Use these links to rapidly review the document
TABLE OF CONTENTS
Index to Financial StatementsINDEX TO FINANCIAL STATEMENTS

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission File No. 001-33346

SUMMER INFANT, INC.

(401) 671-6550
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:
None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES o    NO ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES o    NO ý

         Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý    NO o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405232.405 of this chapter) during the preceedingpreceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES oý    NO o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "accelerated filer," large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

         Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o    NO ý

         The aggregate market value of the voting and non-voting common equity held by non-affiliates, computed by reference tobased on the price at which the common equity was sold, or the average bid and askedclosing price of such common equity,the registrant's Common Stock as of December 31, 2009reported on the Nasdaq Capital Market on June 30, 2012, was approximately $50,991,000.$37.2 million. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners are, in fact, affiliates of the registrant.

         The number of shares issued and outstanding of the registrant's common stock as of FebruaryMarch 1, 20102013 was 15,437,47718,133,945 (excluding unvested restricted shares that have been issued to employees).

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the registrant's Proxy Statement for its 2013 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

Table of Contents

INDEX TO FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 20092012

Table of Contents

FORWARD-LOOKING STATEMENTS

        This annual report on Form 10-K contains, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and include statements that are not historical facts and that express, or involve discussions as to, our expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," and "believes) Forward-looking statements are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in such statements. We caution investors that actual results or business conditions may differ materially from those projected or suggested in forward-looking statements as a result of various factors including, but not limited to, the risk factors described below. Wediscussed in Item 1A. Risk Factors and in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this annual report on Form 10-K. All forward-looking statements included in this report are based on information available to us as of the filing date of this report, and we assume no obligation to update any such forward-looking statements. New factors may emerge from time to time, and it is not possible for us to predict all such factors. Further, we cannot assure you that we have identified allassess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, that create uncertainties. Readers should not place undue reliance onmay cause actual results to differ materially from those contained in any forward-looking statements.

PART I

        Note that all dollar amounts in Part I are in thousands of U.S. dollars unless otherwise noted.

Item 1.    Business

BackgroundGeneral

        On March 6, 2007, under an AgreementFounded in 1985 and Plans of Reorganization, dated as of September 1, 2006 ("Acquisition Agreement"), KBL Healthcare Acquisition Corp. II ("KBL"), and its wholly owned subsidiary, SII Acquisition Corp. ("Acquisition Sub"), consummated a transaction by which (i) Summer Infant, Inc. ("SII") was merged with and into Acquisition Sub and (ii) all of the outstanding capital stock of each of Summer Infant Europe, Limited ("SIE") and Summer Infant Asia, Ltd. ("SIA" and, collectively, with SII and SIE, the "Targets") was acquired directly by KBL. As used in this Report, the term "Summer" includes each of the Targets. As used in this Report, the term "Company" means the registrant on a post-acquisition basis. On March 7, 2007, the securities of the Company commenced listingpublicly traded on the Nasdaq CapitalStock Market since 2007 under the symbols SUMR (common stock), SUMRW (warrants) and SUMRU (units).

        Effective upon closing, the Company changed its name to Summer Infant, Inc. and SII changed its name to Summer Infant (USA), Inc. Thus, the Company is nowsymbol "SUMR," we are a holding company called Summer Infant, Inc. operating through its wholly-owned subsidiaries, Summer Infant (USA), Inc., Summer Infant Europe, Limited ("SIE"), Summer Infant Canada, Ltd. ("SIC") and Summer Infant Asia, Ltd. ("SIA").

General

        We are aglobal designer, marketer, and distributor of branded juvenile health, safety and wellness products which(for ages 0-3 years) that are sold principally to large North American and UKEuropean retailers.

        We currently have more than 80 proprietarymarket our products in various product categories including nursery audio/video monitors, safety gates, durable bath products, bed rails, relatedthe monitoring, health and safety, products, booster and potty seats, bouncers and a product line of soft goods/bedding. In the past two years, the Company has completed several acquisitions and therefore added items such as cribs,nursery, baby gear, infant sleep positioners, head supports, portable changing pads, as well as nurseryfeeding, play and feeding accessories.furniture product categories. Most of our products are sold under our core brand names of Summer® and Born Free®. We also market certain products under license agreements.

        Our products are sold globally primarily to U.S.large, national retailers includingas well as independent retailers. In North America, our customers include Babies R Us, Wal-Mart, Target, KMart,Amazon.com, Burlington Coat Factory, Buy Buy Baby, Meijer, BabyKmart, Home Depot, (Burlington Coat Factory) and Wal-Mart.Lowe's. Our largest European-based customers are Mothercare, Toys R Us, Argos and Tesco. We also sell through several international representatives to select international retail customers in geographic locations where we do not have a direct sales presence.

        The juvenile products industry is estimated to be $12 billion worldwide and consumer focus is on quality, safety, innovation, and style. Due to the halo effect of baby products in retail stores, there also is a strong retailer commitment to the juvenile category.

        Our principal executive office is located at 1275 Park East Drive, Woonsocket, Rhode Island 02895. Our telephone number is 401-671-6550. Our internet address is www.summerinfant.com. We maintain through SIE a sales, marketing and distribution officeoffices in Canada, Australia and England, which services the United Kingdom and other parts of Europe. SIE's largest customers are Mothercare, Toys R Us, Argos, and Tesco. In 2009, Summer Infant (USA), including international sales managed out of the U.S., accounted for approximately 90% of total Company revenue.

We maintain through SIA a product development, sales, engineering and quality assurance office.office in Hong Kong.

Table of Contents

Strategy

        At the end of fiscal 2012, we began a review of our business strategy and product lines. Historically, we have focused on growing sales through a combination of increased product penetration and store penetration, offering new products, adding new mass merchant retail customers and distribution channels, international expansion, and acquisitions. As a result of our ongoing review, we are refining our business strategies to focus on our core strengths and to improve profitability.

        While our business strategy review is ongoing, we have identified key areas of our strategy going forward. Our strategy is focused on our core strengths as a supplier of innovative and high quality juvenile products with a commitment to growprovide excellent customer service to our sales throughcustomers. Focus and execution with be a varietycore mantra of methods, including:the Company driving future growth and profitability and further development and support of our relationships with both retails partners and end-users of our products. By renewing our focus on these core strengths, we expect to drive future growth and improved profitability and to further develop and strengthen our relationships with retail partners and end-users of our products based on the following key strategies:

•

increasedContinuing Innovation—We will continue to leverage our in-depth knowledge of our customers and end-user consumers to deliver high quality, innovative products to the marketplace. We also will continue to focus on a "good, better, best" approach to price points to create products that appeal to different categories of end consumers. To the extent it is consistent with our strategy, we may acquire new products or expand existing product penetration (more products at each store);categories. We believe our product development expertise differentiates us from other companies in this market.



•

increased store penetration (moreCultivating Relationships—We believe we have strong relationships with our customers and suppliers. We have long-standing, solid partnerships with each of our retail partners. We also have developed strong relationships with a group of suppliers that provide us with flexibility needed to engineer our products in a cost-efficient manner and to respond quickly to customer demands, We will continue to focus on building on these existing relationships to increase our presence in these stores within eachand to expand with our customers as they enter new geographic locations. We will also continue to work with a growing number of specialty retail customer);operators that would permit us continue our pursuit of a "good, better, best" approach and access to customers seeking differentiated products and support.



•

newBuilding Brands—Historically, we have marketed products (at existingunder our own brands, under license agreements for other brands, or under private label agreements. Going forward, our focus will be on building our core brands of Summer® and new customers);Born Free®, particularly among first-time prenatal moms, through improved marketing, including through social media.



•

new mass merchant retail customers;



•

new distribution channels (foodExecuting Operational Excellence—Our entire organization is focused on delivering operational excellence, and drug chains, price clubs, home centers, web-based retailers);



•

new geographies (international expansion);



•

newwe have already begun initiatives, such as SKU rationalization and implementation of a direct import program, that we expect to favorably impact our operations while also providing improved results. By improving our analytic and forecasting capabilities, product categories;development process, and



•

acquisitions. managing working capital and costs, we expect to improve internal processes that should, in turn, benefit our customers.

        We have been ablebelieve that, based on our core strengths and strategic priorities, we are well-positioned to grow our annual revenues historically through a combinationcapitalize on positive market trends, including that U.S. birth rates are predicted to increase in 2013 after several years of all of the above factors. Each year, we have been able to expand the number of products in our main distribution channel, mass merchant retailers, and have also added new customers each year. Therefore, even without new product introductions, we could grow our business by simply selling more of our existing product line to existing customers.

        In the future, our growth strategy will be to continue to develop and sell new products to our existing customer base, sell new and existing products to new customers (or expand relationships with existing customers), to expand our sales of products from our soft goods product line, and to expand in the UK and in other geographic regions (including Japan, Mexico and Australia, among others). In addition, there are a number of potential acquisition candidates that could be pursued in order to obtain new innovative products, new product categories, new retail customers or new sales territories. There are approximately 400 active juvenile product companies, of which approximately 300 have less than $10 million in sales. In addition, there are various product categories that we do not currently compete in, including car seats, walkers, strollers, and other categories. We may look to develop our own products in these categories or attempt to gain entrance into these categories through acquisitions.low birth rates.

Products

        We sellcurrently market more than 1,100 products in a number of differentseven product categories including: Infant bath products;including monitoring, health and safety, gates; audionursery, baby gear, feeding products, play, and video monitors; high chairs and other baby "gear"; infant bedding; cribs and nursery furniture; swaddling blankets; and many other categories. Most of the products are sold under the Summer Infant brand; the Company also has several licensing arrangements to sell products under different brands.furniture. No single product sold generated more than 10% of sales for the year ended December 31, 2009.2012. The majority of our products are sold under the Summer® and Born Free® brands.

Table of Contents

        We have also marketed certain products under licenses with Carter's®, Garanimals®, and Disney®. Anchor products in our seven product categories are as follows:

Product Development and Design

        Our management believes that productProduct development isdrives innovation, a critical element of our strategy and success to date. Our product strategy isWe strive to produce proprietary products that provideoffer distinctive benefits, are visually appealing, provide convenience and will appeal to the mid-tier and upper-tier buyers.consumers. Our U.S. retailersretail customers are strategically motivated to buy innovative up-market products. Ourproducts in order to provide differentiation from their competitors. We design the majority of our own products and our main product development efforts are located at our Rhode Island corporate office, but weheadquarters. We also have development efforts in China Colorado, South Carolina, Pennsylvania, and the United Kingdom. In addition to new product development, we continuously look for ways to improve upon existing products based on feedback from our customers and focus on the end-user experience, safety, and opportunities to improve our cost structure and pricing.

Table        We engage in market research and test marketing to evaluate consumer reactions to our products. We also research customer buying trends and analyze information from retail stores, our sales force, focus groups, industry experts, vendors, and our product development personnel. We continually analyze our products to determine whether they should be upgraded, modified, and/or discontinued.

        In 2012, we introduced our new Peek™Plus internet baby monitor system and re-launched our Born Free line of Contentsfeeding products including baby bottles, drinking cups, sterilizing systems, and bottle warming systems. In 2013, we plan to re-launch our PRODIGY™ travel system with new fashion and an improved stroller platform and our next generation fully internet capable monitor system, Peek2®, which will have applications beyond the juvenile market.

Suppliers and Manufacturing

        Except for certain injection-molded bath tubs, potty seats and gates, which are manufactured in the U.S., substantiallySubstantially all of our other products are manufactured in Asia (particularly(primarily China). and Israel. We also use many different suppliersseveral manufacturers in the United States for certain injection molded products, including bath tubs, potty seats and we ownbooster seats, which typically account for approximately 15% of our molds. Therefore, weannual sales.

        We are not dependent on any one manufacturer. SIAsupplier since we use many different manufacturers and we own the tooling and molds used for our products. Our Hong Kong subsidiary provides us with a local sourcing presence and the ability to oversee quality, electronic engineering and other issues that may arise during production. Generally, we buy finished goods from manufacturers and thus are not directly procuring raw materials for product manufacturing. Historically, we have not experienced any significant disruption of supply to date as a result of raw material shortages or other manufacturing factors, but there is the possibility that shortages could occur in the future based on a variety of factors beyond our control.

