Crown Crafts, Inc. (NASDAQ:CRWS) (the “Company”) today reported
results for the fiscal 2018 second quarter, which ended October 1,
2017.
“We are pleased that our second quarter
performance included a 4.1% increase in net sales, along with
increases in gross margin and net income when you exclude the costs
to acquire Carousel Designs and credit fees associated with the
bankruptcy of a major customer,” said E. Randall Chestnut,
Chairman, President and Chief Executive Officer. “Despite the
current retail market challenges, we feel that we are in a solid
financial position going forward. We are excited about both our
innovative new product designs that appeal to millennial parents
and the addition of Carousel Designs as a key direct-to-consumer
sales channel.”
Financial Results
Net income for the second quarter of fiscal 2018
was $725,000, or $0.07 per diluted share, on net sales of $16.5
million, compared with net income of $999,000, or $0.10 per diluted
share, on net sales of $15.8 million for the second quarter of
fiscal 2017. Gross profit for the current-year quarter was
30.5% of net sales, up from 27.3% in the prior-year
quarter.
For the six-month period, net income was $1.2
million, or $0.12 per diluted share, on net sales of $30.1 million,
compared with net income of $2.1 million, or $0.21 per diluted
share, on net sales of $31.4 million for the first six months of
fiscal 2017. Gross profit for the six-month period was 28.6%
of net sales, up from 27.4% in the prior-year period.
The Company recorded certain pre-tax expenses
totaling $639,000 and $845,000 in the three and six-month periods
of fiscal year 2018, respectively, which did not occur in fiscal
year 2017. For the quarter, these expenses included $427,000
in credit coverage fees on a retailer that filed for bankruptcy
during the quarter and $212,000 in costs associated with the
Company’s acquisition of Carousel Designs. For the six-month
period, these expenses included $491,000 in credit coverage fees,
$264,000 in costs associated with the Company’s acquisition of
Carousel Designs, and $90,000 in audit fees associated with the
Company’s transition from a smaller reporting company to an
accelerated filer. On an after-tax basis, these expenses
totaled $405,000 and $541,000 for the three and six-month periods
of fiscal year 2018, respectively. Excluding these expenses,
net income and diluted earnings per share for the three-month
period of fiscal year 2018 would have been $1.1 million and $0.11,
respectively, and net income and diluted earnings per share for the
six-month period of fiscal year 2018 would have been $1.8 million
and $0.18, respectively.
Quarterly Cash Dividend
The Company also announced that its Board of
Directors declared a quarterly cash dividend on the Company’s
Series A common stock of $0.08 per share, which will be paid on
January 5, 2018 to shareholders of record at the close of business
on December 15, 2017. “Once again, Crown Crafts is pleased to
offer a dividend payment that reflects the Board’s confidence in
the business and our ongoing commitment to providing value to
stockholders,” 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 16, 2017. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10113775.
About Crown Crafts, Inc.
Crown Crafts, Inc., founded in 1957, is one of
America’s largest producers of infant bedding, toddler bedding and
bibs. Crown Crafts, Inc. operates through its three wholly owned
subsidiaries, Crown Crafts Infant Products, Inc., Hamco, Inc. and
Carousel Designs, LLC. The Company’s subsidiaries market a variety
of infant, toddler and juvenile products under Company-owned
trademarks as well as licensed collections and exclusive private
label programs. Sales are made directly to retailers such as mass
merchants, large chain stores and juvenile specialty stores, as
well as directly to consumers through www.babybedding.com. For more
information, visit the Company’s website at
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
Company’s ability to successfully integrate newly acquired
businesses, 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.
Contact:
Olivia W. ElliottVice President and Chief Financial Officer(225)
647-9124oelliott@crowncrafts.com
or
Halliburton Investor Relations(972) 458-8000
|
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 1, 2017 |
|
October 2, 2016 |
|
October 1, 2017 |
|
October 2, 2016 |
|
Net sales |
|
$ |
16,461 |
|
|
$ |
15,809 |
|
|
$ |
30,108 |
|
|
$ |
31,408 |
|
|
Gross profit |
|
|
5,022 |
|
|
|
4,309 |
|
|
|
8,624 |
|
|
|
8,596 |
|
|
Gross profit
percentage |
|
|
30.5 |
% |
|
|
27.3 |
% |
|
|
28.6 |
% |
|
|
27.4 |
% |
|
Income from
operations |
|
|
1,215 |
|
|
|
1,548 |
|
|
|
1,916 |
|
|
|
2,996 |
|
|
Income before income
tax expense |
|
|
1,225 |
|
|
|
1,558 |
|
|
|
1,946 |
|
|
|
3,048 |
|
|
Income tax expense |
|
|
500 |
|
|
|
559 |
|
|
|
703 |
|
|
|
946 |
|
|
Net income |
|
|
725 |
|
|
|
999 |
|
|
|
1,243 |
|
|
|
2,102 |
|
|
Basic earnings per
share |
|
$ |
0.07 |
|
|
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.21 |
|
|
Diluted earnings per
share |
|
$ |
0.07 |
|
|
$ |
0.10 |
|
|
$ |
0.12 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,074 |
|
|
|
10,011 |
|
|
|
10,059 |
|
|
|
9,995 |
|
|
Diluted |
|
|
10,078 |
|
|
|
10,056 |
|
|
|
10,067 |
|
|
|
10,036 |
|
|
|
CONSOLIDATED BALANCE SHEETS |
SELECTED FINANCIAL DATA |
In thousands |
|
|
|
October 1, 2017 |
|
|
|
|
|
(Unaudited) |
|
April 2, 2017 |
|
Cash and cash
equivalents |
|
$ |
3,242 |
|
$ |
7,892 |
|
Accounts receivable,
net of allowances |
|
|
12,817 |
|
|
15,614 |
|
Inventories |
|
|
16,771 |
|
|
15,821 |
|
Total current
assets |
|
|
33,886 |
|
|
41,110 |
|
Finite-lived intangible
assets - net |
|
|
5,559 |
|
|
3,128 |
|
Goodwill |
|
|
6,505 |
|
|
1,126 |
|
Total assets |
|
$ |
48,738 |
|
$ |
47,184 |
|
|
|
|
|
|
Total current
liabilities |
|
|
9,095 |
|
|
7,573 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
38,891 |
|
|
38,923 |
|
Total liabilities and
shareholders’ equity |
|
$ |
48,738 |
|
$ |
47,184 |
|
|
|
|
|
|
|
|
|
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