Kid Brands, Inc. (NYSE: KID) today reported financial results for
the three months and full year ended December 31, 2012 ("Q4 2012"
and "FY 2012", respectively).
Summary Results
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
(in millions, except per % %
share data) 2012 2011 Change 2012 2011 Change
------ ------ ------ ------ ------ ------
Net sales $ 57.9 $ 63.0 (8.1)% $229.5 $252.6 (9.2)%
Net loss $ (3.9) $(35.4) - $(54.1) $(38.6) -
Net loss per diluted
share $(0.18) $(1.63) - $(2.48) $(1.78) -
Adjusted net income
(loss) * $ (0.7) $ (0.2) - $ 0.6 $ 5.6 (89.8)%
Adjusted net income
(loss) per diluted
share* $(0.03) $(0.01) - $ 0.03 $ 0.26 (88.5)%
* "Adjusted net income (loss)" and "Adjusted net income (loss)
per diluted share" for each of Q4 2012, the three month period
ended December 31, 2011 ("Q4 2011"), FY 2012, and the full year
ended December 31, 2011 ("FY 2011") are non-GAAP financial
measures, which are described in detail under the heading "Non-GAAP
Information" below and are reconciled to GAAP measures in the table
at the end of this release.
Fourth Quarter 2012 Results
Net sales for Q4 2012 decreased 8.1% to $57.9 million, compared
to $63.0 million for Q4 2011. This decrease was primarily the
result of sales declines of 27.6% at Kids Line, 8.5% at LaJobi and
6.6% at CoCaLo, in each case primarily due to lower sales volume at
certain large customers. These declines were partially offset by an
increase in sales of 26.4% at Sassy, primarily due to increases at
two large customers and increased sales of Carter's®-branded
products.
Gross profit for Q4 2012 was $13.8 million, or 23.8% of net
sales, as compared to gross loss of ($13.8) million for Q4 2011(1).
Gross profit increased in absolute terms as a result of: (i) a
$19.0 million non-cash impairment of the Kids Line customer
relationship intangible asset (the "Kids Line Impairment"), and a
$9.9 million non-cash impairment of the LaJobi trade name
intangible asset (the "LaJobi Impairment"), each of which was
recorded in Q4 2011, and did not recur in 2012; (ii) the impact of
lower markdowns and allowances ($0.9 million); and (iii) lower
inventory reserves and amortization costs of $0.7 million,
partially offset by: (i) lower gross profit dollars ($2.2 million)
as a result of lower sales; and (ii) the impact of higher costs of
products ($0.7 million).
Selling, general and administrative (SG&A) expense was $14.2
million, or 24.5% of net sales, for Q4 2012, as compared to $16.1
million, or 25.5% of net sales, for Q4 2011(1). SG&A expense
decreased in absolute terms and as a percentage of sales primarily
as a result of: (i) decreased professional fees incurred in
connection with various Customs matters and related litigation
costs ("Customs Compliance Costs") ($0.7 million); (ii) lower
compensation expense related to headcount reductions and lower
bonus accruals ($0.7 million in the aggregate); (iii) a reduction
in product development costs ($0.5 million); (iv) a $0.4 million
accrual recorded in Q4 2011, representing the difference between
$1.4 million, the amount of the full and final settlement of a
contingent liability under a lease transferred to the buyer of our
former gift business in 2008 (the "TRC Lease Settlement"), and
amounts previously accrued in connection therewith, which did not
recur in Q4 2012; (v) lower stock-based compensation expense ($0.2
million); and (vi) the impact of other expense reduction
initiatives that resulted in an aggregate additional savings of
$0.2 million in Q4 2012. These decreases were offset by increases
in professional fees of ($0.7 million), and changed timing of trade
show costs ($0.2 million).
Other expense was $2.5 million for Q4 2012 as compared to $0.8
million for Q4 2011, primarily as a result of: (i) a $1.4 million
non-cash write-off during Q4 2012 (the "Q4 2012 Financing
Write-Off") of unamortized deferred financing costs in connection
with the execution of the Company's new credit agreement (the
"Salus Agreement"); and (ii) higher borrowing costs in Q4 2012
($0.3 million).
The income tax provision for Q4 2012 was $1.0 million on loss
before income tax provision of $2.9 million. The income tax
provision for Q4 2012 includes an increase in the valuation
allowance for deferred tax assets of $5.3 million. The income tax
benefit for Q4 2011 was $7.0 million on loss before income tax
benefit of $42.4 million.