        Transportation of Asia-made goods to our warehouses typically takes three to four weeks, depending on the location of the warehouse. We maintain our inventory at warehouses located in the

Table of Contents

United States, Canada, Asia, and the United Kingdom. Most of our customers pick up their goods at regional warehouses. We also use UPS and other common carriers to arrange shipments to customers who request such arrangements, primarily(primarily smaller retailers and specialty stores.

        We use several manufacturersstores) that request such arrangements. In 2011, our East Coast distribution center was consolidated into our West Coast distribution center to reduce costs. In 2012, we implemented a direct import program which we are expanding in the U.S. for our injection molded products that account for between 10%2013, in order to reduce costs and 15% of our annual net sales.shipping time to customers.

Sales and Marketing

        Our products are largely marketed and sold through our own direct global sales are primarily derived fromforce, which includes industry experienced professionals. We have also established a strong network of independent manufacturers' representatives and distributors, who provide sales and customer service support for the saleremaining portion of juvenile health, safetyNorth American and wellness products andinternational sales. On-line sales have continued to grow during recent years consistent with increased online shopping by consumers.

        Sales are recognized upon transfer of title of product to our customers. Our products are marketedcustomers and sold through several distribution channels including chain retailers, specialty retailers and direct to consumers.

        Sales are made utilizing standard credit terms of 30 to 60 days. We generally accept returns only for defective merchandise.

        Marketing, promotion and consumer education are important parts of the juvenile products industry. Historically, a significant percentage of our promotional spending has been structured in coordination with our large retail partners. For 2013, our plans include increasing opportunities to create awareness and outreach to both our retail partners and our end-use consumer. In further support of this communication effort, we have recently added additional functionality and capabilities to our website.

        In addition, we will continue to support the promotion and presence of Summer brands and products in the marketplace with our new showroom and planogram space at our principal facilities in Woonsocket, RI, continued participation at select industry trade shows, trade and consumer advertising, as well as enhanced internet based promotional activities.

        Customer service is a critical component of our marketing strategy. We maintain an internal customer service department that responds to customer inquiries, investigates and resolves issues and generally assists customers and/or consumers.

Competition

        The juvenile health, safety and wellnessproduct industry has many participants, none of which have dominant market share, though certain companies have disproportionate strength in certain product segments. We compete with a number of different competitors, depending on the product category, and compete against no single company across all of our product categories. Our largest direct competitors are Dorel Industries (Safety(including Safety 1st and Cosco brands), Evenflo (Evenflo, Gerry, and Snugli brands), Kid Brands, Inc., Fisher-Price (part of Mattel, Inc.), The First Years (a subsidiary of RC2Tomy Corporation) and Graco (a subsidiary of Newell Rubbermaid). In addition, we compete in certainseveral of our product lines with a number of private companies, such as KidCo, Inc. and Munchkin.

        The primary methods of competition in the industry consist of product innovation, brand positioning, quality, price timely distribution, and other factors such as timely distribution.factors. Our competitive strengths include our experienced product development staff,expertise, our ability to develop innovative new products, brand positioning, relationships with major retailers, and the quality and pricing of our products.

Intellectual Property

        We rely on a combination of patents, licenses and trade secrets to protect our intellectual property. Our patents currently in effect include various design features related to bedrails, infant seats, bouncers, and potty chairs, with several other patents pending for monitors, baby swings, and other

Table of Contents

items. The patents expire at various times overduring the next 20 years. Our focus on continuous product improvement and innovation provides constant strength and renewal of our patent portfolio, well before expiration dates. We also have license agreements relating to the use of patented technology owned by third parties in certain of our products.

Customers

        Our top 10seven customers in North America and the United Kingdom together comprised over 80%more than 74% of our sales in fiscal 2009. Some of these2012 and fiscal 2011. These customers include Babies R Us/Toys R Us, Wal-Mart, Target, K-Mart,Amazon.com, Burlington Coat Factory, Buy Buy Baby, and Wal-Mart in North America,K-Mart. Of these customers, three generated more than 10% of sales for fiscal 2012: Toys R Us (32%), Walmart (18%) and inTarget (10%). Three customers generated more than 10% of sales for fiscal 2011: Toys R Us (39%), Walmart (11%) and Target (10%).

        We have no long-term contracts with these customers and because of the United Kingdom, Mothercare.

Tableconcentration of Contentsour business with these customers, our success depends on our customers' willingness to purchase and provide shelf space for our products.

Seasonality

        There areWe do not see significant variations in seasonal demand for our products. Sales to our retail customers are generallyhistory has exhibited some higher in the time frame when retailers takevolume at times associated with initial shipments of new products. These orders usually incorporate enough product inventory to fill each store plus additional amounts to be kept at the customer's distribution center. The timing of these initial shipments varies by customer depending on when they finalize store layouts for the upcoming year, and whether there are any mid-year product introductions.

Geographic Regions

        In 2009, Summer Infant (USA), including international sales managed out of the U.S.,2012 and 2011, North America accounted for approximately 93% and 90%, respectively, of our total Company revenue;net sales; the remaining sales were made in Canada, the United Kingdom and all other geographies.

Regulatory Matters

        We obtain all necessary regulatory agency approvals for each of our products. In the U.S., these approvals may include, among others, one or more of the following: Consumer Product Safety Commission ("CPSC"), the American Society of Test Methods ("ASTM"), the Juvenile Products Manufacturing Association ("JPMA"), the Federal Communications Commission ("FCC") and the Food and Drug Administration ("FDA"). We conduct our own internal testing, which utilizes a "foreseeable use and abuse" testing method and is designed to subject each product to the "worst case scenario." Our products are also frequently tested by independent government certified labs.

Insurance

        We carry a product liability insurance policy that provides us with $10,000,000$15,000 of liability coverage with a minimal deductible. We consult with our insurers to ascertain appropriate liability coverage for our product mix. We anticipate increasingbelieve our insurancecurrent coverage is adequate for our existing business and will continue to evaluate our coverage in the future in line with our expanding sales and product breadth.

Table of Contents

Employees

        As of December 31, 2009,2012, we employed a total of 178237 full time people, 107133 of whom work in the headquarters and distribution centers in Rhode Island. Our employees are not covered by a collective bargaining agreement. We consider our employee relations to be good.

Available Information

        We maintain our corporate website atwww.summerinfant.com and we make available, free of charge, through this website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports that we file with or furnish to the Securities and Exchange Commission ("SEC"), as soon as reasonably practicable after we electronically file that material with, or furnish it to, the SEC. Information onOur website also includes corporate governance information, including our website is not partCode of this report. This report includes all material information about us that is included onEthics and our website and is otherwise required to be included in this report.Board Committee Charters.

Table of Contents

Item 1A.    Risk Factors

        If any of the events or circumstances described in the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. In those cases, the trading price of our common stock could decline.

The concentration of our business with a base of retail customers that make no binding long-term commitments means that economic difficulties or changes in the purchasing policies of our major customers could have a significant impact on our business.

        A small number of large, retail customers account for a majority of our net sales. The customer that generated more than 10% of net sales for the year ended December 31, 2009 was In fiscal 2012, Babies R Us/Toys R Us (52%generated 32% of net sales). Becauseour total sales, and a total of seven customers accounted for more than 74% of our total sales. We have no long-term contracts with these customers and because of the significant concentration of our business with this customer and because we have no long term contracts with this customer,these customers, our success depends on our customers' willingness to continue to purchase and provide shelf space for our products. An adverse change in our relationship with any of our large customers or a change in the financial viability of any of these customers could adversely affect our results of operations and financial condition.

Liquidity or other financial problems of our key customers could have a significant adverse effect on our business, financial condition and results of operations.

        Sales we make to customers are typically made on credit without collateral. There is a risk that key customers will not pay, or that payment may be delayed, because of contraction of credit availability to such customers, weak retail sales or other factors beyond our control, which could increase our exposure to losses from bad debts. In addition, if key customers were to cease doing business or significantly reduce the number of stores operated, it could have a significant adverse effect on our business, financial condition, and results of operations.

Our ability to grow and compete will be harmed if we do not successfully satisfy consumer preferences, enhance existing products, develop and introduce new products, and achieve market acceptance of those products.

        Our business and operating results depend largely upon the appeal of our products.products to the end user; consumers. Consumer preferences, particularly among parents whowhom are often the end purchasers of our products, are constantly changing. Our success will, in large part, dependlargely depends on our ability to identify emerging trends in the infant and juvenile health, safety and wellness marketplace, and to design products that address consumer demand and prove safe and cost effective. Our product offerings compete with those of many other larger companies. Many of these companies many of which are much larger and enjoy broaderbroad brand recognition and significant distribution channel relationships, which means thatand as a result our market position is always at risk.

Table of Contents

        Our ability to maintain and increase our current market share will depend upon our ability to anticipate changes in consumer preferences and satisfy these preferences, enhance existing products, develop and introduce new products and establish and grow distribution channels for these products, and ultimately achieve market acceptance of these products.

An inability to develop and introduce planned new products or product lines in a timely and cost-effective manner may damage our business.

        In developing new products and product lines, we have anticipated dates for the associated product introductions. When we state that we will introduce, or anticipate introducing, a particular product or product line at a certain time in the future those expectations are based on completing the associated development, implementation, and marketing work in accordance with our currently anticipated development schedule. There is no guarantee that we will be able to manufacture, source and ship new products in a timely manner and on a cost-effective basis to meet constantly changing customer demands. The risk is also heightened by the sophistication of certain products we are designing, in terms of combining digital and analog technologies, utilizing digital media to a greater degree, and providing greater innovation and product differentiation. Unforeseen delays or difficulties in the development process, significant increases in the planned cost of development, or changes in anticipated consumer demand for our products may cause the introduction date for products to be later than anticipated or, in some situations, may cause a product introduction to be discontinued.

The intense competition in our markets could reduce our net sales and profitability.

        We operate in a highly competitive market and compete with several large domestic and foreign companies and with other producers of infant and juvenile products. Many of our competitors have longer operating histories, greater brand recognition, and greater financial, technical, marketing and other resources than us. In addition, we may face competition from new participants in our markets because the infant and juvenile product industry has low barriers to entry. We experience price competition for our products, competition for shelf space at retailers and competition for licenses, all of which may increase in the future. If we cannot compete successfully in the future, our net sales and profitability will likely decline.

We rely on external financing to help fund our operations. Covenants in our debt agreements may affect our liquidity or limit our ability to complete acquisitions, incur debt, make investments, sell assets, merge or complete other significant transactions.

        In order to meet our working capital needs, we rely on our revolving credit facility for working capital. In 2013, we entered into a new credit agreement expiring in 2018, which provides for a $80 committed asset-based revolving credit facility and a loan agreement for a $15 million secured term loan. These credit agreements contains certain covenants that place limitations on or restrict a number of our activities, including our ability to:

•

incur additional debt;



•

create liens on our assets or make guarantees;



•

make certain investments or loans;



•

pay dividends; or



•

dispose of or sell assets or enter into a merger or similar transaction.

        In addition, our debt agreements contain financial covenants that were set at the time we entered into the agreement. Our performance and financial condition may not meet our original expectations, causing us to fail to meet such financial covenants. These restrictive covenants may limit our ability to

Table of Contents

engage in acts that may be in our best long-term interests. Non-compliance with the covenants in our debt agreements could result in us being unable to utilize borrowings under our revolving credit facility, a circumstance which potentially could occur when operating shortfalls would most require supplementary borrowings to enable us to continue to fund our operations. If we are unable to generate sufficient available cash flow to service our outstanding debt we would need to refinance such debt or face default. There is no guarantee that we would be able to refinance debt on favorable terms, or at all.

Deviations from expected results of operations and expected cash requirements could result in a failure to meet financial covenants under our debt agreements which would adversely affect our financial condition and results of operations.

