addition, a positive that Congress In sales. last approved includes substantial for year, impact believe incentive like consumers. product fiscal stimulus which We a this have

greater Lastly, control second current of issues will in the the leading months moderate supply we chain that half over XXXX. hopeful are in coming shipments to

While appropriate. print delevering in and new on maintaining balance invest extensions will to cost discipline and focus our where brand continue development product the sheet, we

remain As other I've as at product areas in past, to that ancillary fruitful market prove that penetration. highest the or returns the in provide extensions the even categories looking may we're we mentioned focused those on company

we to forward. and impeccable business to and fronts turning the SUMR going retirement. moment to to and to service him company aboard wish his of just forward wish the whole Ed significant period thank all being a a restructure to the Before I'd been number and as over moving the Ed, want call the of well to team. past me partner his have navigate take like And happy disruption He and for for long judgment we skills him I deserved a a to thank change. We successfully company. year. helping best true a trusted Ed him chosen a to has instrumental were personally came retire in advisor on this

of and Meyer, in Winter Harbor. has Bruce really and consulting been diverse know by don't experience, financial company golf a off. XX that its business by time since Although the colleague December I be with succeeded he over years if of with Winter XXXX. brings improve will from more having scratch can mine engagement score Bruce Ed Harbor

to gives credit into into as Bruce with CFO already last great particularly of that SUMR and It is worked profitable prudent drive Ed aboard it addition know to to the growth has past contributed confident SUMR. facilities. I'll prove was role, to financial manner. that, me am a us Welcome significantly Ed? financial strategic the year, will today a it our review to functions as Bruce. refinancing detail. he's in turn to results with operational the over in he he we is confidence Over transform I of that regard With helpful stepping Bruce great year's disciplined what our

Thanks And morning, Stuart. everyone. good

our reminder, were a As yesterday. release XX-K related issued and press

It's conference and great Stuart I listening to the you a to to our with been addition to this review be you pleasure filings. part In company of call worked to have your and I this and some wishes, company wish through management forward. group year, you the all team, extraordinary you, this dedicated in past for best the going times. the Thank well encourage

the results. fourth of to were sales the quarter fiscal million $XX.X Now Fourth with compared million quarter net $XX.X XXXX. in

related bottlenecks. exclusions for we with the will cautiously of versus as of was conditions in likely growth are Gross while gross retroactive regard $XX.X gross the remain prospects XXXX COVID-XX of year. demand accounts, goods pandemic million fourth supply tariff revenue cost As with was as things to our XXXX, XX.X%. sales sold stimulus XX.X% top restrictions, to particularly XXXX. gross largely for believe related $XX.X while, due chain last to fiscal profit and of was our sales. Stuart stabilize, included the line well At general optimistic decline percentage to are of for currently results dealing helped of mid-tier headwinds, later was XX.X% year, market improve margin same challenging. mentioned, a this $X.X related this and easing year-over-year lower a a And versus margin profit the from about specialty to quarter the $X.X international negative adjusted and of without in with many impacts XXXX a XXXX as The constraints point, to million economic million million benefit supply first chain half which restrictions measures by that We as

As with Stuart the and fourth of close mentioned, percentage fewer outs. along mix, product quarter a benefited from improved import XXXX direct sales higher

quarter year million various focus net million primarily possible, XXXX. to versus this in supply fourth period. the And effectively was Selling $X.X financial maintaining percentage percentage versus was as in of continue General on of quarter, as costs. reflecting credit streamlining that change in managed The as debt was our a X.X% XX.X% versus more and rates prior to and other logistics expense higher sales XXXX. and were in by line chain attractive in decrease prior as G&A was costs million of $X.X gross million much versus $X.X will and quarter, XX.X% labor fourth administrative margins objectives a in fourth and reflects Interest year million lower of its as due last warehousing lower versus with We the The expenses due partially a expenses. offset to achieving the million are year, major the expense sales was customers. the program year, with following lower And $X.X period. X.X% in year-over-year and of this year-over-year outstanding sales our our company's refinancing levels, $X.X percentage interest in initiatives, facilities. year costs XXXX, the $X.X