Net loss for Q4 2012 was $3.9 million, or ($0.18) per diluted
share, as compared to a net loss of $35.4 million, or ($1.63) per
diluted share, for Q4 2011.
Non-GAAP adjusted net loss for Q4 2012 was $0.7 million, or
($0.03) per diluted share, as compared to non-GAAP adjusted net
loss of $0.2 million, or ($0.01) per diluted share, for Q4
2011.
Non-GAAP adjusted net loss and adjusted net loss per diluted
share for Q4 2012 reflect adjustments to net loss, as reported, to
exclude the effect of the following items and to apply an assumed
tax rate of 39% to the resulting adjusted pre-tax loss: (i) the
$1.0 million income tax provision; (ii) the Q4 2012 Financing
Write-Off ($1.4 million); (iii) Customs Compliance Costs of $0.3
million; (iv) $0.1 million of voluntary product recall costs; and
(v) $0.1 million of additional accrued interest on anticipated
aggregate Customs duties ("Customs Interest") (collectively, the
"Q4 2012 Adjustments").
Non-GAAP adjusted net loss and adjusted net loss per diluted
share for Q4 2011 reflect adjustments to net loss, as reported, to
exclude the effect of the following items and to apply an assumed
tax rate of 39% to the resulting adjusted pre-tax loss: (i) the
$7.0 million income tax benefit; (ii) the Kids Line Impairment
($19.0 million); (iii) an aggregate non-cash impairment charge of
$11.7 million in Q4 2011 to write-off goodwill recorded in
connection with the restatement of specified historical financial
statements and the related recording of a liability for potential
LaJobi earnout consideration (the "Goodwill Impairment"); (iv) the
LaJobi Impairment ($9.9 million); (v) Customs Compliance Costs of
$1.0 million; (vi) a portion of the 2011 TRC Lease Settlement ($0.4
million); and (vii) $0.1 million of Customs Interest (collectively,
the "Q4 2011 Adjustments").
Full Year 2012 Results
Net sales for FY 2012 decreased 9.2% to $229.5 million, compared
to $252.6 million for FY 2011. This decrease was primarily the
result of sales declines of 20.1% at Kids Line, 13.9% at CoCaLo and
6.8% at LaJobi, in each case due to lower sales volume at certain
large customers. These declines were partially offset by an
increase in sales of 10.1% at Sassy, primarily as a result of
increases in sales at two large customers and higher sales of
Carters®-branded products.
Gross profit was $57.8 million, or 25.2% of net sales, for FY
2012, as compared to $41.3 million, or 16.3% of net sales, for FY
2011(2). In absolute terms, and as a percentage of net sales, gross
profit increased as a result of the impact of: (i) the 2011 Kids
Line Impairment ($19.0 million) and the 2011 LaJobi Impairment
($9.9 million) that did not recur in 2012; (ii) lower amortization
of intangible assets ($1.1 million); and (iii) the impact of lower
markdowns and allowances ($1.0 million), partially offset by: (A)
lower gross profit dollars ($6.8 million) as a result of lower
sales; (B) higher landed cost of products ($6.5 million) as a
result of higher product costs, changes in product mix (including
increased sales of licensed products in FY 2012 compared to FY
2011, resulting in increased royalties of $0.4 million), and
increased close-out sales primarily designed to reduce inventory;
and (C) increases in inventory reserves ($0.8 million) related to
underperforming product lines.
Selling, general and administrative expense was $56.9 million,
or 24.8% of net sales, for FY 2012, compared to $66.5 million, or
26.3% of net sales, for FY 2011(2). The decrease in SG&A costs
of $9.6 million was primarily a function of: (i) decreased Customs
Compliance Costs ($3.4 million); (ii) decreased commissions and
freight-out costs ($1.6 million); (iii) the 2011 TRC Lease
Settlement ($1.4 million), which did not recur in FY 2012; (iv)
lower stock-based compensation expense ($1.1 million); (v)
decreases in product development costs ($0.7 million); (vi) lower
trade show costs ($0.6 million); and (vii) the impact of other
expense reduction initiatives that resulted in an aggregate
additional savings of $2.0 million in FY 2012. These decreases were
partially offset by increases in other professional fees of $1.2
million primarily related to amendments to, and a refinancing of,
our credit facility during FY 2012, and professional fees related
to other FY 2012 Company initiatives.
No impairment charges to any of the Company's intangible assets
(either definite or indefinite-lived) were recorded in FY 2012. The
$11.7 Goodwill Impairment was recorded at the end of FY 2011.