        Any significant deviation in actual results from our expected results of operations, any significant deviation in the timing of material expenditures from current estimates, any significant business or product acquisitions, or other significant unanticipated expenses could result in our not meeting our financial covenants under the terms of our credit facility and term loan and the lenders could declare a default, which would have a material adverse effect on our financial condition and results of operations. If actual events, circumstances, outcomes and amounts differ from judgments, assumptions and estimates made or used in determining the amount of certain assets (including the amount of recoverability of property, plant and equipment, intangible assets, valuation allowances for receivables, inventories and deferred income tax assets), liabilities (including accruals for income taxes and liabilities) and or other items reflected in our consolidated financial statements, it could adversely affect our results of operations and financial condition. If access to our credit facility is limited or terminated, our liquidity would be constrained, affecting our operations and growth prospects, and we would need to seek additional equity or debt financing. There is no assurance that such financing would be available on acceptable terms or at all. Furthermore, any equity financing may result in dilution to existing stockholders and any debt financing may include restrictive covenants that could impede our ability to effectively operate and grow our business in the future.

We are dependent on key personnel, and our ability to grow and compete in our industry will be harmed if we do not retain the continued services of our key personnel, or we fail to identify, hire, and retain additional qualified personnel.

        We are dependent on the efforts of our management team, particularly our Chief Executive Officer, and the loss of services of members of our management team each of whom haswith substantial experience in the infant and juvenile health, safety and wellness markets could have an adverse effect on our business. If any members of management leave, their departure could have an adverse effect on our operations and could adversely affect our ability to design new products and to maintain and grow the distribution channels for our products.business.

        In addition, if our operations continuewe expect to grow in a manner consistent with our historical growth rates,operations, it will be necessary for us to attract and retain additional qualified personnel. The market for qualified and talented product development personnel in the consumer goods market, and specifically in the infant and juvenile health, safety and wellness products market, specifically is intensely competitive. If we are unable to attract or retain qualified personnel as needed, the growth of our operations could be slowed or hampered. However, we believe that Summer Infant's compensation including salary, performance-based bonuses, and stock award programs provides incentives that are competitive within our industry.

Table of Contents

Intellectual property claims relating to our products could increase our costs and adversely affect our business.

        We have, from time to time, received claims of alleged infringement of patents relating to certain of our products, and we may face similar claims in the future. These claims relate to alleged patent infringement and are primarily the result of newly issued patents that were not in force when we initially brought the subject products to market. The defense of intellectual property claims can be costly and time consuming, even in circumstances where the claim is without merit. We may be required to pay substantial damages or settlement costs in order to resolve these types of claims. In addition, these claims could materially harm our brand name, reputation and operations.

We rely on foreign suppliers in Asia to manufacture the majority of our products, and any adverse change in our relationship with our suppliers could harm our business.

        We rely on numerous third-party suppliers located in Asia for the manufacture of most of our products. While we believe that alternative suppliers could be located if required, our product sourcing could be affected if any of these suppliers do not continue to manufacture our products in required quantities or at all, or with the required levels of quality. We enter into purchase orders with our foreign suppliers and do not enter into any long termlong-term supply contracts. In addition, difficulties

Table of Contents

encountered by these suppliers, such as fire, accident, natural disasters, outbreaks of contagious diseases, or political unrest, could halt or disrupt production at the affected locations, resulting in delay or cancellation of orders. Any of these events could result in delayed deliveries by us of our products, causing reduced sales and harm to our reputation and brand name.

Increases in the cost of materials or labor used to manufacture our products could decrease our profitability and therefore negatively impact our business and financial condition.

        Because our products are manufactured by third-party suppliers, we do not directly purchase the materials used in the manufacture of our products. However, the prices paid by us to these suppliers could increase if raw materials, labor, or other costs increase. If we cannot pass these increases along to our customers, our profitability will be adversely affected.

Because we rely on foreign suppliers and we sell in to foreign markets, we are subject to numerous risks associated with international business that could increase our costs or disrupt the supply of our products, resulting in a negative impact on our business and financial condition.

        Our international operations subject us to risks, including:

•

economic and political instability,



•

restrictive actions by foreign governments,



•

greater difficulty enforcing intellectual property rights and weaker laws protecting intellectual property rights,



•

changes in import duties or import or export restrictions,



•

timely shipping of product and unloading of product through West Coast ports, as well as timely truck delivery to our warehouses,



•

complications in complying with the laws and policies of the United States affecting the importation of goods, including duties, quotas, and taxes, and



•

complications in complying with trade and foreign tax laws.

        Any of these events or circumstances could disrupt the supply of our products or increase our expenses. Because of the importance of our international sourcing of manufacturing to our business, our financial condition and results of operations could be significantly harmed if any of the risks described above were to occur or if we are otherwise unsuccessful in managing our global operations.

TableIntellectual property claims relating to our products could increase our costs and adversely affect our business.

        We have, from time to time, received claims of Contentsalleged infringement of patents relating to certain of our products, and we may face similar claims in the future. These claims relate to alleged patent infringement and are primarily the result of newly-issued patents that were not in force when we initially brought the subject products to market. The defense of intellectual property claims can be costly and time consuming, even in circumstances where the claim is without merit. We may be required to pay substantial damages or settlement costs in order to resolve these types of claims. In addition, these claims could materially harm our brand name, reputation and operations.

Product liability, product recalls, and other claims relating to the use of our products could increase our costs.

        Because we sellproduce infant and juvenile health, safety and wellness consumer products, to consumers, we face product liability risks relating to the use by consumers of our products. We also must comply with a variety of product safety and product testing regulations. In particular, our products are subject to the Consumer Product Safety Act, the Federal Hazardous Substances Act ("FHSA") and the Consumer

Table of Contents

Product Safety Improvement Act ("CPSIA"), which empower the Consumer Product Safety Commission (the "CPSC"), to take action against hazards presented by consumer products. With expanded authority under the CPSIA, the CPSC has and continues to adopt new regulations for safety and products testing that apply to our products. These new regulations have or likely will significantly increase the regulatory requirements governing the manufacture and sale of children's products and increase the potential penalties for noncompliance with applicable regulations. The CPSC has the authority to exclude from the market and recall certain consumer products that are found to be potentially hazardous. Consumer product safety laws also exist in some states and cities within the United States and in Canada and Europe, as well as certain other countries. If we face a product liability or other claim or fail to comply with these laws and regulations, or if we face product liability claims, we may be subject to costly litigations, damage awards fines or settlement costs that exceed ourany available insurance coverage. We also wouldcoverage and we may incur significant costs in complying with recall requirements. Furthermore, concerns about potential liability may lead us to recall voluntarily selected products. For instance in 2011, we undertook voluntary action to re-label our audio/video nursery monitors and recorded a charge in connection with the settlement of outstanding litigation related to our analog video nursery monitors. Complying with existing or any product recall requirements. Even if a product liabilitysuch additional regulations or other claim is without merit, the claimrequirements could harm our reputation and divert management's attention and resources fromimpose increased costs on our business. Similarly, increased penalties for non-compliance could subject us to greater expense in the event any of our products were found to not comply with such regulations.

Competition inWe may have exposure to greater than anticipated tax liabilities, that, if not identified, could negatively affect our markets could reduce ourconsolidated operating results and net sales and profitability.worth.

        We operateOur provision for income taxes is subject to volatility and could be adversely affected by nondeductible equity-based compensation, earnings being lower than anticipated in highly competitive markets. We compete with several large domesticjurisdictions where we have lower statutory rates and foreign companiesbeing higher than anticipated in jurisdictions where we have higher statutory rates, transfer pricing adjustments, not meeting the terms and with other producersconditions of infant products. Manytax holidays or incentives, changes in the valuation of our competitors have longer operating histories, greater brand recognition,deferred tax assets and greater financial, technical, marketingliabilities, changes in actual results versus our estimates, or changes in tax laws, regulations, accounting principles or interpretations thereof, and taxes relating to deemed dividends resulting from foreign guarantees made by certain of our foreign subsidiaries. In addition, like other companies, we may be subject to examination of our income tax returns by the U.S. Internal Revenue Service and other resources thantax authorities. While we have. In addition, we may face competitionregularly assess the likelihood of adverse outcomes from new participants insuch examinations and the adequacy of our markets because the infant product industry has limited barriers to entry. We experience price competitionprovision for income taxes, there can be no assurance that such provision is sufficient and that a determination by a tax authority will not have an adverse effect on our products, competition for shelf space at retailers and competition for licenses, allresults of which may increaseoperations.

A material impairment in the future.carrying value of acquired goodwill or other intangible assets could negatively affect our consolidated operating results and net worth.

        A portion of our assets are intangible, which are reviewed on an annual basis and whenever events and changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If we cannot compete successfullythe carrying value of these assets exceeds the current fair value, the asset is considered impaired and is reduced to fair value, resulting in a non-cash charge to earnings during the period in which any impairment is determined. Events and conditions that could result in impairment include a sustained drop in the market price of our common stock, increased competition or loss of market share, product innovation or obsolescence, or a decline of our business related to acquired companies. In 2012, we recorded an aggregate non-cash impairment charge of $69,796, consisting of a write down of goodwill of $61,908 and a write down of a portion of intangible assets of $7,888. We cannot accurately predict the amount and timing of any future our net sales and profitability will likely decline.impairment of assets.

Table of Contents

We may experience difficulties in identifying suitable acquisition targets and integrating strategic acquisitions.

        As part of our growth strategy,In the past, we intendhave made strategic acquisitions and continue to pursue acquisitions that are consistent with our mission and enable us to leverage our competitive strengths. TheWhile we continue to evaluate potential acquisitions, we may not be able to identify and successfully negotiate suitable acquisitions, obtain financing for future acquisitions on satisfactory terms, obtain regulatory approval for certain acquisitions or otherwise complete acquisitions in the future. An inability to identify future acquisitions could limit our future growth.

        In addition, the integration of acquiredoperations of those companies and their operationswe do acquire into our operations involves a number of risks, including:

•

the acquired business may experience losses that could adversely affect our profitability;



•

unanticipated costs relating to the integration of acquired businesses may increase our expenses;



•

possible failure to obtain any necessary consents to the transfer of licenses or other agreements of the acquired company;business;



•

possible failure to maintain customer, licensor and other relationships after the closing of the transaction of the acquired company;business;



•

difficulties in achieving planned cost-savings and synergies may increase our expenses or decrease our net sales;



•

diversion of management's attention could impair their ability to effectively manage our business operations; and



•

unanticipated management or operational problems or liabilities may adversely affect our profitability and financial condition.

        In addition, any future acquisitions or investments may result in:

•

issuances of dilutive equity securities, which may be sold at a discount to market price;



•

impairment of goodwill;



•

use of significant amounts of cash;



•

the incurrence of debt;



•

the assumption of significant liabilities;



•

unfavorable financing terms;



•

large one-time expenses; and

Table of Contents

•

the creation of intangible assets, including goodwill, the write-down of which may result in significant charges to earnings.

Our debt covenantsstock price has been and may limit our abilitycontinue to complete acquisitions, incur debt, make investments, sell assets, merge or complete other significant transactions.be volatile.

        Our loan agreements include provisions that place limitations on a number of our activities, including our ability to:

•

incur additional debt;



•

create liens on our assets or make guarantees;



•

make certain investments or loans;



•

pay dividends; or



•

dispose of or sell assets or enter into a merger or similar transaction.

We could issue additional common stock, which might dilute the book value of our common stock.

        Our board of directors has authority, without action or vote of our stockholders in most cases, to issue all or a part of our authorized but unissued shares. These stock issuances could be made at a price that reflects a discount from the then-current tradingThe market price of our common stock. In addition,stock has been, and is likely to raise capital,continue to be, volatile. When we may need to issue securities that are convertible into or exchangeable for a significant amountour competitors announce new products, experience quarterly fluctuations in operating results, announce strategic relationships, acquisitions or dispositions, change earnings estimates, published financial results or other material news, our stock price is often affected. The volatility of our common stock. These issuances would dilute current shareholders' ownership percentagestock price may be accentuated during periods of low volume trading, which would have the effect of reducing their influence on matters on which stockholders vote, and could dilute the book value of Summer Infant common stock. Stockholders may incur additional dilution if holders of stock options, whether currently outstanding or subsequently granted, exercise their options, or if warrant holders exercise their warrants to purchase shares of Summer Infant common stock.

As a "thinly-traded" stock, large sales can place downward pressure on our stock price.

