Crown Crafts Reports Fiscal 2017 Second Quarter Results
November 16 2016 - 6:45AM
Crown Crafts, Inc. (NASDAQ:CRWS) (the “Company”) today reported
results for the fiscal 2017 second quarter, which ended October 2,
2016.
“Several factors affected our results in the second
quarter, and we continue to adapt to changes in the marketplace,”
said E. Randall Chestnut, Chairman, President and Chief Executive
Officer. “In the infant bedding business, today’s millennial
parents are favoring the ‘naked crib’ which does not include items
such as bumpers and comforters. While this has reduced the
demand for full bedding sets and lowered the average price point of
our products in this business, we have partially offset this trend
with our expanded offerings in separates and a wide range of
popular new products in infant bedroom décor. Additionally,
due to the strength of the U.S. dollar, we have received price
reductions from our global suppliers, which we have partially
passed on to our customers. We also have reduced product
shipments to a customer that is experiencing credit problems, and
it is important to note that the timing of shipments, for both
initial sets and replenishment, can cause comparisons between
quarters to be difficult. All of these factors, along with
the continued sluggish retail environment, contributed to the
decline in sales in the second quarter. However, our position
in the industry remains strong, and we are confident in our
prospects for long-term sales growth and profitability.”
Financial Results
Net income for the second quarter of fiscal 2017
was $1.0 million, or $0.10 per diluted share, on net sales of $15.8
million, compared with net income of $1.6 million, or $0.16 per
diluted share, on net sales of $20.7 million for the second quarter
of fiscal 2016. Gross profit for the current-year quarter was
27.3% of net sales, down slightly from 27.5% in the prior-year
quarter.
For the six-month period, net income was $2.1
million, or $0.21 per diluted share, on net sales of $31.4 million,
compared with net income of $2.5 million, or $0.25 per diluted
share, on net sales of $38.6 million for the first six months of
fiscal 2016. Gross profit for the six-month period was 27.4%
of net sales, up from 27.2% in the prior-year period.
Board Declares Special and Quarterly
Dividends
The Company also announced that its Board of
Directors declared a special cash dividend on the Company’s Series
A common stock of $0.40 per share, along with a quarterly cash
dividend of $0.08 per share. Both dividends will be paid on January
6, 2017 to shareholders of record at the close of business on
December 16, 2016. “We are pleased to announce this special
dividend, which attests to the Board’s ongoing confidence in the
long-term strength of our Company and its commitment to returning
value to our shareholders. Upon payment of this special dividend,
Crown Crafts will have distributed $28.9 million in total dividends
to shareholders since 2010,” Chestnut said.
Conference Call
The Company will host a teleconference today at
1:00 p.m. Central Standard Time to discuss the Company’s results,
during which interested individuals will be given the opportunity
to ask appropriate questions. To join the teleconference,
dial (844) 861-5504 and ask to be joined into the Crown Crafts,
Inc. call. The teleconference can also be accessed in
listen-only mode by visiting the Company’s website at
www.crowncrafts.com. The financial information to be
discussed during the teleconference may be accessed prior to the
call on the investor relations portion of the Company’s
website. A telephone replay of the teleconference will be
available one hour after the end of the call through 4:00 p.m.
Central Standard Time on November 23, 2016. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10094449.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and distributes
infant, toddler and juvenile consumer products, including crib and
toddler bedding; blankets; nursery accessories; room décor; burp
cloths; bathing accessories; reusable and disposable bibs; and
disposable placemats, floor mats, toilet seat covers and changing
mats. The Company’s operating subsidiaries consist of Crown
Crafts Infant Products, Inc. in California and Hamco, Inc. in
Louisiana. Crown Crafts is among America’s largest producers
of infant bedding, bibs and bath items. The Company’s
products include licensed and branded collections, as well as
exclusive private label programs for certain of its customers.
The Company’s website is www.crowncrafts.com.