A reduction of the valuation reserve recorded in June 2009
against the note receivable pertaining to the sale of the Company's
former gift business was recorded in the second quarter of 2011
($2.0 million) as a result of the bankruptcy of the buyer of such
gift business (the "TRC Note Adjustment").
Other expense was $6.2 million for FY 2012, as compared to $5.2
million for FY 2011. This increase of approximately $1.0 million
was primarily due to an increase in the amortization of financing
costs, as well as write-offs of unamortized deferred financing
costs relating to amendments to, and the refinancing of, the
Company's senior credit facility in FY 2012 (an aggregate of $3.3
million during 2012, as compared to $1.7 million during 2011),
partially offset by lower borrowings and lower borrowing costs in
FY 2012 compared to FY 2011 ($0.5 million).
The income tax provision for FY 2012 was $48.8 million on loss
before income tax provision of $5.3 million. The income tax
provision for FY 2012 includes a $50.3 million increase in the
valuation allowance for deferred tax assets, described in detail in
the 2012 10-K. The income tax benefit for FY 2011 was $1.5 million
on loss before income tax benefit of $40.1 million.
Net loss for FY 2012 was $54.1 million, or ($2.48) per diluted
share, as compared to a net loss of $38.6 million, or ($1.78) per
diluted share, for FY 2011.
Non-GAAP adjusted net income for FY 2012 was $0.6 million, or
$0.03 per diluted share, as compared to non-GAAP adjusted net
income of $5.6 million, or $0.26 per diluted share, for FY
2011.
Non-GAAP adjusted net income and adjusted net income per diluted
share for FY 2012 reflect adjustments to net loss, as reported, to
exclude the effect of the following items and to apply an assumed
tax rate of 39% to the resulting adjusted pre-tax income: (i) the
$48.8 million income tax provision; (ii) aggregate non-cash
write-offs of unamortized deferred financing costs of $2.8 million
(consisting of the $1.4 million Q4 2012 Financing Write-Off, a $0.7
million write-off of unamortized deferred financing costs
originally incurred in FY 2011 as a result of a credit refinancing
and a $0.8 million write-off of unamortized deferred financing
costs resulting from the voluntary reduction of the aggregate
commitments under the Company's prior credit facility); (iii)
Customs Compliance Costs of $2.1 million; (iv) $0.8 million of
severance costs; (v) $0.7 million of voluntary product recall
costs; (vi) a reduction in the aggregate accrual for Customs duties
($0.4 million) as a result of the completion of the Company's prior
disclosure and settlement submissions to U.S. Customs for all
business units; and (vii) $0.2 million of additional Customs
Interest (collectively, the "FY 2012 Adjustments").
Non-GAAP adjusted net income and adjusted net income per diluted
share for FY 2011 reflect adjustments to net loss, as reported, to
exclude the effect of the following items and to apply an assumed
tax rate of 39% to the resulting adjusted pre-tax income: (i) the
$1.5 million income tax benefit; (ii) the Kids Line Impairment
($19.0 million); (iii) the Goodwill Impairment ($11.7 million);
(iv) the LaJobi Impairment ($9.9 million); (v) Customs Compliance
Costs of $5.5 million; (vi) the TRC Note Adjustment ($2.0 million);
(vii) the TRC Lease Settlement ($1.4 million); (viii) a $1.1
million additional accrual for aggregate anticipated Customs duties
and Customs Interest; (ix) a $1.0 million non-cash write-off of
unamortized deferred financing costs originally incurred in
connection with a prior credit facility; (x) $0.8 million in
transition costs related to the resignation of the Company's former
CEO; (xi) $0.7 million in LaJobi crib remediation costs; and (xii)
$0.1 million in fees for an amendment to a prior credit facility
(collectively, the "FY 2011 Adjustments").