        Our common stock experiences periods when it could be considered "thinly traded." Finance transactions resulting in a large amount of newly issued shares that become readily tradable, or other events that cause current stockholders to sell shares, could place downward pressure on the trading price of our stock. In addition, the lack of a robust resale market may require a stockholder wishing to sell a large number of shares to do so in increments over time to mitigate any adverse impact of the sales on the market price of our stock.

Table of Contents

We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of that technology could harm our ability to effectively operate our business.

        We rely on information technology systems across our operations, including for management of its supply chain, sale and delivery of its products, and various other processes and transactions. Our ability to effectively manage our business and coordinate the production, distribution, and sale of its products depends on the reliability and capacity of these systems and in some instances third-party service providers. The failure of these systems to operate effectively due to service interruptions, problems with transitioning to upgraded or replacement systems, or a breach in security of these systems could cause delays in product sales and reduced efficiency of our operations, and capital investments could be required to remediate the problem.

Anti-takeover provisions in our organizational documents and Delaware law may limit the ability of our stockholders to control our policies and effect a change of control of our company and may prevent attempts by our stockholders to replace or remove our current management, which may not be in your best interests.

        There are provisions in our certificate of incorporation and bylaws that may discourage a third party from making a proposal to acquire us, even if some of our stockholders might consider the proposal to be in their best interests, and may prevent attempts by our stockholders to replace or remove our current management. These provisions include the following:

•

our certificate of incorporation provides for three classes of directors with the term of office of one class expiring each year, commonly referred to as a staggered board. By preventing stockholders from voting on the election of more than one class of directors at any annual meeting of stockholders, this provision may have the effect of keeping the current members of our board of directors in control for a longer period of time than stockholders may desire;

Table of Contents

•

our certificate of incorporation authorizes our board of directors to issue shares of preferred stock without stockholder approval and to establish the preferences and rights of any preferred stock issued, which would allow the board to issue one or more classes or series of preferred stock that could discourage or delay a tender offer or change in control; and



•

our bylaws require advance written notice of stockholder proposals and director nominations.

        Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which, in general, imposes restrictions upon acquirers of 15% or more of our stock. Finally, the board of directors may in the future adopt other protective measures, such as a stockholder rights plan, which could delay, deter or prevent a change of control.

The global economic downturn could result in a reduced demand for our products and increased volatility in our stock price.

        Current uncertainty in global economic conditions pose a risk to the overall economy as consumers and retailers may defer or choose not to make purchases in response to tighter credit and negative financial news, which could negatively affect demand for our products. Additionally, due to the weak economic conditions and tightened credit environment, some of our retailers and distributors may not have the same purchasing power, leading to lower purchases of our products for placement into distribution channels. Consequently, demand for our products could be materially different from expectations, which could negatively affect our profitability and cause our stock price to decline.

Item 1B.    Unresolved Staff Comments

        None.

Item 2.    Properties

        We are headquartered in a 52,000 square facility in Woonsocket, Rhode Island. We have a seven year lease on this facility, with an option to extend for an additional five years.

We have a 36 month, 3,750 square footalso lease for office spacesmall offices in South Carolina, which expires in 2012. We have a 24 month lease for office space in Hong Kong, which expires in 2011, as well as a 60 month lease for office space inArkansas, Canada, Israel, the United Kingdom which expires in 2012.and Hong Kong.

        We maintain inventory at leased warehouses in California (approximately 220,000 square feet, which includes two warehouses), Rhode Island (approximately 104,000442,000 square feet), Canada (approximately 31,000 square feet), Hong Kong (third party warehouse) and the UKUnited Kingdom (approximately 16,000 square feet). These leases expire at various times between 20102013 and 2013.2016.

Table of Contents

Item 3.    Legal Proceedings

        None.From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

        Please see "Litigation" under Note 11. Commitments and Contingencies to our consolidated financial statements included in this report.

Item 4.    Submission of Matters to a Vote of Security HoldersMine Safety Disclosures

        No matter was submitted to a vote of our stockholders during the fourth quarter of the year ended December 31, 2009.

Table of ContentsNot applicable.

PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Price Range of Common Stock

        On March 7, 2007, ourOur common stock warrants and units commenced listingis traded on the Nasdaq Capital Market under the symbolssymbol "SUMR", "SUMRW" and "SUMRU", respectively.

        On March 17, 2008, we announced that effective March 28, 2008, the units will be separated into its component securities, consisting of one share of common stock and two warrants. As a result, beginning on March 28, 2008, the units ceased trading. The warrants expired on April 20, 2009..

        The high and low closing prices for our common stock as reported on the Nasdaq Capital Market for the periods indicated below were as follows:

Holders of Common Stock

        As of January 25, 2010,March 1, 2013, there were approximately thirteen shareholders47 holders of record of our common stock. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of record holders.

Dividend Policy

        There have been no cash dividends declared on our common stock since our company was formed. Dividends are declared at the sole discretion of our Board of Directors. Our intention is not to declare cash dividends and retain all cash for our operations.operations and future acquisitions. In addition, under the terms of our current loan agreement, we are restricted in our ability to pay cash dividends to our stockholders.

Issuer Repurchases of Equity Securities

        On October 9, 2007, we made a tender offer to all holdersNone.

Table of our warrants to repurchase each warrant for $1.00. The tender offer expired on November 8, 2007. The total number of warrants purchased in the tender offer was 14,766,047. All of the warrants which remained after the tender offer expired on April 20, 2009.Contents

UnregisteredRecent Sales of EquityUnregistered Securities

        In connection with the acquisition of the assets of Butterfly Living, LLC ("Butterfly") on July 17, 2009, the Company issued to Butterfly 213,675 shares (the "Butterfly Shares") of the Company's common stock, par value $0.001 per share in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The Butterfly Shares were issued at fair market value in partial consideration for the purchase by the Company of substantially all of the assets of Butterfly. The offer and sale of these shares of common stock was made to "accredited investors," as defined in Rule 501 under the Securities Act, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act.Not applicable.

Item 6.    Selected Consolidated Financial Data

N/A

Table of Contents        Not required.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations (dollar amounts in thousands, except share and per share data)

        The following discussion is intended to assist in the assessment of significant changes and trends related to our results of operations and financial condition. The information contained in this section has been derived from our consolidated financial statements and should be read together with our consolidated financial statements and related notes included elsewhere in this filing.report. Readers are also encouraged to review and consider our disclosures describing various factors that could affect our business, including the disclosures under the heading "Risk Factors" in this report.

        The following discussion is intended to assistNote that all dollar amounts in the assessmentthis Item 7 are in thousands of significant changesU.S. dollars, except share and trends related to our results of operations and financial condition. This discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto included herein. Our business has grown organically in all of our markets. We derive our revenues from the sale of health, safety and wellness products for infants and toddlers. Our revenue is driven by our ability to design and market desirable products, identify business opportunities and secure new and renew existing distribution channels. Our income from operations is derived from our ability to generate revenue and collect cash in excess of labor and other costs of providing our products and selling, general and administrative costs.per share data.

Company Overview

        WeFounded in 1985 and publicly traded on the Nasdaq Stock Market since 2007 under the symbol "SUMR," we are a global designer, marketer, and distributor of branded juvenile health, safety and wellness products which(for ages 0-3 years) that are sold principally to large North American and United KingdomEuropean retailers.

        We currently have more than 80 proprietarymarket our products in various product categories including nursery audio/video monitors, safety gates, durable bath products, bed rails, infant thermometers, relatedthe monitoring, health and safety, products, booster and potty seats, cribs,nursery, baby gear, bouncersfeeding, play and soft goods/bedding.furniture product categories. Most of our products are sold under our core brand names of Summer® and Born Free®. We also market certain products under license agreements.

        Our products are sold globally primarily to large, national retailers as well as independent retailers. In North America, our customers include Babies R Us, Wal-Mart, Target, Amazon.com, Burlington Coat Factory, Buy Buy Baby, Kmart, Home Depot, and Lowe's. Our largest European-based customers are Mothercare, Toys R Us, Argos and Tesco. We also sell through several international representatives to select international retail customers in geographic locations where we do not have a direct sales presence.

        The juvenile products industry is estimated to be $12 billion worldwide and consumer focus is on quality, safety, innovation, and style. Due to the halo effect of baby products in retail stores, there also is a strong retailer commitment to the juvenile category.

Strategy

        At the end of fiscal 2012, we began a review of our business strategy is to grow ourand product lines. Historically, we have focused on growing sales through a variety of methods, including:

•

increased product penetration (more products at each store);



•

increased store penetration (more stores within each retail customer);



•

new products (at existing and new customers);



•

new retail customers;



•

acquisitions;



•

new geographies (international expansion); and



•

new product categories.

        We have has been able to grow our annual revenues historically through a combination of allincreased product penetration and store penetration, offering new products, adding new mass merchant retail customers and distribution channels, international expansion, and acquisitions. As a result of our ongoing review, we are refining our business strategies to focus on our core strengths and to improve profitability.

        While our business strategy review is ongoing, we have identified key areas of our strategy going forward. Our strategy is focused on our core strengths as a supplier of innovative and high quality juvenile products with a commitment to provide excellent customer service to our customers. Focus and execution with be a core mantra of the above factors. Each year, we have been able to expand the number of products in our main distribution channel, mass merchant retailers,Company driving future growth and have also added new customers each year. Therefore, even without new product introductions, we could grow our business by simply selling moreprofitability and further development and support of our existing product line to existing customers.

        In the future, our growth strategy will be to continue to develop and sell new products to our existing customer base, sell new and existing products to new customers (or expand relationships with existing customers), expandboth retails partners and end-users of our sales of products fromproducts. By renewing our soft goods product line,focus on these core strengths, we expect to drive future growth and expand in the United Kingdom and in other geographic regions (including Japan, Mexico and Australia, among others). In addition, there are a number of potential acquisition candidates that could be pursued in order to obtain new innovative products, new product categories, new retail customers or new sales territories. There are approximately 400 active juvenile product companies, of which approximately 300 have less than $10 million in sales. In addition, there are various product categories that we do not currently compete in, including car seats, strollers, walkers, and other categories. We may look toimproved

Table of Contents

profitability and to further develop and strengthen our relationships with retail partners and end-users of our products based on the following key strategies:

•

Continuing Innovation—We will continue to leverage our in-depth knowledge of our customers and end-user consumers to deliver high quality, innovative products to the marketplace. We also will continue to focus on a "good, better, best" approach to price points to create products that appeal to different categories of end consumers. To the extent it is consistent with our strategy, we may acquire new products or expand existing product categories. We believe our product development expertise differentiates us from other companies in this market.


develop


•

Cultivating Relationships—We believe we have strong relationships with our customers and suppliers. We have long-standing, solid partnerships with each of our retail partners. We also have developed strong relationships with a group of suppliers that provide us with flexibility needed to engineer our products in a cost-efficient manner and to respond quickly to customer demands, We will continue to focus on building on these existing relationships to increase our presence in these stores and to expand with our customers as they enter new geographic locations. We will also continue to work with a growing number of specialty retail operators that would permit us continue our pursuit of a "good, better, best" approach and access to customers seeking differentiated products and support.



•

Building Brands—Historically, we have marketed products under our own productsbrands, under license agreements for other brands, or under private label agreements. Going forward, our focus will be on building our core brands of Summer® and Born Free®, particularly among first-time prenatal moms, through improved marketing, including through social media.



•

Executing Operational Excellence—Our entire organization is focused on delivering operational excellence, and we have already begun initiatives, such as SKU rationalization and implementation of a direct import program, that we expect to favorably impact our operations while also providing improved results. By improving our analytic and forecasting capabilities, product development process, and managing working capital and costs, we expect to improve internal processes that should, in these categoriesturn, benefit our customers.

        We believe that, based on our core strengths and strategic priorities, we are well-positioned to capitalize on positive market trends, including that U.S. birth rates are predicted to increase in 2013 after several years of low birth rates

Recent Developments

Goodwill and Intangible Asset Impairment

        Due to the sustained decrease in our results of operations (below forecasts) and stock price during the third quarter of 2012, we undertook an interim goodwill and intangible asset impairment analysis and engaged a third party to assist management in valuing goodwill and other intangible assets recorded on our balance sheet. As a result, management determined that the estimated fair value of certain indefinite lived intangibles and implied fair value of our goodwill were lower than their respective carrying value, and the Company recorded an aggregate non-cash impairment charge of $69,796 in 2012. The non-cash impairment charge consisted of a write down of goodwill of $61,908 and a write down of a portion of intangible assets of $7,888. These charges affected our financial condition and results of operation for 2012; however, they have no impact on our day-to-day operations or attempt to gain entrance into these categories through acquisitions.