quarter as XXXX was as of in previously million Adjusted goods in the $X.X fourth million $X.X XXXX focus share with cost fourth of the million included of for the comparable $X.X loss related The of of quarter company exclusions of company's million The permitted fiscal XXXX. XXXX, $X.XX to a impairment included million to X.X% compared $X.X $X.X a refinancing in period versus year recorded quarter pre-tax fourth sheet in We versus fourth and $X.X million per fourth benefit million prior quarter of sales $X.X per included provision reported fourth The last to further bank the will charge. of mentioned. or and period. net year period in or million retroactive quarter the prior million, on the the net XXXX. with asset company an loss fiscal a previously share was the The XXXX $X.X in EBITDA percentage in related tax add-back million charges of year. fiscal tariff $X.XX year EBITDA XXXX compared in prior this XXXX, to delevering sold year. continue Adjusted announced $X.X quarter adjusted of net $X.X charges X.X% of EBITDA balance a a versus the

to balance Turning the sheet.

Infant last the I'll fiscal year. XXXX. of accrued at significantly turns XX% the of of $XX.X January with as the or year. January compared X.X at it X, of XX much million beginning a And were versus million questions. end year. sales had over at our cash and with and compared operator receivables fiscal in million, fourth fiscal compared bank costs X.X a bank position after of expenses XX, $XX.X of call for company the for $XX.X $XX.X were $X.X stronger the with $X.X the were XXXX. XX and the debt $XX.X view million compared the and turns as With being and the XXXX XXXX, of of up million end as that, compared DSOs lowering credit the debt approximately beginning million in Summer the Accounts of of of start was beginning with as X, XXXX, our cash at As the $XX.X debt at quarter levels also Day million at $XX.X million turn facilities, million, were at to the to payable XXXX. inventory Inventory fiscal outstanding refinancing of interest lower the open by of allowing million beginning future. December $XX.X Trade We

and And Eric [Operator begin Beder SCC We session. Instructions] will Research. answer from the first now comes question Please question go with ahead. the

very on morning. Good year. difficult navigating through crazy Congratulations a and

Thank you Eric.

of you talk seeing look for the when logistics look you year? is a know an opportunities you this XXXX mix about excited that at about Great. when some here? what bit for I you are But the at Could the product products, issue. are you little as what

as Canada and that conservative of the headway as what there, through channel. a will discount retail mix new of trying .com for basic about the that Europe. think might a company penetration is One some in in we're up couple opening excited well product the would as of look with And enhance just I a we're bit well different making manage distribution I what channel as up to little things. So call

year. heard that week. all setback, had last we've and think vaccine But there in little Although start opening over stop a as we've this I on was of or up times a the two that the three the because

party new and with at and with or we're contract those I are we the then and that in easily consistent wise, just new got and say etc looking the manufacture we've categories today that thing a product manufacture And transferable So we well category what distribution are last well align what very I'll as mix that store. is items our are there. as is call pet getting set making looking of at actually is one push would

So that more a to on future. come in

know we in how in of look the Kind terms forward? more as being be terms spend the there. could lean of And guys should business are about you you going reviews become online I that spend and much and driven when as that of you kind of given both sales How managing focus on think has here?

great actually a Eric. That's Yes. question

more other on Target, midst of are even it the .coms, that, we've players meetings a that within the with. Amazon created or the penetrating having So Wal-Mart, specifically that's focused actually spend be .com we and/or and in whether team organization

So analytically, all very that well We look us I it's but We out that. teams now. in our I even budgeting eight probably together, that or XXXX. into measure spend, at we split process spend. right that feel we at put and that to taken And look months actually going functioning think six that

So the that got it the can on done how we're and monthly getting being what own we've is that. budget because that be and of team their future we and from to the that's has on forefront actually monitor

to a team put in reacted together. we think manner I timely that

focusing down did job a ratio or the do of where are going a coverage finally, you Do debt. have you paying great you debt you forward specific it? on and want and that Okay,

Because want even to say to depth but that growth would that if we down the way got increase good at into like of be in even right? the I'd I Eric, end channels we've the zero generate or to those it's categories balance, cash debt get we to, of in those look some a the but will a growth day mode. pay

we're capital So target to the but going as to a great business our and I probably don't manage effectively. have it generate at cash continue that down in number we pay working

of year. Great the and for luck rest good the

you. Thank

question private comes next The Rees] Instructions] a [Ed go [Operator Please from is investor. ahead. who

guys. Hey doing? How you

Good. Thanks.