Customer Deduction
As has been previously disclosed, in March 2013, a large
customer of ours deducted approximately $900,000 from its payment
of outstanding amounts due (the "Deduction"). In connection with
our investigation of the matter, we have determined that the
Deduction represents the customer's annual accounting of product
returns. The Company currently believes that a substantial portion
of such claim is without merit or can be offset against other
amounts owed to us by, or credited to, such customer. As a result,
no amount in excess of our previously accrued 2012 product return
reserve for this customer was recorded for the period ended
December 31, 2012. Although the Company believes that this matter
can be successfully resolved without the need to accrue any
additional material amounts with respect thereto, there can be no
assurance that this will be the case. As the matter has not been
resolved, on April 16, 2012, the Company and the Agent under the
Salus Agreement executed an amendment thereto (the "Amendment"), to
amend the definition of Adjusted EBITDA for purposes of determining
compliance with the financial covenants therein, effective for all
prior periods through April 30, 2014, to include an additional
add-back to net income for the amount of any additional expense or
accrual in excess of the Company's existing product return reserves
in connection with the Deduction, up to a maximum aggregate amount
of $600,000 (an "Excess Accrual"). The Borrowers paid a fee of
$50,000 in connection with the execution of the Amendment, and will
pay an additional $50,000 if and when the Borrowers first use the
amount of any Excess Accrual as an add-back to net income in
determining compliance with the financial covenants as permitted by
the Amendment.
Conference Call Information
The conference call, which will be held at 9:00 a.m. ET today,
April 17, 2013, may be accessed by dialing 888-715-1394, or
913-312-1437, access code: 7966273. Additionally, a webcast of the
call can be accessed at www.kidbrands.com, www.earnings.com, or
http://www.media-server.com/m/p/4cpfgkgs, and will be archived
online shortly after the conference call for 90 days. A replay of
the call will be available through April 24, 2013, by dialing
877-870-5176, or 858-384-5517, access code: 7966273.
Non-GAAP Information
In this release, certain financial measures for Q4 2012, FY
2012, Q4 2011 and FY 2011 are presented both in accordance with
United States generally accepted accounting principles ("GAAP") and
also on a non-GAAP basis. In particular, "Adjusted net income
(loss)" and "Adjusted net income (loss) per diluted share" for each
of the foregoing periods are non-GAAP financial measures.
Adjusted net income (loss) is defined as the reported net
(loss), plus/minus certain items (including reversal of the
relevant income tax provision or benefit), and the application of
an assumed tax rate of 39% on the resulting adjusted pre-tax income
(loss). Adjusted net income (loss) and adjusted net income (loss)
per diluted share for: (i) Q4 2012 exclude the Q4 2012 Adjustments;
(ii) FY 2012 exclude the FY 2012 Adjustments; (iii) Q4 2011 exclude
the Q4 2011 Adjustments; and (iv) FY 2011 exclude the FY 2011
Adjustments.
In addition, adjusted net income per diluted share for the FY
2012 and FY 2011 also include adjustments to reflect the
weighted-average dilutive effect of certain shares underlying
in-the-money stock appreciation rights (such shares were excluded
from the weighted-average diluted share calculation used to
determine net loss per diluted share, as reported for such periods,
because the Company was in a net loss position for such periods,
and the inclusion of such shares would have been anti-dilutive). In
the computation of adjusted net income per diluted share for such
periods, however, such shares were included.
These non-GAAP measures are not based on any comprehensive set
of accounting rules or principles. The Company believes that
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with our results of operations as
determined in accordance with GAAP. However, the Company believes
that the non-GAAP measures presented in this release are useful to
investors, as they enable the Company and its investors to evaluate
and compare the Company's results from operations and cash
resources generated from the Company's business in a more
meaningful and consistent manner (by excluding specific items which
are not reflective of ongoing operating results) and provide an
analysis of operating results using the same measures used by the
Company's chief operating decision makers to measure performance.
These non-GAAP financial measures result largely from management's
determination that the facts and circumstances surrounding the
excluded charges are not indicative of the ordinary course of the
ongoing operation of the Company's business. As a result, the
non-GAAP financial measures presented in this release may not be
comparable to similarly titled measures reported by other
companies, and are included only as supplementary measures of
financial performance. This data is furnished to provide additional
information and should not be considered in isolation as a
substitute for measures of performance prepared in accordance with
GAAP. Reconciliations of these non-GAAP financial measures to the
most directly comparable financial measures calculated and
presented in accordance with GAAP are included in the tables
attached to this press release.
Kid Brands, Inc.
Kid Brands, Inc. and its subsidiaries are leaders in the design,
development and distribution of infant and juvenile branded
products. Its design-led products are primarily distributed through
mass market, baby super stores, specialty, food, drug, independent
and e-commerce retailers worldwide.