        As we continue to grow through internal initiativesliquidity and will not result in any future acquisitions, we will incur additional expenses. Two of the key areas in which those increased expenses will likely occur are sales and product development. To grow sales, we will likely hire additional sales personnel to service new geographic territories, focus existing resources on specific parts of the United States market and retain product line specialists to drive sales of new and existing products in specific areas in which we believe we can readily increase sales. Product development expenses will increase as we develop new products in existing and new categories.

        If we were to acquire one or more companies as part of our growth strategy, we would face various challenges such as the integration of the acquired companies' product lines, employees, marketing requirements and information systems. Ongoing infrastructure investment also may be required to support realized growth, including expenditures with respect to upgraded and expanded information systems and enhancing our management team.

Sales

        Our revenues are primarily derived from the sale of juvenile health, safety and wellness products and are recognized upon transfer of title of product to our customers. Our products are marketed through several distribution channels including chain retailers, specialty retailers and direct to consumers.

        A number of large, retail customers account a majority of our net sales. The customer that generated more than 10% of net sales for the year ended December 31, 2009 was Toys R Us (52% of such net sales). Because of the concentration of our business with this customer and because we have no long term contracts with this customer, our success depends on our customers' willingness to purchase and provide shelf space for our products.

        Over 90% of sales are currently made to customers in North America, with the remaining sales primarily made to customers in the United Kingdom. Sales are made utilizing standard credit terms of 30 to 60 days. We generally accept returns only for defective merchandise.cash expenditures.

Cost of goods sold and other expensesReduction Initiatives

        Our products are manufactured by third parties, with approximately 85-90% of the dollar value of products being manufactured in Asia and the majority of the balance being manufacturedThe Company began implementing several cost reduction initiatives in the U.S. Costthird quarter of goods sold primarily represents purchases of finished products from these third party manufacturers. The remainder of our cost of goods sold includes duties on certain imported items, freight-in from suppliers and miscellaneous charges from contract manufacturers. Substantially all of our purchases are made in US dollars; therefore, most of this activity is not subject2012 designed to currency fluctuations. If our suppliers experience increased raw materials, labor or otherlower promotional costs and pass along those cost increases through higher prices for finished goods, our cost of sales would increase,advertising expenses, reduce operating costs, and to the extent we are unable to pass these price increases along to our customers, our gross margins would decrease.

        Selling, general and administrative expenses primarily consist of payroll, insurance, professional fees, royalties, freight out to customers, product development costs, advertising and marketing expenses (including co-op advertising allowances as negotiated with certain customers) and sales commissions. Several of these items fluctuate with sales; some are based on sales to particular customers and others are based on sales of particular products.

        There are not significant variations in seasonal demand for our products. Sales to our retail customers are generally higher in the time frame when retailers take initial shipments of new products.improve

Table of Contents

margins. These orders usually incorporate enough productinitiatives have resulted in tighter controls of retailer programs costs, a reduction in worldwide headcount, a reduction in executive salaries in 2012, voluntary reduction in board of director compensation, cuts in overhead spending relating to filldiscontinuing various outside services, and negotiated lower professional service fees.

New Credit Facility and Term Loan

        New Bank of America Credit Facility.    In February 2013, we entered into a new loan and security agreement (the "BofA Agreement") with Bank of America, N.A., as agent, the financial institutions party to the agreement from time to time as lenders. The BofA Agreement replaces our prior credit facility with Bank of America that was set to expire in December 2013.

        The BofA Agreement provides for an $80 million, asset-based revolving credit facility, with a $10 million letter of credit sub-line facility. The total borrowing capacity is based on a borrowing base, which is defined as 85% of eligible receivables plus the lesser of (i) 70% of the value of eligible inventory or (ii) 85% of the net orderly liquidation value of eligible inventory and less reserves. Total borrowing capacity under the BofA Agreement at February 28, 2013 was $62.4 million.

        The scheduled maturity date of loans under the BofA Agreement is February 28, 2018 (subject to customary early termination provisions). All obligations under the BofA Agreement are secured by substantially all the assets of the Company, subject to the first priority lien on certain assets held by the term loan lender described below. Proceeds from the loans will be used to satisfy existing debt, pay fees and transaction expenses associated with the closing of the BofA Agreement, pay obligations under the BofA Agreement, make payments on the term loan described below, and for lawful corporate purposes, including working capital.

        For additional information regarding the BofA Agreement, please see "Liquidity and Capital Resources" below.

        New Term Loan.    In February 2013, we entered into a new term loan agreement (the "Term Loan Agreement") with Salus Capital Partners,  LLC, as administrative agent and collateral agent, and each store pluslender from time to time a party to the Term Loan Agreement providing for a $15 million term loan (the "Term Loan").

        Proceeds from the Term Loan will be used to repay certain existing debt, to finance the acquisition of working capital assets in the ordinary course of business and capital expenditures, and for general corporate purposes. The Term Loan is secured by certain assets of the Company, including a first priority lien on intellectual property, plant, property and equipment, and a pledge of 65% of the ownership interests in certain subsidiaries of the Company. The Term Loan matures on February 28, 2018.

        For additional amountsinformation regarding the Term Loan, please see "Liquidity and Capital Resources" below.

        As of February 28, 2013, the effective date of the new credit facility, we had borrowings outstanding of $48.9 million and availability under the BofA agreement of $13.5 million.

Outlook

        Our business, financial condition and results of operations have and may continue to be kept at the customer's distribution center. The timing of these initial shipments variesaffected by customer dependingvarious economic factors. Although other factors will likely impact us, including some we do not foresee and those disclosed in Item 1A. Risk Factors in this Annual Report on when they finalize store layoutsForm 10-K for the upcoming year

Table of Contents

ended December 31, 2012, we believe our performance in 2013 will continue to be affected by the following:

•

Economic Climate. Periods of global economic uncertainty, such as the recession experienced in 2008 and whether there are any mid-year product introductions.

much of 2009, as well as recent market disruptions, can lead to reduced consumer and business spending. The current economic climate continues to affect our business in direct and indirect ways, including reduced consumer demand for our products, tighter inventory management by retailers, reduced profit margins due to pricing pressures from mass merchant retailers and a sales mix favoring lower margin products. In addition, reduced access to credit has and may continue to adversely affect consumers who desire to purchase our products from retailers and the ability of our own customers to pay us.



•

Retail Market Conditions. Our industry is very competitive, with increasing pressure from mass merchant retailers on pricing in reaction to perceived lack of consumer confidence. These customers continue to seek favorable pricing and increased promotional activity from us and we expect this trend will continue into 2013. We continue to seek to reduce pressure on gross margins through a variety of methods, including reducing manufacturing costs and locating lower-cost sources of supply. We have also begun raising prices on certain products and phasing out lower margin products. However, we may not be able to increase prices or decline requests for mark-downs and/or other allowances from some of our larger, retail customers due to market and competitive factors. In addition, as we focus on our business strategy of building our brands, we expect to move away from licensing arrangements with third parties to selling more Summer branded products.

Summary of critical accounting policies and estimates

        This summary of our critical accounting policies is presented to assist in understanding our consolidated financial statements. The consolidated financial statements and notes are representations of our management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements.

        We make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses. The accounting policies described below are those we consider critical in preparing our financial statements. Some of these policies include significant estimates made by management using information available at the time the estimates were made. However, these estimates could change materially if different information or assumptions were used.

Revenue recognition

        We record revenue when all of the following occur: persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable and collectability is reasonably assured. Sales are recorded net of provisions for returns and allowances, product placement fees, cash discounts and markdowns. We base our estimates for discounts, returns and allowances on negotiated customer terms, and historical experience. These estimates are subject to variability, as actual deductions taken by customers may be different from the estimates recorded. Customers do not have the right to return products unless the products are defective. We record a reduction of sales for estimated future defective product deductions based on historical experience.

        Sales incentives or other consideration given by us to customers that are considered adjustments of the selling price of its products, such as allowances and product placement fees,markdowns, are reflected as reductions of revenue. Sales incentives and other consideration that represent costs incurred by us for assets or services received,

Table of Contents

such as the appearance of our products in a customer's national circular ad (co-op advertising), are reflected as selling and marketing expenses in the accompanying statements of income.

Trade receivables

        We carry our tradeTrade receivables are reported at net realizable value.their outstanding unpaid principal balances reduced by an allowance for doubtful accounts. On a periodic basis, we evaluate our trade receivables and establish an allowance forestimate doubtful accounts based on a history of pasthistorical bad debt, expense, collectionsfactors related to specific customers' ability to pay and current credit conditions. Theeconomic trends. We write off accounts receivable against the allowance when a balance is adjusted based on actual write-offs that occur. We have a credit insurance policydetermined to protect against potential losses up to stated amounts from certain customers.be uncollectible.

        We do not accrue interest on trade receivables. A receivable is considered past due if payments have not been received within the credit terms on the account, typically 60 days for most customers.

        We will turn an account over for collection around 120 days past due. Accounts are considered uncollectible if no payments are received 60 to 90 days after they have been turned over for collection.

Inventory Valuation

        Inventory is comprised of finished goods and is stated at the lower of cost, inclusive of freight and duty, or market (net realizable value) using the first-in, first-out (FIFO) method. Our warehousing costs are charged to expense as incurred. Inventory write-downs are recorded for damaged, obsolete or slow-moving inventory. Management uses estimates to record write-downs based on its review of

Table of Contents

inventory by product category, including length of time on hand and estimates of future orders for each product. Changes in consumer preferences, as well as demand for products, customer buying patterns and inventory management could impact the inventory valuation.

Impairment of long-lived assets, goodwill and other intangible assets.

        Long-lived assets have been reviewed for impairment based on accounting guidance which requires that an impairment loss be recognized whenever the carrying value of an asset exceeds the sum of the undiscounted cash flows expected to result from the use and eventful disposition of that asset, excluding future interest costs the entity would recognize as an expense when incurred. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather tested at least annually for impairment. Our management reviews for indicators that might suggest an impairment loss could exist. Testing for impairment requires estimates of expected cash flows to be generated from the use of the assets. Various uncertainties, including changes in consumer preference, deterioration in the political environment, continued adverse conditions in the capital markets or changes in general economic conditions, could impact the expected cash flows to be generated by an asset or group of assets. Intangible assets that have finite useful lives are amortized over their useful lives.

Allowance for doubtful accounts.accounts

        The allowance for doubtful accounts represents adjustments to customer trade accounts receivable for amounts deemed uncollectible. The allowance for doubtful accounts reduces gross trade receivables to their estimated net realizable value. The allowance is based on our assessment of the business environment, customers' financial condition, historical trends, customer payment practices, receivable aging and customer disputes. We will continue to proactively review itsour credit risks and adjust its customer terms to reflect the current environment.

Inventory Valuation

        Inventory is comprised of finished goods and is stated at the lower of cost, inclusive of freight and duty, or market (net realizable value) using the first-in, first-out (FIFO) method. Our warehousing costs are charged to expense as incurred. We regularly review slow-moving and excess inventory, and write-down inventories as appropriate. Management uses estimates to record write-downs based on its review of inventory by product category, including length of time on hand and estimates of future orders for each product. Changes in consumer preferences, as well as demand for products, customer buying patterns and inventory management could impact the inventory valuation.

Impairment of Long-Lived Assets with Finite Lives

        We review long-lived assets with finite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered to be impaired when its carrying amount exceeds both the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition and the assets' fair value. Long-lived assets include property and equipment and finite-lived intangible assets. The amount of impairment loss, if any, is charged by the Company to current operations.

Goodwill and Indefinite-Lived Intangible Assets

        The Company accounts for goodwill and other intangible assets in accordance with accounting guidance that requires that goodwill and intangible assets with indefinite useful lives be tested annually for impairment and more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company's annual impairment testing is conducted in the fourth quarter of every year.

