KIDBQ Kid Brands Inc (CE)

Kid Brands Announces New Third-Party Logistics Agreement With NFI, Enhancing Operating Efficiencies

EAST RUTHERFORD, NJ--(Marketwired - Nov 15, 2013) - Kid Brands, Inc. (NYSE: KID) today announced that the Company has signed an agreement with National Distribution Centers, L.P., the warehousing and distribution division of NFI ("NFI"), a fully integrated supply chain solutions provider, to provide certain third party logistics ("3PL") services for the Company's warehousing and distribution operations. NFI will provide storage, handling, inventory management, transportation management, shipping, receiving, repackaging, order processing and related support services for Kid Brands and its subsidiaries. Over the next several quarters, Kid Brands intends to consolidate its five existing distribution facilities into one centralized location of an aggregate 515,000 square feet operated by NFI on its Chino, California campus. NFI currently provides 3PL services to the Company's LaJobi subsidiary. Upon full implementation of the 3PL agreement, the Company anticipates an increase in overall efficiencies and sustainable long-term benefits to operating margin.

Kerry Carr, Executive Vice President, Chief Operating Officer and Chief Financial Officer, commented, "The consolidation of our five distribution centers across the country into one centralized location is further testament to our commitment to transform the business and streamline our operations. As we continue to critically assess our operational platform, we remain diligent in seeking out methods to drive sustainable efficiencies and cost savings, as well as improve the overall effectiveness of our supply chain. Our efforts thus far have already yielded tangible results, both operationally and financially, and we intend to continue our relentless pursuit to drive a higher level performance across almost every aspect of the Company's business."

Ms. Carr continued, "We believe that our agreement with NFI is an important step towards achieving improved service, capacity, speed and accuracy at a reduced cost. We also believe it will better position us to serve the growing e-commerce channel of distribution through drop-shipping fulfillment capabilities for our customers, and provide improved service to our entire customer base, including enhancement of service to the specialty channel." 

Kid Brands anticipates that once fully implemented, the new distribution arrangement will generate over $2 million in savings annually, with initial savings expected to begin in the second half of 2014. The Company will pay $1.5 million to NFI in start-up costs over a nine-month period beginning in the fourth quarter of 2013, offset in part by reduced fixed costs over the initial term of the 3PL Agreement. The initial term of the 3PL Agreement will continue through March 1, 2019, with automatic renewals for successive 12-month periods (up to an additional 5 years) until terminated pursuant to the terms of the 3PL Agreement. The consolidation and transition to operations under the new 3PL Agreement is currently expected to be completed in the second quarter of 2014. 

Kid Brands, Inc.

Kid Brands, Inc. and its subsidiaries are leaders in the design, development and distribution of infant and juvenile branded products. Its design-led products are primarily distributed through mass market, baby super stores, specialty, food, drug, independent and ecommerce retailers worldwide.

The Company's current operating subsidiaries consist of: Kids Line, LLC; LaJobi, Inc.; Sassy, Inc.; and CoCaLo, Inc. Through these wholly-owned subsidiaries, the Company designs, manufactures (through third parties) and markets branded infant and juvenile products in a number of complementary categories including, among others: infant bedding and related nursery accessories and décor and nursery appliances (Kids Line® and CoCaLo®); nursery furniture and related products (LaJobi®); and developmental toys and feeding, bath and baby care items with features that address the various stages of an infant's early years, including the Kokopax® line of baby gear products (Sassy®). In addition to the Company's branded products, the Company also markets certain categories of products under various licenses, including Carter's®, Disney®, Graco® and Serta®. Additional information about the Company is available at www.kidbrandsinc.com.

NFI NFI is a fully integrated supply chain solutions provider. NFI owns facilities globally and operates in excess of 20 million square feet of warehouse and distribution space. Its company-owned fleet consists of over 2,000 tractors and 7,000 trailers, operated by more than 2,500 company drivers and 250 owner-operators. Its business lines include transportation, distribution, warehousing, transportation brokerage, intermodal, real estate and solar services. For more information about NFI, visit www.nfiindustries.com.

Note: This press release contains certain forward-looking statements. Additional written and oral forward-looking statements may be made by the Company from time to time in Securities and Exchange Commission (SEC) filings and otherwise. The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. These statements may be identified by the use of forward-looking words or phrases, including, but not limited to, "believe", "plan", "anticipate", "may", "potential", "should", "will", "would", "could", "might", "possible", "contemplate", "continue", "expect", "intend", and/or "seek". The Company cautions readers that results predicted by forward-looking statements, including, without limitation, those relating to our future business prospects, revenues, working capital, liquidity, capital needs, interest costs and income are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Specific risks and uncertainties include, but are not limited to, those set forth under Part I, Item 1A, Risk Factors, of the Company's most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, each as filed with the SEC. Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

CONTACT: FTI CONSULTING Leigh Parrish/Daniel Haykin 212-850-5600