The Company's current operating subsidiaries consist of: Kids
Line, LLC; LaJobi, Inc; Sassy, Inc.; and CoCaLo, Inc. Through these
wholly-owned subsidiaries, the Company designs, manufactures
(through third parties) and markets branded infant and juvenile
products in a number of complementary categories including, among
others: infant bedding and related nursery accessories and décor,
nursery appliances, and diaper bags (Kids Line® and CoCaLo®);
nursery furniture and related products (LaJobi®); and developmental
toys and feeding, bath and baby care items with features that
address the various stages of an infant's early years (Sassy®). In
addition to the Company's branded products, the Company also
markets certain categories of products under various licenses,
including Carter's®, Disney®, Graco® and Serta®. Additional
information about the Company is available at
www.kidbrands.com.
Note: This press release contains certain forward-looking
statements. Additional written and oral forward-looking statements
may be made by the Company from time to time in Securities and
Exchange Commission (SEC) filings and otherwise. The Private
Securities Litigation Reform Act of 1995 provides a safe-harbor for
forward-looking statements. These forward-looking statements
include statements that are predictive in nature and depend upon or
refer to future events or conditions, and include, but are not
limited to, information regarding the status and progress of our
operating activities, the plans and objectives of our management
and assumptions regarding our future performance, operating
expenses, working capital needs, liquidity and capital
requirements, business trends and competitiveness. Forward-looking
statements include, but are not limited to, words such as
"believe", "plan", "anticipate", "estimate", "project", "may",
"planned", "potential", "should", "will", "would", "could",
"might", "possible", "contemplate", "continue", "expect", "intend",
"seek" or the negative of or other variations on these and other
similar expressions. In addition, any statements concerning future
financial performance, ongoing business strategies or prospects,
and possible future actions, are also forward-looking statements.
The Company cautions readers that results predicted by
forward-looking statements, including, without limitation, those
relating to our future business prospects, revenues, working
capital, liquidity, capital needs, interest costs and income are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those indicated in the
forward-looking statements. Specific risks and uncertainties
include, but are not limited to, those set forth under Part I, Item
1A, Risk Factors, of the Company's most recent Annual Report on
Form 10-K and any subsequent Quarterly Reports on Form 10-Q, each
as filed with the SEC. Forward-looking statements are also based on
economic and market factors and the industry in which we do
business, among other things. These statements are not guarantees
of future performance. Forward-looking statements speak only as of
the date the statements are made. Except as required under the
federal securities laws and rules and regulations of the SEC, the
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
(1) As is described in more detail in our Annual Report on Form
10-K for the year ended December 31, 2012 (the "2012 10-K"), the
Company corrected an immaterial misclassification of specified
warehousing, outbound handling and outbound shipping costs
("Shipping Costs") for specified periods, including annual and
interim periods during 2011. As a result, among other things, the
Company revised financial information for interim periods in 2011
included in the 2012 10-K (including by decreasing cost of sales by
$1.3 million for Q4 2011 and increasing selling, general and
administrative expense by a corresponding amount). The financial
statements and information in this press release include the impact
of such revisions for Q4 2011. The misstatements had no impact on
previously reported (Loss) Income from Operations, (Loss) Income
before Provision (Benefit) for Income Taxes, Net (Loss) Income, or
(Loss) Earnings Per Share for any affected period.
(2) As is described in more detail in the 2012 10-K, the Company
corrected an immaterial misclassification of specified Shipping
Costs for specified periods, including annual and interim periods
during 2011. As a result, among other things, the Company revised
the Consolidated Statement of Operations for FY 2011 included in
the 2012 10-K (by decreasing cost of sales by $5.4 million for FY
2011 and increasing selling, general and administrative expense by
a corresponding amount). The financial statements and information
in this press release include the impact of such revisions for FY
2011. The misstatements had no impact on previously reported (Loss)
Income from Operations, (Loss) Income before Provision (Benefit)
for Income Taxes, Net (Loss) Income, or (Loss) Earnings Per Share
for any affected period.