        The Company tests indefinite-lived intangible assets for impairment by comparing the asset's fair value to its carrying amount. If the fair value is less than the carrying amount, the excess of the

Table of Contents

carrying amount over fair value is recognized as an impairment charge and the adjusted carrying amount becomes the assets' new accounting basis.

        Management also evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, it is amortized prospectively over its estimated remaining useful life.

        The Company tests goodwill for impairment using a two-step process. In the first step, the Company compares the fair value of its single reporting unit with its carrying amount including goodwill. If the fair value of the single reporting unit exceeds its carrying value, the goodwill is considered not impaired, thus rendering unnecessary the second step in impairment testing. If the fair value of the single reporting unit is less than the carrying value, a second step is performed in which the implied fair value of the reporting unit's goodwill is compared to the carrying value of the goodwill. The implied fair value of the goodwill is determined based on the difference between the fair value of the single reporting unit and the net fair value of the identifiable assets and liabilities of the single reporting unit. If the implied fair value of the goodwill is less than the carrying value, the difference is recognized as an impairment charge.

Income taxes

        Effective January 1, 2007, we adoptedIncome taxes are computed using the provisionsasset and liability method of new accounting guidance which provides detailed guidanceaccounting. Under the asset and liability method, a deferred tax asset or liability is recognized for the financial statement recognition,estimated future tax effects attributable to temporary differences and carry forwards. The measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a "more-likely-than-not" recognition threshold at the effective date to be recognized upon adoption and in subsequent periods. Upon adoption, we had no unrecognized tax benefits.

        Deferreddeferred income tax assets areis adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent, based on available evidence; it is "more-likely-than-not"more likely than not that such benefitsbenefit will be realized. We recognize

        The Company recognized interest and penalties, if any, related to uncertain tax positions in selling, generalinterest expense. No interest and administrative expenses.

        Thepenalties related to uncertain tax positions were accrued at December 31, 2012. Our federal tax returns for 2009 have been audited by the U.S. Internal Revenue Service. All audit adjustments have been recorded without significant impact on our results of operations. On a global basis, the open tax years 2005 through 2008 remain opensubject to examination by the major taxing jurisdictions in which we operate. We expect no material changesthe Company operates is between two to unrecognized tax positions withinsix years.

Results of Operations

        The following table presents selected condensed consolidated financial information for Summer Infant, Inc. and its subsidiaries for the next twelve months.years ended December 31, 2012 and 2011.

Table of Contents

Results of Operations

Summer Infant, Inc. and Subsidiaries
Consolidated Statements of Income
For the Years Ended December 31, 2009 and 2008

        The numbers in the table below are in thousands of U.S. dollars; the text below the table is in whole numbers.

Year ended December 31, 20092012 compared with year ended December 31, 20082011

        Net sales increased 16%3.8% from $132,369,000$238,172 in the year ended December 31, 20082011 to $153,481,000$247,227 for the year ended December 31, 2009.2012. This increase was primarily attributable to organic growth resulting from increased distribution of existing products throughout our growing customer base, introduction of new products, acquisitions, and international growth. Sales increased in the furniture, feeding, safety, nursery, and play categories, offset, in part by lower sales in the monitor and gear categories year over year.

        Gross profit increased 18%decreased 1.9% from $46,855,000$81,385 for the year ended December 31, 20082011 to $55,248,000$79,772 for the year ended December 31, 2009.2012. The decline in gross profit and as a percent of sales is attributed to an unfavorable product mix, in particular, an increase in lower margin sales of furniture products and a decrease in sales of higher margin monitor products as well as a one-time $530 adjustment to cost of goods sold for the write off of obsolete inventory acquired from Born Free. In addition, markdown and returned goods allowances were higher during the year.

        General and administrative expenses decreased 7.2% from $44,928 for the year ended December 31, 2011 to $41,674 for the year ended December 31, 2012. In 2011, the Company incurred a lawsuit settlement, acquisition related costs, as well as other one-time charges that did not repeat in 2012. In addition, the Company began to benefit from overhead cost reductions initiated at the end of the second quarter of 2012.

        Selling expenses increased 30.3% from $22,259 for the year ended December 31, 2011 to $29,009 for the year ended December 31, 2012. This increase was primarily attributable to the 16%higher promotional costs related to customer cooperative advertising and placement of consumer ads, higher royalty payments under licensing agreements, and an increase in netother variable selling costs associated with higher sales. Gross profit percentage

        Depreciation and amortization increased 18.6% from $6,377 in the year ended December 31, 2011 to 36.0% of sales$7,566 for the year ended December 31, 2009 from 35.4%2012. The increase is attributable to the depreciation of a higher base of short-lived assets consisting primarily of new product prototypes added in 2011 and early 2012.

        Due to the sustained decrease in our results of operations (below forecasts) and stock price during the third quarter of 2012, we undertook a goodwill and intangible asset impairment analysis and engaged a third party to assist management in valuing goodwill and other intangible assets recorded on our balance sheet in the prior year due to cost savings negotiated bythird quarter of 2012. As a result, management determined that the estimated fair value of certain indefinite lived intangibles and implied fair value of our goodwill were lower than their respective carrying value, and the Company during 2009.recorded an estimated aggregate non-cash impairment charge of $69,796 in 2012. The non-cash impairment charge consisted of a write down of goodwill of $61,908 and a write down of a portion of intangible assets of $7,888. These charges affected our financial condition and results of operations for 2012; however, they have no impact on our day-to-day operations or liquidity and will not result in any future cash expenditures.

        Selling, general and administrative expenses (see note (a) above)Interest expense increased 48.7% from $34,039,000$2,790 in the year ended December 31, 2011 to $4,148 for the year ended December 31, 2009 to $40,520,0002012. Interest expense increased as a result of higher interest rates and higher average debt levels on our credit facility in effect for 2012.

        For the year ended December 31, 2009. This increase was2011, we recorded a $1,220 provision for income taxes on $5,031 of pretax income, resulting in a 24% tax rate for the year. For the year ended December 31, 2012, we recorded a $6,768 million tax benefit. The tax benefit in 2012 is primarily attributable to increased variable costs such as co-op advertising allowances as a result$6,000 benefit recorded related to the deferred tax adjustment resulting from the impairment of goodwill and intangible asset charge taken during the significant increase in sales. In addition, there were increased expenditures in product development, payroll, professional fees, and warehouse operations.year.

Table of Contents

Liquidity and Capital Resources

        We generally fund our operations and working capital needs through cash generated from operations and borrowings under our credit facility.

        OurThrough 2011, our sales have increased significantly, over the past several years. This sales growth haswhich led to a substantial increase in working capital requirements, specifically accounts receivable and inventory. TheIn a typical cash flow cycle, is as follows:

•

Inventoryinventory is purchased to meet expected demand plus a safety stock. Because the majority of our vendorssuppliers are based in Asia, inventory takes from fourthree to sixfour weeks to arrive from Asia to the various distribution points we maintain in the US,United States, Canada and the UK.United Kingdom. Payment terms for these vendors are approximately 30- 6060-90 days from the date the product ships from Asia, therefore we

Table of Contents

are generally paying for the product a short time after it is physically received in the US. The increasedUnited States. In turn, sales we have experienced result in increased levels of inventory, and therefore an increase in the amount of cash required to fund our inventory level.

•

Sales to customers generally have payment terms of 30 to 60 days. The increased sales have resulteddays, resulting in an increase in the level of accounts receivable and therefore have increasedincreasing the amount of cash required to fund working capital.

        We have traditionally been able In order to fundbridge the gap between paying our increased working capital through lines ofsuppliers and receiving payment from our customers for goods sold, we rely on our credit with banks.facility.

        The majority of capital expenditures are for tools related to new product introductions. We receive indications from retailers generally around the middle of each year as to what products the retailer will be taking into its product line for the upcoming year. Based on these indications, we will then acquire the tools required to build the products. In most cases the payments for the tools are spread out over a three to four month period.

        For the year ended December 31, 2009, net cash provided by operating activities totaled $11,658,000. This was due to the positive net income generated during the year, plus non-cash charges. In addition, we had a net decrease in working capital requirements due to improved inventory controls and longer payment terms with suppliers.

        Net cash used in investing activities was approximately $5,837,000 which primarily relates to capital expenditures and acquisitions.

        Net cash used in financing activities was approximately $5,731,000 which relates to repayments of amounts due on our debt facilities; the positive cash flow from operating activities generated the debt reduction.

        Based primarily on the above factors, the net cash decrease for the year ended December 31, 2009 was approximately $56,000, resulting in a cash balance of approximately $932,000 at December 31, 2009.

        We believe that our cash on hand and current banking facilities are sufficient to fund its cash requirements for at least the next 12 months. However, unforeseen circumstances, such as softness in the retail industry or deterioration in the business of a significant customer, could create a situation where Summer cannot access all of the available lines of credit due to not having sufficient assets or EBITDA. In addition, there is no assurance that Summer will meet all of its bank covenants in the future, or that its lender will grant waivers if there are covenant violations.

        Our strategy for funding its business going forward is a combination of increased profitability, and if necessary, negotiation of increased borrowing lines as required with traditional lenders.

        On April 10, 2008,August 2010, we entered into two three-yeara secured credit facilities (the "Loan Agreement")agreement with Bank of America, N.A., as Administrative Agent, and each of the financial institutions that is a signatory to the Loan Agreement. The agreement was amended on March 24, 2011 and on November 9, 2011 (as amended, the "Loan Agreement"). The Loan Agreement provides for a $36,000,000an $80,000 working capital revolving credit facility and a $10,000,000 non-restoring acquisition$20,000 "accordion" credit facility. The credit facilities matureloan matures on June 30, 2011.2013.

        Summer and its subsidiaries, Summer Infant (USA), Inc., Summer Infant Europe Limited, Summer Infant Asia Limited and Summer Infant Canada, Limited are the borrowers under the Loan Agreement. These credit facilitiesThis loan agreement replaced Summer's prior line of credit and areis being used principally to fund growth opportunities and for working capital purposes.

        Our abilityOn May 11, 2012, the Company entered into an amendment (the "May 2012 Amendment") that revised the Company's financial covenants and extended the maturity date an additional six months to December 31, 2013. In addition, the prior $20,000 "accordion" feature was removed and two additional pricing tiers based on the leverage covenant performance were added.

        The Loan Agreement allows the Company to borrow under the Loan Agreement is subject to its ongoing compliance withcredit facility at LIBOR or at a number of financial and other covenants, includingbase rate, plus applicable margins based on the following (i) that Summer and its subsidiaries maintain a net worth of $50,000,000 plus the sum of 50% of net income earned in each fiscal year,

Table of Contents

(ii) that Summer and its subsidiaries maintain a ratio of total funded debt to EBITDA of not greater than 3.50:1.00, and (iii) that Summer and its subsidiaries maintainleverage ratio for the most recent twelve month rolling quarter end. Applicable margins vary between a ratio of operating cash flow200 to debt service of not less than 1.25:1.00. Furthermore, if the ratio of total funded debt to EBITDA is greater than 3.25:1.00 for any fiscal year, the aggregate amount that may be borrowed under the Loan Agreement will be determined by reference to a borrowing base.

        These credit facilities bear interest at a floating rate based on a375 basis point spread over LIBOR ranging from 150and between a zero to 175 basis points to 200 basis points, depending upon the ratio of total funded debt to EBITDA. We have also entered into various interest swap agreements which fixes the interest ratespoint spread on a portion of the outstanding debt. As of December 31, 2009, thebase rate on these credit facilities averaged 4.60%.loans. In addition, thesethe credit facilities havefacility has an unused line fee based on the unused amount of the credit facilitiesfacility equal to 25 basis points.

        On November 7, 2012, the Company entered into an amendment (the "Fourth Amendment") that waived certain covenant defaults, revised the Company's financial covenants, added additional applicable rate margin spread pricing tiers and added a payment in kind (PIK) interest rate of 200 basis points on any outstanding loan balance effective October 1, 2012.

        Pursuant to the Fourth Amendment, beginning October 1, 2012, the applicable margins no longer vary depending upon the funded debt to EBITDA leverage ratio and are instead fixed at 4.75% for Eurodollar or BBA LIBOR rate loans and L/C fees and 2.75% for base rate loans through March 31, 2013, increasing by 1.00% each fiscal quarter thereafter. In addition, beginning on October 1, 2012, loans will begin bearing additional interest of 2.00% per annum not paid in cash but payable in kind by adding such accrued interest to the outstanding principal of the loans, or "PIK interest."