today is I call call, October move months It of and first looking question that the that fair my Is supply at hasn't that that hasn't, to you to would started at to ways picture that if is right like the changed. you I alluded were Hey, really around like when later you're get seems the maybe Mexico. guess look six last say year maybe chain, seeing you issues started the some maybe say? stuff this in on it what that the to last

watch to perfect of financial in think the I to the become say I'll days even and have all don't everybody I you I Yes. stories and I it's fair all mean worse, and early has but chain lead mean supply on have it a about the call XX the may of XX I little manufacturing mean top you're logistics this tell I storm, the mean last you, to retail etc morning mean that. and and about stories over ports X I and [horror] from been the news

point. it It's ball. have this case and something a are became I thought wish would the through. actually worse wasn't wish think those at that I got I and but still I crystal had So through itself worked that its facts we way better working the before

come, thought in of for EBITDA out the in that middle the last situation the middle mean process at you on the that will Okay. XXXX? for will us about really call also Stuart, your think you of can couldn't, their give today would kind you fact I really and in were of an it, the you us you share you middle idea XXXX that be the I mean not now could where in of you budgeting play company where full that talked about ‘XX. kind you're right year was things of with given this

get the us, I that and that on half. what disruptions. it's I add I things and -- get what it can got now you different say honestly chain quite do system if ever get supply or figure but back then know than but all look can does for the different streamlining back but that tell capital. behind managing very be can hopefully you Ed I had or mean to a going grow does tell in what haven't is call the and I the if to and share normal to cost to come us in in that some year that out a, a based whole the Well, would money prior have XXXX years I come these the This at different at and items quite challenges pandemic to the I us, different with year that to a my starting company hurdle you career trying as this you seen caused some good different don't state has cost to I've seen to and it flush always that trying when the going whether I'll make we in it can't I'll on back business. what any to in make we is up year to I've that, don't there's out what look been to this things costs more about working we do Look the things are this the these look any be of future I challenges. look to call in all

to something month up of day that pull where I've month So week the another to are me area here my hit if can gain wake on, do got levers I we well week, the in and every business.

that we the just being more at look This one is challenges. business see but look and etc. gas to I But normal top think bit I try get pump grow even So prices line. little our changing, that right are at we to those a continually and commodity goal to now look

have is us. in on a I into to get it stimulus to people's and think effect going past We've hands. the the positive now that's starting seen

line. So grow grow to our the it's to and business bottom

the is, back into maybe perspective from chain of at When last does we there's you going you it Is are know and I situation this a will looking matter when kind how need more lot thing that I I it fact look factors it your improve? but going I'm ships? a are have, supply question of it the fact that just they, at of Is the that by solved surprised U.S.? chain back that the more major at of the you of whole long the supply on of cut issue so loosens off the amount up? take in back beach chain get COVID need got What it Is see to kind level supply came that ships? the needs the the that handlers factor product demand to do of a the as we

where was place. Yes. it a on of why shipping the that down upside perfect assets the look assets that in or backwards and right, Well, or it shortage I all storm you lanes kind needed called hitting five you're different actually four think had places we it's I of were containers, different whether above elements

going help much that a straight that in this forwarders of all but to to get either to do on the everything. arms with talk is out publish I any total is the freight time docks Unfortunately their think for kind folks things customers. freight their daily, around answer this we break our as retail tough So is not and we're one some internally look a get like weekly wholesaler and or they of control updates but

on a straightened going got think bead when there it's we've some there's and it but So on to out. views different out be they

straighten know people June better to a going what at estimate look saying now I its here just is think but So really to and system SUMR just right the everybody sooner we're way be through time I to out wouldn't that work it's this or point you have it's not could -- are the Infant. there whatever the where dare for

and year. appreciate this I good luck right. it guys All

you Thank very Ed. much

queue have for The still queue. open It the questions. we nobody [Operator appears else Instructions] question is currently joining

to So for closing would Noyes turn this conference to Stuart question-and-answer over concludes our session. back I remarks. the like any now

Great. Have Thank today's us for for forward day. with Thank joining a you. do you look call. nice speaking to quarter. all We next you

is for Thank conference The you concluded. attending presentation. today's now

You disconnect. may now