KID BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Share and Per Share Data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
Net sales $ 57,879 $ 63,007 $ 229,486 $ 252,610
Cost of sales* 44,096 76,781 171,697 211,323
----------- ----------- ----------- -----------
Gross profit (loss)* 13,783 (13,774) 57,789 41,287
Selling, general and
administrative
expenses* 14,178 16,089 56,912 66,543
TRC valuation reserve - - - (2,000)
Impairment of goodwill &
intangibles - 11,719 - 11,719
----------- ----------- ----------- -----------
Operating (Loss)/income (395) (41,582) 877 (34,975)
Other (expense) income:
Interest expense,
including amortization (2,494) (809) (6,352) (5,054)
Other, net (16) (34) 189 (107)
----------- ----------- ----------- -----------
(2,510) (843) (6,163) (5,161)
----------- ----------- ----------- -----------
(Loss) from operations
before income tax
provision (benefit) (2,905) (42,425) (5,286) (40,136)
Income tax provision
(benefit) 1,039 (6,994) 48,814 (1,490)
----------- ----------- ----------- -----------
Net loss $ (3,944) $ (35,431) $ (54,100) $ (38,646)
=========== =========== =========== ===========
Basic loss per share: $ (0.18) $ (1.63) $ (2.48) $ (1.78)
=========== =========== =========== ===========
Diluted loss per share: $ (0.18) $ (1.63) $ (2.48) $ (1.78)
=========== =========== =========== ===========
Weighted average shares:
Basic 21,840,000 21,746,000 21,829,000 21,671,000
=========== =========== =========== ===========
Diluted 21,840,000 21,746,000 21,829,000 21,671,000
=========== =========== =========== ===========
* Amounts for Q4 2011 and FY 2011 have been revised for immaterial
corrections as described above and in the 2012 10-K.
KID BRANDS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Dollars in Thousands)
December 31, December 31,
2012 2011
------------ ------------
Cash and cash equivalents $ 318 $ 2,456
Restricted cash 2,654 -
Accounts receivable, net 42,079 39,313
Inventories, net 39,953 42,688
Other current assets 3,722 11,335
Long-term assets 52,168 97,054
------------ ------------
Total assets $ 140,894 $ 192,846
============ ============
Short-term debt $ 57,527 $ --
Other current liabilities 45,084 52,159
Long-term liabilities 1,421 50,873
------------ ------------
Total liabilities 104,032 103,032
------------ ------------
Shareholders' equity 36,862 89,814
------------ ------------
Total liabilities and shareholders' equity $ 140,894 $ 192,846
============ ============
KID BRANDS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in Thousands, Except for Share and Per Share Data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
To arrive at Adjusted
net income (loss) and
Adjusted net income
(loss) per diluted
share(1):
Net loss, as reported $ (3,944) $ (35,431) $ (54,100) $ (38,646)
Less: tax provision
(benefit) 1,039 (6,994) 48,814 (1,490)
----------- ----------- ----------- -----------
Loss from operations
before income tax (2,905) (42,425) (5,286) (40,136)
Add: Kids Line
Impairment - 19,046 - 19,046
Add: Impairment of
Goodwill - 11,719 - 11,719
Add: LaJobi Impairment - 9,900 - 9,900
Add: Customs Compliance
Costs (included in
SG&A) 288 1,024 2,092 5,521
Add: Customs
duty/interest accrual
(portion included in
cost of sales) - - (380) 740
(portion included in
interest expense) 73 88 236 322
Add: Voluntary product
recall costs 111 - 670 -
Add: Crib Compliance
Costs (included in cost
of sales) - - - 677
Add: March 2011 bank
Amendment (included in
interest expense) - - - 131
Add: Financing Write-
offs 1,361 - 2,844 1,007
Add: Management
Transition/Severance
Costs - - 752 805
Add: TRC Lease
Settlement (included in
SG&A) - 350 - 1,401
Less: TRC Note
Adjustment
(included in TRC
valuation reserve) - - - (2,000)
Less: Tax impact of
above items (using
assumed 39% effective
rate) 418 116 (362) (3,562)
----------- ----------- ----------- -----------
Adjusted net income
(loss) $ (654) $ (182) $ 566 $ 5,571
=========== =========== =========== ===========
Adjusted net income
(loss) per diluted
share $ (0.03) $ (0.01) $ 0.03 0.26
----------- ----------- ----------- -----------
Weighted-average diluted
shares outstanding, as
reported 21,840,000 21,746,000 21,829,000 21,671,000
Weighted-average diluted
shares outstanding, as
adjusted (1) 21,844,000 21,746,000 21,838,000 21,814,000
(1) For Q4 2012, FY 2012, Q4 2011, and FY 2011, the Company was in a net
loss position on a reported (GAAP) basis and, accordingly, the weighted-
average diluted shares outstanding excluded certain shares underlying in-
the-money stock appreciation rights because inclusion of such shares would
have been anti-dilutive. In the computation of "Adjusted net income per
diluted share" for FY 2012 and FY 2011, however, such shares were
included.
AT THE COMPANY Marc S. Goldfarb Senior Vice President
& General Counsel 201-405-2454 AT FTI CONSULTING
Jennifer Milan / Daniel Haykin General Information 212-850-5600
Kid Brands (CE) (USOTC:KIDBQ)
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