Table of Contents

        The Company has also entered into various interest rate swap agreements in the past which effectively fixed the interest rates on a portion of the outstanding debt, of which, the last agreement matured on June 7, 2012. In addition, the credit facility has an unused line fee based on the unused amount of the credit facility equal to 25 basis points.

        The Loan Agreement also containscontained customary events of default, including a cross default provision and a change of control provision. In the event of a default, all of the obligations of the Company and its subsidiaries under the Loan Agreement may be declared immediately due and payable. For certain events of default relating to insolvency and receivership, all outstanding obligations become due and payable.

        As of December 31, 2009,2012, we had $33,461,000$64,077 outstanding of the total committed amount of $46,000,000.$80,000.

        We were in compliance with all covenants as ofFor the year ended December 31, 2009.2012, net cash provided by operating activities totaled $4,643, which primarily relates to operating income excluding our non-cash impairment of goodwill and intangible asset charge. At December 31, 2011, net cash provided by operating activities totaled $9,385. The change in net cash relating to operating activities in 2012 as compared to 2011 is largely attributable to lower operating income in 2012.

        For the year ended December 31, 2012, net cash used in investing activities was approximately $5,596 which primarily relates to ongoing capital expenditures . At December 31, 2011, net cash used in investing activities was $20,769. The increase in net cash used in investing activities in 2011 was due primarily to the Born Free acquisition.

        For the year ended December 31, 2012, net cash provided by financing activities was approximately $2,925 which relates primarily to borrowings from our debt facilities to fund operations. At December 31, 2011, net cash provided by financing activities was $11,189. Net cash provided by financing activities in 2011 included borrowings from our debt facilities to fund the Born Free acquisition.

        Based primarily on the above factors, the net cash increase for the year ended December 31, 2012 was approximately $1,917, resulting in a cash balance of approximately $3,132 at December 31, 2012.

        The following table summarizes our significant contractual commitments at December 31, 2009:2012:

        Estimated future interest payments on our line of credit were based upon the interest rates in effect at December 31, 2009.2012.

        New Bank of America Credit Facility.    On February 28, 2013, we entered into a new loan and security agreement (the "BofA Agreement") with Bank of America, N.A., as agent, the financial institutions party to the agreement from time to time as lenders. The BofA Agreement replaces the Company's prior credit facility with Bank of America.

        The BofA Agreement provides for an $80 million, asset-based revolving credit facility, with a $10 million letter of credit sub-line facility. The total borrowing capacity is based on a borrowing base,

Table of Contents

which is defined as 85% of eligible receivables plus the lesser of (i) 70% of the value of eligible inventory or (ii) 85% of the net orderly liquidation value of eligible inventory and less reserves.

        The scheduled maturity date of loans under the BofA Agreement is February 28, 2018 (subject to customary early termination provisions). All obligations under the BofA Agreement are secured by substantially all the assets of the Company, subject to the first priority lien on certain assets held by the term loan lender described below. In addition, Summer Infant Canada Limited and Summer Infant Europe Limited, subsidiaries of the Company, are guarantors under the BofA Agreement. Proceeds from the loans will be used to satisfy existing debt, pay fees and transaction expenses associated with the closing of the BofA Agreement, pay obligations under the BofA Agreement, make payments on the term loan described below, and for lawful corporate purposes, including working capital.

        Loans under the BofA Agreement bear interest, at our option, at a base rate or at LIBOR, plus applicable margins based on average quarterly availability under the BofA Agreement and ranging between 1.75% and 2.25% on LIBOR borrowings and 0.25% and 0.75% on base rate borrowings. Interest payments are due monthly, payable in arrears. We are also required to pay an annual non-use fee of 0.375% of the unused amounts under the BofA Agreement, as well as other customary fees as are set forth in the BofA Agreement. As of February 28, 2013 the base rate on loans was 3.75% and the LIBOR rate was 2.25%.

        Under the BofA Agreement, we must comply with certain financial covenants, including that the Company (i) for the first year of the loan, maintain and earn a specified minimum, monthly consolidated EBITDA amount, with such specified amounts increasing over the first year of the loan to a minimum consolidated EBITDA of $12 million at February 28, 2014, and (ii) beginning with the fiscal quarter ending March 31, 2014, maintain a fixed charge coverage ratio of at least 1.0 to 1.0 for each period of four fiscal quarters most recently ended. For purposes of the financial covenants, consolidated EBITDA is defined as net income before interest, taxes, depreciation and amortization, plus certain customary expenses, fees and non-cash charges and minus certain customary non-cash items increasing net income.

        The BofA Agreement contains customary affirmative and negative covenants. Among other restrictions, the Company is restricted in its ability to incur additional debt, make acquisitions or investments, dispose of assets, or make distributions unless in each case certain conditions are satisfied. The BofA Agreement also contains customary events of default, including a cross default, the occurrence of a material adverse event and the occurrence of a change of control. In the event of a default, all of the obligations of the Company and its subsidiaries under the BofA Agreement may be declared immediately due and payable. For certain events of default relating to insolvency and receivership, all outstanding obligations become due and payable.

        As of February 28, 2013, the effective date of the BofA Agreement, we had borrowings outstanding of $48.9 million and availability of $13.5 million.

        New Term Loan.    On February 28, 2013 we entered into a new term loan agreement (the "Term Loan Agreement") with Salus Capital Partners, LLC, as administrative agent and collateral agent, and each lender from time to time a party to the Term Loan Agreement providing for a $15 million term loan (the "Term Loan").

        Proceeds from the Term Loan will be used to repay certain existing debt, to finance the acquisition of working capital assets in the ordinary course of business and capital expenditures, and for general corporate purposes. The Term Loan is secured by certain assets of the Company, including a first priority lien on intellectual property, plant, property and equipment, and a pledge of 65% of the ownership interests in certain subsidiaries of the Company. The Term Loan matures on February 28, 2018. In addition, Summer Infant Canada Limited and Summer Infant Europe Limited, subsidiaries of the Company, are guarantors under the Term Loan Agreement.

Table of Contents

        The principal of the Term Loan will be repaid, on a quarterly basis, in installments of $375,000, commencing with the quarter ending September 30, 2013, until paid in full on termination. The Term Loan bears interest at an annual rate equal to LIBOR, plus 10%, with a LIBOR floor of 1.25%. Interest payments are due monthly, in arrears. As of February 28, 2013 the interest rate on the Term Loan was 11.25%.

        The Term Loan Agreement contains customary affirmative and negative covenants substantially the same as the BofA Agreement. In addition, we must comply with certain financial covenants, including that the Company (i) meet the same minimum, monthly consolidated EBITDA as set forth in the BofA Agreement and (ii) initially maintain a monthly senior leverage ratio of 1:1. For periods after February 28, 2014, the senior leverage ratio will be based on an annual business plan to be approved by the Company's Board of Directors and will be tested monthly on trailing twelve month basis. For purposes of the financial covenants in the Term Loan Agreement, the senior leverage ratio is the ratio of (i) all amounts outstanding under the Term Loan Agreement and the BofA Agreement to (ii) consolidated EBITDA for the twelve-month period ending as of the last day of the most recently ended fiscal month. The Term Loan Agreement also contains events of default, including a cross default, the occurrence of a material adverse event, the occurrence of a change of control, and the recall of products having a value of $2 million or more. In the event of a default, all of the obligations of the Company and its subsidiaries under the Term Loan Agreement may be declared immediately due and payable. For certain events of default relating to insolvency and receivership, all outstanding obligations become due and payable.

        We believe that our cash on hand and new banking facilities are sufficient to fund our cash requirements for at least the next 12 months. However, unforeseen circumstances, such as softness in the retail industry or deterioration in the business of a significant customer could create a situation where we cannot access all of the available lines of credit due to not having sufficient assets or consolidated EBITDA (as defined in the credit agreement described below) as required under our loan agreements. There is no assurance that we will meet all of our bank covenants in the future, or that our lender will grant waivers if there are covenant violations. In addition, should we need to raise additional funds through additional debt or equity financings, any sale of additional debt or equity securities may cause dilution to existing stockholders. If sufficient funds are not available or are not available on acceptable terms, our ability to address any unexpected changes in our operations could be limited. Furthermore, there can be no assurance that we will be able to raise such funds if and when they are required. Failure to obtain future funding when needed or on acceptable terms could materially adversely affect our results of operations.

Off-Balance Sheet Arrangements

        We did not have any off-balance sheet arrangements during either of the years ended December 31, 20092012 and 2008.

Non-GAAP Discussion

        In addition to our reported results, which are prepared in accordance with generally accepted accounting principles ("GAAP"), we also disclose non-GAAP measures of our performance. Adjusted EBITDA, as defined below, is an important supplemental financial measure of our performance that is not required by, or presented in accordance with, GAAP. As used herein, "Adjusted EBITDA" represents net income (loss) before income taxes, interest expense, deal-related expenses, depreciation and amortization, and non-cash stock option expense. We believe that the presentation of Adjusted EBITDA provides useful information regarding our results of operations because it assists in analyzing and benchmarking the performance and value of our business. We believe that Adjusted EBITDA is

Table of Contents

useful to stockholders as a measure of comparative operating performance, as it is less susceptible to variances in actual performance resulting from depreciation and amortization and more reflective of changes in pricing decisions, cost controls and other factors that affect operating performance.

        Adjusted EBITDA also is used by our management for multiple purposes, including:

•

to calculate and support various coverage ratios with our lenders;



•

to allow lenders to calculate total proceeds they are willing to loan to us based on our relative strength compared to other competitors; and



•

to more accurately compare our operating performance from period to period and company to company by eliminating differences caused by variations in capital structures (which affect relative interest expense), tax positions and amortization of intangibles.

        Although we use Adjusted EBITDA as a financial measure to assess the performance of our business, there are material limitations to using a measure such as Adjusted EBITDA, including the difficulty associated with using it as the sole measure to compare the results of one company to another and the inability to analyze significant items that directly affect a company's net income (loss) or operating income because it does not include certain material costs, such as interest and taxes, necessary to operate its business. In addition, our calculation of Adjusted EBITDA may not be consistent with similarly titled measures of other companies and should be viewed in conjunction with measures that are computed in accordance with GAAP. Our management compensates for these limitations in considering Adjusted EBITDA in conjunction with its analysis of other GAAP financial measures, such as net income.

        The following table presents a reconciliation of Adjusted EBITDA to net income, its most directly comparable GAAP financial measure, on a historical basis, for the periods presented:

Reconciliation of Income before interest to unaudited Adjusted EBITDA

        The increase in Adjusted EBITDA for the past year has been primarily the result of the sales increase in 2009. Sales increased from $132,369,000 in 2008 to $153,481,000 in 2009.

        For the years ended December 31, 2009 and 2008 "Adjusted EBITDA", as defined, includes the addition of certain deal-related expenses that we believe to be nonrecurring.2011.

Recently Issued Accounting Pronouncements

        In September 2006,June 2011, the FASB issued newan amendment to the accounting guidance regarding fair value measurements. The newfor presentation of comprehensive income. Under the amended guidance, defined fair value, establishesan entity may present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a frameworksingle continuous statement of comprehensive income or in two separate but consecutive statements. In either case, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for measuring fair value in generally accepted accounting principlesother comprehensive income, and expands disclosures about fair value measurements. The guidance applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. The guidance wasa total amount for comprehensive income. For public companies, the amendment is effective for fiscal years, and interim periods within those years, beginning after NovemberDecember 15, 2007. The Company adopted2011, and shall be applied retrospectively. Other than a change in presentation, the implementation of this guidance for its financial assets and liabilities effective January 1, 2008. The adoptionaccounting pronouncement did not have a material impact on our financial statements.