Forward-Looking Statements
The foregoing contains forward-looking statements
within the meaning of the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. Such statements are based upon management’s current
expectations, projections, estimates and assumptions. Words such as
“expects,” “believes,” “anticipates” and variations of such words
and similar expressions identify such forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties that may cause future results to differ materially
from those suggested by the forward-looking statements. These risks
include, among others, general economic conditions, including
changes in interest rates, in the overall level of consumer
spending and in the price of oil, cotton and other raw materials
used in the Company’s products, changing competition, changes in
the retail environment, the level and pricing of future orders from
the Company’s customers, the extent to which the Company’s business
is concentrated in a small number of customers, the Company’s
dependence upon third-party suppliers, including some located in
foreign countries, customer acceptance of both new designs and
newly-introduced product lines, actions of competitors that may
impact the Company’s business, disruptions to transportation
systems or shipping lanes used by the Company or its suppliers, and
the Company’s dependence upon licenses from third parties.
Reference is also made to the Company’s periodic filings with the
Securities and Exchange Commission for additional factors that may
impact the Company’s results of operations and financial condition.
The Company does not undertake to update the forward-looking
statements contained herein to conform to actual results or changes
in our expectations, whether as a result of new information, future
events or otherwise.
CROWN CRAFTS, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
SELECTED FINANCIAL DATA |
In thousands, except percentages and per share data |
(Unaudited) |
|
|
|
Three-Month Periods Ended |
|
Six-Month Periods Ended |
|
|
|
October 2, 2016 |
September 27, 2015 |
|
October 2, 2016 |
September 27, 2015 |
|
Net sales |
|
$ |
15,809 |
|
$ |
20,716 |
|
|
$ |
31,408 |
|
$ |
38,574 |
|
|
Gross profit |
|
|
4,309 |
|
|
5,706 |
|
|
|
8,596 |
|
|
10,487 |
|
|
Gross profit
percentage |
|
|
27.3 |
% |
|
27.5 |
% |
|
|
27.4 |
% |
|
27.2 |
% |
|
Income from
operations |
|
|
1,548 |
|
|
2,598 |
|
|
|
2,996 |
|
|
4,118 |
|
|
Income before income tax
expense |
|
|
1,558 |
|
|
2,586 |
|
|
|
3,048 |
|
|
4,118 |
|
|
Income tax expense |
|
|
559 |
|
|
1,021 |
|
|
|
946 |
|
|
1,626 |
|
|
Net income |
|
|
999 |
|
|
1,565 |
|
|
|
2,102 |
|
|
2,492 |
|
|
Basic earnings per
share |
|
$ |
0.10 |
|
$ |
0.16 |
|
|
$ |
0.21 |
|
$ |
0.25 |
|
|
Diluted earnings per
share |
|
$ |
0.10 |
|
$ |
0.16 |
|
|
$ |
0.21 |
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,011 |
|
|
10,017 |
|
|
|
9,995 |
|
|
10,038 |
|
|
Diluted |
|
|
10,056 |
|
|
10,062 |
|
|
|
10,036 |
|
|
10,083 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
SELECTED FINANCIAL DATA |
In thousands |
|
|
|
October 2, 2016 |
April 3, 2016 |
Cash and cash
equivalents |
|
$ |
10,219 |
|
$ |
7,574 |
|
Accounts receivable, net
of allowances |
|
|
15,899 |
|
|
20,796 |
|
Inventories |
|
|
15,532 |
|
|
14,785 |
|
Total current assets |
|
|
42,695 |
|
|
45,732 |
|
Finite-lived intangible
assets - net |
|
|
3,505 |
|
|
3,882 |
|
Goodwill |
|
|
1,126 |
|
|
1,126 |
|
Total assets |
|
$ |
49,262 |
|
$ |
52,415 |
|
|
|
|
|
Total current
liabilities |
|
|
7,810 |
|
|
12,185 |
|
|
|
|
|
Shareholders’ equity |
|
|
40,874 |
|
|
40,019 |
|
Total liabilities and
shareholders’ equity |
|
$ |
49,262 |
|
$ |
52,415 |
|
|
|
|
|
Contact:
Olivia W. Elliott
Vice President and Chief Financial Officer
(225) 647-9124
oelliott@crowncrafts.com
or
Halliburton Investor Relations
(972) 458-8000
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