Crown Crafts Reports Fiscal 2019 First Quarter Results
August 09 2018 - 6:45AM
Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the fiscal 2019 first quarter, which ended July 1,
2018.
“While we saw an increase in net sales due to
the addition of our two recent acquisitions, Carousel Designs and
Sassy, this quarter presented some unusual challenges,” said E.
Randall Chestnut, Chairman, President and Chief Executive
Officer.
“The bankruptcy and liquidation of one of our
largest customers, which represented $3.4 million in sales in the
prior year quarter, continued to affect the Company. Although we
anticipate replacing a portion of the Babies “R” Us sales volume
through reallocation to existing customers in the latter half of
the year, the Babies “R” Us deeply discounted liquidation sale
activity competed against our core business. This affected the
Company in what has been our traditionally weakest quarter of the
year and made it more difficult to cover our fixed costs,” he
continued. “Additionally, as previously announced, in April 2018 we
completed the move of the Sassy inventory from Grand Rapids,
Michigan to our warehouse in Compton, California, which had a
negative impact on diluted earnings per share.”
Financial Results
Net income for the first quarter of fiscal 2019
was $264,000, or $0.03 per diluted share, on net sales of $15.5
million, compared with net income of $518,000, or $0.05 per diluted
share, on net sales of $13.6 million for the first quarter of
fiscal 2018. Gross profit for the current year quarter increased
slightly to 26.7% of net sales from 26.4% of net sales in the prior
year quarter.
The Company incurred $210,000 in pre-tax
expenses to move Sassy-branded inventory from Grand Rapids,
Michigan to its facility in Compton, California. On an after-tax
basis, these costs negatively affected the current-year quarter by
$161,000, or $0.02 per diluted share.
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
October 5, 2018 to shareholders of record at the close of business
on September 14, 2018. “We are pleased that the Company’s stable
financial position enables us to continue to reward our
stockholders with this cash dividend,” Chestnut said.
Conference Call
The Company will host a teleconference today at
1:00 p.m. Central Daylight 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 Daylight Time on August 16, 2018. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10122780.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and
distributes infant, toddler and juvenile consumer products, Crown
Crafts, Inc., founded in 1957, is one of America’s largest
producers of infant bedding, toddler bedding, bibs and
developmental toys. Crown Crafts, Inc. operates through its three
wholly owned subsidiaries, Crown Crafts Infant Products, Inc.,
Hamco, Inc. (which includes the Sassy product line) 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.
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.
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Contact: |
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Olivia W. Elliott |
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or
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Halliburton Investor
Relations |
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Vice President and
Chief Financial Officer |
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(972) 458-8000 |
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(225) 647-9124 |
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oelliott@crowncrafts.com |
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CROWN CRAFTS, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
SELECTED FINANCIAL DATA |
In thousands, except percentages and per share
data |
(Unaudited) |
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Three-Month Periods Ended |
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July 1, 2018 |
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July 2, 2017 |
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(Unaudited) |
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Net sales |
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$ |
15,460 |
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$ |
13,647 |
Gross profit |
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4,128 |
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3,602 |
Gross profit
percentage |
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26.7% |
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26.4% |
Income from
operations |
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443 |
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701 |
Income before income
tax expense |
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344 |
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721 |
Income tax expense |
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80 |
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203 |
Net income |
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264 |
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518 |
Basic earnings per
share |
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$ |
0.03 |
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$ |
0.05 |
Diluted earnings per
share |
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$ |
0.03 |
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$ |
0.05 |
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Weighted Average Shares
Outstanding: |
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Basic |
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10,070 |
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10,044 |
Diluted |
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10,072 |
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10,055 |
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CONSOLIDATED BALANCE SHEETS |
SELECTED FINANCIAL DATA |
In thousands |
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July 1, 2018 |
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(Unaudited) |
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April 1, 2018 |
Cash and cash
equivalents |
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$ |
199 |
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$ |
215 |
Accounts receivable,
net of allowances |
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14,561 |
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18,498 |
Inventories |
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20,759 |
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19,788 |
Total current
assets |
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36,783 |
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39,754 |
Finite-lived intangible
assets - net |
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7,072 |
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7,272 |
Goodwill |
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7,125 |
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7,125 |
Total assets |
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$ |
53,354 |
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$ |
56,581 |
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Total current
liabilities |
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9,678 |
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6,788 |
Long-term debt |
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3,840 |
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9,458 |
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Shareholders’
equity |
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38,791 |
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39,318 |
Total liabilities and
shareholders’ equity |
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$ |
53,354 |
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$ |
56,581 |
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