Table of Contents

        In December 2007,May 2011, the FASB issued a new standard which establishes principlesan amendment to the accounting guidance for fair value measurement and disclosure. Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquired company. The new standard also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable usersmeasurement of the fair value of financial statements to evaluate the natureassets and financial effects of the business combination.liabilities as well as instruments classified in shareholders' equity. The provisions of the new standard areguidance is effective for financial statements issued for fiscal yearsinterim and annual periods beginning after December 15, 2008. We adopted2011. The adoption of this standard, as applicable, on January 1, 2009. The adoptionaccounting pronouncement did not have a material impact on our financial statements.

        In December 2007, the FASB issued a new standard which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. In addition, the new standard also includes expanded disclosure requirements regarding interests of the parent and its non-controlling interest. The provisions of the new standard are effective for financial statements issued for fiscal years beginning after December 15, 2008. We adopted this standard, as applicable, on January 1, 2009. The adoption did not have a material impact on our financial statements.

        In April 2008, the FASB issued new guidance which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The intent of the position is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. The new guidance is effective for fiscal years beginning after December 15, 2008 and is effective beginning January 1, 2009. Adoption did not have a material impact on its consolidated results of operations and financial condition.

        The FASB Accounting Standards Codification™ (Codification) is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The adoption of the codification had no impact on our financial position, results of operations or cash flows.

        In February 2010, the FASB issued an amendment to its previously issued guidance regarding subsequent events. This amendment removed the requirement for SEC filers to disclose the date through which subsequent events have been evaluated by the Company. The amendment was effective immediately for all financial statements yet to be issued. The Company adopted this amendment in February 2010 with no material impact to the consolidated financial statements.

        Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Cautionary Statement Under the Private Securities Litigation Reform Act of 1995

        Statements in this Annual Report, which are not historical facts or information, are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current assumptions, estimates and expectations. Certain of such forward-looking information may be identified by such terms as "expect," "anticipate," "believe," "outlook," "may," "estimate," "should," "predict," and similar terms or variations thereof as well as other statements regarding the Company's future earnings and other future financial results or financial position, constitutes forward-looking information.

        Such forward-looking statements include statements regarding our ability to capitalize on market trends, expectations regarding future growth and profitability, our ability to leverage our knowledge of and strengthen our relationships with our customers, our ability to execute on our strategic priorities, and expected trends and results in 2013. These statements are based on a series of expectations, assumptions, estimates and projections about the Company, are not guarantees of future results or performance, and involve significant risks, uncertainties and other factors, including assumptions and projections, for all forward periods. Actual results of the Company may differ materially from any future results expressed or implied by such forward-looking statements. Such factors include, among others, the following:

•

the concentration of our business with a small number of retail customers;



•

the financial status of our customers and their ability to pay us in a timely manner;



•

our ability to introduce new products or improve existing products that satisfy consumer preferences;



•

our ability to develop new or improved products in a timely and cost-efficient manner;



•

our ability to compete with larger and more financial stable companies in our markets;



•

our ability to comply with financial and other covenants in our debt agreements;



•

our dependence on key personnel;



•

our reliance on foreign suppliers and potential disruption in foreign markets in which we operate;



•

increases in the cost of raw materials used to manufacture our products;



•

compliance with safety and testing regulations for our products;



•

product liability claims arising from use of our products;



•

unanticipated tax liabilities; and



•

an impairment of other intangible assets.

Table of Contents

        The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by the Company (such as in our other filings with the Securities and Exchange Commission ("SEC") or in company press releases) for other factors that may cause actual results to differ materially from those projected by the Company. Please refer to Item 1A. Risk Factors, of this annual report on Form 10-K for additional information regarding factors that could affect the Company's results of operations, financial condition and liquidity.

        The Company intends its forward-looking statements to speak only as of the time of such statements and does not undertake or plan to update or revise them as more information becomes available or to reflect changes in expectations, assumptions or results. The Company can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this report or included in our other periodic reports filed with the SEC could materially and adversely impact our operations and our future financial results.

        Any public statements or disclosures by the Company following this report that modify or impact any of the forward-looking statements contained in or accompanying this report will be deemed to modify or supersede such outlook or other forward-looking statements in or accompanying this report.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

        Not applicable.required.

Item 8.    Financial Statements and Supplementary Data

        The financial statements required by this item are attached to this Annual Report on Form 10-K beginning on Page F-1.

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

        Not applicable.None.

Table of Contents

Item 9A(T)9A.    Controls and Procedures

(a)

Evaluation of Disclosure Controls and Procedures

        As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this Annual report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2009.2012. Our principal executive officer and principal financial officer have concluded, based on their evaluation, that as of the end of the period covered by this report, our disclosure controls and procedures were effective as of December 31, 2009. The Company had a deficiency as a result of not recording the fair value of its swap agreements in accordance with generally accepted accounting principles. As of December 31, 2009, management believes this deficiency has been corrected.2012.

(b)

Management's Report on Internal Control over Financial Reporting

        Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Rule 13a-15(f) under the Exchange Act, internal control over financial reporting is a process designed by, or under the supervision of, , a company's principal executive and principal financial officers and effected by a company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and

Table of Contents

the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. It includes those policies and procedures that:

        1)    Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of a company;

        2)    Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of a company are being made only in accordance with authorizations of management and the board of directors of the company; and

        3)    Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or deposition of a company's assets that could have a material effect on its financial statements.

        Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        The Company's management has used the criteria established in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"COSO Framework") to evaluate the effectiveness of the Company's internal control over financial reporting. Management has selected the COSO frameworkFramework for its evaluation as it is a control framework recognized by the SEC and the Public Company Accounting Oversight Board, that is free from bias, permits reasonably consistent qualitative and quantitative measurement of the Company's internal controls, is sufficiently complete so that relevant controls are not omitted, and is relevant to an evaluation of internal controls over financial reporting.

        Management of the Company conducted an evaluation of the effectiveness, as of December 31, 2009,2012, of the Company's internal control over financial reporting and based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO Framework"). Based on its evaluation under the COSO Framework,

Table of Contents

management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2009.2012.

Identification of a Material Weakness

        A material weakness is a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

        In November 2009, it was determined that the Company's method for calculating interest on its financing agreements, specifically the interest rate swaps and their fair value, were not correct as further described under (a) above, and the Company's management has elected to restate the financial statements for 2008.

Remediation of a Material Weakness

        Our management conducted an internal review of its accounting for interest rate swap transactions to ensure its accounting for the interest rate swaps are in accordance with Generally Accepted Accounting Principles. We believe that controls are in place at this time to ensure proper accounting of interest rate swaps.

        The annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only our management's report in this annual report.

(c)

Changes in Internal Control Over Financial Reporting

        Other than the matter discussed above, thereThere was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 20092012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.    Other Information

        Not applicable.

PART III

Item 10.    Directors, Executive Officers and Corporate Governance

        The information required by this Item will be containedrelated to directors and nominees of the Company is set forth in our definitive Proxy Statement to be filed with the SEC in connection with our 20102013 Annual Meeting of Stockholders (the "2010"2013 Proxy Statement") under the captions "Election of Directors," "Board of Directors Meetings and Committees of the Board," "Executive Officers" and "Section 16(a) Beneficial Ownership Reporting Compliance" and is incorporated herein by reference.

        The information relating to the Company's executive officers and Section 16(a) beneficial ownership reporting compliance that appears in the 2013 Proxy Statement is also incorporated herein by reference.

Table of Contents

        We have adopted a Code of Ethics that applies to all our directors, officers and employees. The Code of Ethics is publicly available onin the Investor Relations section of our website atwww.summerinfant.com. Amendments to the Code of Ethics and any grant of a waiver from a provision of the Code of Ethics requiring disclosure under applicable SEC and Nasdaq rules will be disclosed on our website.

        The information regarding the Company's Audit Committee and its designated audit committee financial experts is set forth in the 2013 Proxy Statement and such information is incorporated herein by reference.

        The information concerning procedures by which stockholders may recommend director nominees is set forth in the 2013 Proxy Statement and such information is incorporated herein by reference.

Item 11.    Executive Compensation

        The information required by this Item will berelating to executive compensation and the Company's policies and practices as they relate to risk management is set forth in the 2013 Proxy Statement and such information is incorporated herein by reference, fromprovided that the information under the caption "Executive Compensation" contained"Compensation Committee Report" shall be deemed "furnished" and shall not be deemed "filed" with this report, not deemed incorporated by reference into any filing under the Securities Act of 1933 except only as may be expressly set forth in our 2010 Proxy Statement.any such filing by specific reference.

Table of Contents

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

        The information requiredrelating to security ownership of management, certain beneficial owners, and the Company's equity plans is set forth in the 2013 Proxy Statement and is incorporated herein by this item will be incorporated by reference from the information under the caption "Ownership of Summer Infant, Inc. Common Stock" contained in our 2010 Proxy Statement.reference.

Equity Compensation Plan Information

        The following table summarizes share information, as of December 31, 2009, for our equity compensation plans, including the 2006 Performance Equity Plan.

        In addition, during 2009 349,000 restricted shares were granted to employees and board members; 87,250 shares vested in 2009 and were issued, 19,500 shares were cancelled, and 242,250 shares have not yet vested.

Item 13.    Certain Relationships and Related Transactions, and Director Independence

        The information requiredrelating to certain relationships and related party transactions and director independence is set forth in the 2013 Proxy Statement and is incorporated herein by this item will be incorporated by reference from the information under the caption "Certain Relationships and Related Transactions" contained in our 2010 Proxy Statement.reference.

Item 14.    Principal AccountingAccountant Fees and Services

        The information requiredrelating to the independent registered public accounting firm fees and services and the Company's pre-approval policies and procedures for audit and non-audit services provided by this item will besuch accounting firm is set forth in the 2013 Proxy Statement and is incorporated herein by reference from the information under the captions "Audit Fees", "Audit-Related Fees," "Tax Fees," "All Other Fees" and "Pre-Approval Policies and Procedures" contained in our 2010 Proxy Statement.reference.

PART IV

Item 15.    Exhibits and Financial Statement Schedules

(a)

(1) Financial Statements

The list of consolidated financial statements and notes required by this Item 15 (a) (1) is set forth in the "Index to Financial Statements" on page F-1 of this Annual Report.

(a)

(2)   Financial Statement Schedules

All schedules have been omitted because the required information is included in the financial statements or notes thereto.

(a)

(3)   Exhibits

The list of exhibits required by this Item 15 (a) (3) is set forthlisted in the "Index to Exhibits" beginning on page 25immediately preceding the exhibits are filed as part of this Annual Report.

Table of Contents

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 13th day of March 2013.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Table of Contents

Summer Infant, Inc. And Subsidiaries
Index to Financial Statements

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Summer Infant, Inc.

        We have audited the accompanying consolidated balance sheetsheets of Summer Infant, Inc. and Subsidiaries as of December 31, 2009,2012 and 2011, and the related consolidated statements of income,operations, stockholders' equity, comprehensive income (loss), and cash flows for the yearyears then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.audits.

        We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our auditaudits included consideration of internal controlscontrol over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's controls over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit providesaudits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Summer Infant, Inc. and Subsidiaries as of December 31, 2009,2012 and 2011, and the results of their operations and their cash flows for the yearyears then ended, in conformity with U.S. generally accepted accounting principles.

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Summer Infant, Inc.

        We have audited the accompanying consolidated balance sheet of Summer Infant, Inc. and Subsidiaries as of December 31, 2008, and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Summer Infant, Inc. and Subsidiaries as of December 31, 2008, and the results of their operations and their cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.

Table of Contents

Summer Infant, Inc. and Subsidiaries

Consolidated Balance Sheets

        Note that all dollar amounts presented in the table below are in thousands of U.S. dollars, except share amounts and par value per share.

See notes to consolidated financial statements

Table of Contents

Summer Infant, Inc. and Subsidiaries

Consolidated Statements of IncomeOperations

        Note that all dollar amounts presented in the table and the notes to the table below are in thousands of U.S. dollars, except share and per share amounts.

See notes to consolidated financial statements

Table of Contents

Summer Infant, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

        Note that all amounts presented in the table below are in thousands of dollars.

See notes to consolidated financial statements

Table of Contents

Summer Infant, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

        Note that all dollar amounts presented in the attached table below are in thousands of U.S. dollars.

See notes to consolidated financial statements

Table of Contents

Summer Infant, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Equity

For the Years Ended December 31, 20092012 and 20082011

        Note that all dollar amounts presented in the attached table below are in thousands of U.S. dollars.