Kid Brands (KID) Guides FY11 Well Below Consensus, Sees Weak 1H12
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Kid Brands, Inc. (NYSE: KID) today provided an update on its expected financial results for the year ended December 31, 2011. The Company also announced today that, in recognition of the view of the Staff of the Securities and Exchange Commission (the “SEC”) with respect to the impact of certain anticipated customs duties on prior periods, the Company will restate specified financial statements.
The Company now anticipates that its net sales results for the full year ended December 31, 2011 will be slightly below previously-issued guidance for a year-over-year decline of 7% to 8%, and its non-GAAP adjusted net income per diluted share for the full year 2011 will be significantly below previously-issued guidance of approximately $0.40 per diluted share. The Street is currently forecasting revenues will decline 5.6% as earnings total $0.40 per share.
The Company’s updated outlook for its 2011 results primarily from: (i) additional customer allowances intended to liquidate inventory at both the retail and wholesale level; (ii) higher than anticipated product costs as a percentage of net sales, resulting primarily from increased close-out sales, and increased sales of licensed products; (iii) lower than anticipated net sales due in part to an increase in returns accepted for discontinued items; and (iv) increased inventory reserves for slow-moving products.
As the Company is still engaged in the preparation of its financial statements for the year ended December 31, 2011, in part as a result of the need to restate certain financial statements as described below, the Company is currently not in a position to provide additional details regarding its results of operations for such year.
The Company took certain actions during the fourth quarter to improve the level and quality of its inventory and to strengthen customer relationships. Further, as planned, the Company embarked on a revision of its product line, addressed selling practices and refocused the design, packaging and pricing of core products. Also, as a result of actions taken by the Company, inventory levels at year-end 2011 were reduced significantly compared to levels at the end of the prior year period.
As new product introductions are not expected to be rolled out until late spring of 2012, sales and profitability are expected to remain soft in the first half of 2012.
The Company now anticipates that its net sales results for the full year ended December 31, 2011 will be slightly below previously-issued guidance for a year-over-year decline of 7% to 8%, and its non-GAAP adjusted net income per diluted share for the full year 2011 will be significantly below previously-issued guidance of approximately $0.40 per diluted share. The Street is currently forecasting revenues will decline 5.6% as earnings total $0.40 per share.
The Company’s updated outlook for its 2011 results primarily from: (i) additional customer allowances intended to liquidate inventory at both the retail and wholesale level; (ii) higher than anticipated product costs as a percentage of net sales, resulting primarily from increased close-out sales, and increased sales of licensed products; (iii) lower than anticipated net sales due in part to an increase in returns accepted for discontinued items; and (iv) increased inventory reserves for slow-moving products.
As the Company is still engaged in the preparation of its financial statements for the year ended December 31, 2011, in part as a result of the need to restate certain financial statements as described below, the Company is currently not in a position to provide additional details regarding its results of operations for such year.
The Company took certain actions during the fourth quarter to improve the level and quality of its inventory and to strengthen customer relationships. Further, as planned, the Company embarked on a revision of its product line, addressed selling practices and refocused the design, packaging and pricing of core products. Also, as a result of actions taken by the Company, inventory levels at year-end 2011 were reduced significantly compared to levels at the end of the prior year period.
As new product introductions are not expected to be rolled out until late spring of 2012, sales and profitability are expected to remain soft in the first half of 2012.
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