Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the fiscal 2019 third quarter, which ended December 30,
2018.
“We are proud of our third quarter performance,
which includes a sales increase of 6.8% and net income that is
almost triple the same quarter from the previous year,” said E.
Randall Chestnut, Chairman, President and Chief Executive Officer.
“Throughout the last year, Crown Crafts has navigated a
rapidly changing retail landscape. Customer bankruptcies, store
closings and liquidations have all presented unusual challenges,
but our team has adjusted and performed well. We are very
pleased to share the results of a strong third quarter.”
Financial Results
Net income for the third quarter of fiscal 2019
was $1.6 million, or $0.15 per diluted share, on net sales of $18.7
million, compared with net income of $531,000, or $0.05 per diluted
share, on net sales of $17.5 million for the third quarter of
fiscal 2018. Gross profit of 30.0% of net sales for the
current year quarter was comparable to the prior year quarter gross
profit of 30.1% of net sales.
For the nine-month fiscal period, net income was
$3.6 million, or $0.36 per diluted share, on net sales of $54.7
million, compared with net income of $1.8 million, or $0.18 per
diluted share, on net sales of $47.6 million for the first nine
months of fiscal 2018. Gross profit for the nine-month period
was 29.4% of net sales, up slightly from 29.2% in the prior-year
period.
During the current year-to-date period, the
Company incurred $210,000 in pre-tax expenses to move Sassy-branded
inventory from Grand Rapids, Michigan to the Company’s facility in
Compton, California. On an after-tax basis, these costs
negatively affected the year-to-date period by $156,000. In
the prior year, the Company recorded certain post-tax expenses
totaling $170,000 and $1.2 million in the three and nine-month
periods of fiscal year 2018, respectively, which did not reoccur in
fiscal year 2019.
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
April 5, 2019 to stockholders of record at the close of business on
March 15, 2019. “We are pleased to reward our stockholders
with another quarterly dividend payment,” 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 February 14, 2019. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10128222.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and
distributes infant, toddler and juvenile consumer products.
Founded in 1957, Crown Crafts is one of America’s largest producers
of infant bedding, toddler bedding, bibs and developmental toys.
The Company operates through its three wholly owned subsidiaries,
NoJo Baby & Kids, Inc., Sassy Baby, Inc. and Carousel Designs,
LLC, which 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.
Contact: |
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Olivia W. Elliott |
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Vice President and
Chief Financial Officer |
or |
Halliburton Investor Relations |
(225) 647-9124
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(972)
458-8000 |
oelliott@crowncrafts.com |
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CROWN CRAFTS, INC. AND SUBSIDIARIESCONSOLIDATED
STATEMENTS OF INCOMESELECTED FINANCIAL DATAIn thousands, except
percentages and per share data(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended |
|
Nine-Month Periods Ended |
|
|
|
December 30, 2018 |
|
December 31, 2017 |
|
December 30, 2018 |
|
December 31, 2017 |
|
|
|
|
|
Net sales |
|
$ |
18,668 |
|
$ |
17,476 |
|
$ |
54,664 |
|
$ |
47,584 |
|
Gross profit |
|
|
5,597 |
|
|
5,269 |
|
|
16,095 |
|
|
13,893 |
|
Gross profit
percentage |
|
|
30.0% |
|
|
30.1% |
|
|
29.4% |
|
|
29.2% |
|
Income from
operations |
|
|
2,151 |
|
|
1,613 |
|
|
5,137 |
|
|
3,529 |
|
Income before income
tax expense |
|
|
2,091 |
|
|
1,578 |
|
|
4,891 |
|
|
3,524 |
|
Income tax expense |
|
|
537 |
|
|
1,047 |
|
|
1,264 |
|
|
1,750 |
|
Net income |
|
|
1,554 |
|
|
531 |
|
|
3,627 |
|
|
1,774 |
|
Basic earnings per
share |
|
$ |
0.15 |
|
$ |
0.05 |
|
$ |
0.36 |
|
$ |
0.18 |
|
Diluted earnings per
share |
|
$ |
0.15 |
|
$ |
0.05 |
|
$ |
0.36 |
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,098 |
|
|
10,086 |
|
|
10,084 |
|
|
10,068 |
|
Diluted |
|
|
10,099 |
|
|
10,090 |
|
|
10,086 |
|
|
10,075 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETSSELECTED FINANCIAL
DATAIn thousands
|
|
|
|
|
|
|
December 30, 2018 |
|
|
|
|
|
(Unaudited) |
|
April 1, 2018 |
|
Cash and cash
equivalents |
|
$ |
63 |
|
$ |
215 |
|
Accounts receivable,
net of allowances |
|
|
15,009 |
|
|
18,498 |
|
Inventories |
|
|
22,165 |
|
|
19,788 |
|
Total current
assets |
|
|
38,803 |
|
|
39,754 |
|
Finite-lived intangible
assets - net |
|
|
6,644 |
|
|
7,272 |
|
Goodwill |
|
|
7,125 |
|
|
7,125 |
|
Total assets |
|
$ |
54,954 |
|
$ |
56,581 |
|
|
|
|
|
|
Total current
liabilities |
|
|
11,229 |
|
|
6,788 |
|
Long-term debt |
|
|
1,865 |
|
|
9,458 |
|
|
|
|
|
|
Shareholders’
equity |
|
|
40,710 |
|
|
39,318 |
|
Total liabilities and
shareholders’ equity |
|
$ |
54,954 |
|
$ |
56,581 |
|
|
|
|
|
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