Crown Crafts Reports Fiscal 2020 Second Quarter Results
November 13 2019 - 6:45AM
Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the second quarter of fiscal year 2020, which ended
September 29, 2019.
“Although sales for the quarter were slightly
down, our overall outlook remains strong. The decline in sales was
primarily due to timing of retail shipments as well as a
discontinued program with one retailer. Despite these factors, our
management team maintained tight cost controls, resulting in
increased gross margin and continued profitability this quarter,”
said E. Randall Chestnut, Chairman, President and Chief Executive
Officer.
“During the second quarter, we furthered our
focus on product innovation by attending and presenting at Kind +
Jugend 2019 in Cologne, Germany, one of the largest global trade
shows in the industry. We introduced 75 new products from the Crown
Crafts family of brands, and met with distributors and customers
representing approximately 30 countries around the world,” Chestnut
continued. “We remain excited about our global opportunities for
growth and the appeal of our products to consumers worldwide.”
Financial Results
Net income for the second quarter of fiscal 2020
was $1.8 million, or $0.18 per diluted share, on net sales of $18.6
million, compared with net income of $1.8 million, or $0.18 per
diluted share, on net sales of $20.5 million for the second quarter
of fiscal 2019. Gross profit for the current year quarter
increased to 31.6% of net sales from 31.0% of net sales in the
prior year quarter.
For the six-month fiscal period, net income was
$2.9 million, or $0.28 per diluted share, on net sales of $34.5
million, compared with net income of $2.1 million, or $0.21 per
diluted share, on net sales of $36.0 million for the first six
months of fiscal 2019. Current year net income was impacted
favorably by $292,000, or $0.03 per diluted share, due to a
reversal of a portion of reserves for unrecognized tax benefits and
the related interest and penalties that had been previously
accrued. Gross profit for the six-month period was 30.2% of
net sales, up from 29.2% in the prior-year period.
Board Declares Special and Quarterly Cash
Dividend
The Company announced on October 31, 2019 that
its Board of Directors declared a special cash dividend on the
Company’s Series A common stock of $0.25 per share, along with a
quarterly cash dividend of $0.08 per share. Both dividends
will be paid on January 3, 2020 to stockholders of record at the
close of business on December 13, 2019. “We are pleased to
have finished the second quarter debt-free and to once again reward
our stockholders with this special dividend, in addition to a
quarterly dividend. We remain committed to delivering value to
investors. Upon payment of this special dividend, Crown Crafts will
have distributed more than $40 million in total dividends to
shareholders since 2010,” Chestnut said. “These payments reflect
the Board’s confidence in the Company’s overall financial health
and future cash flow,” he continued.
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 20, 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
10135979.
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 |
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(225) 647-9124 |
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(972) 458-8000 |
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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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Six-Month Periods Ended |
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September 29, 2019 |
September 30, 2018 |
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September 29, 2019 |
September 30, 2018 |
Net sales |
$ |
18,560 |
$ |
20,536 |
|
$ |
34,502 |
$ |
35,996 |
Gross profit |
|
5,869 |
|
6,370 |
|
|
10,420 |
|
10,498 |
Gross profit percentage |
|
31.6% |
|
31.0% |
|
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30.2% |
|
29.2% |
Income from operations |
|
2,393 |
|
2,543 |
|
|
3,492 |
|
2,986 |
Income before income tax expense |
|
2,382 |
|
2,456 |
|
|
3,518 |
|
2,800 |
Income tax expense |
|
603 |
|
647 |
|
|
660 |
|
727 |
Net income |
|
1,779 |
|
1,809 |
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2,858 |
|
2,073 |
Basic earnings per share |
$ |
0.18 |
$ |
0.18 |
|
$ |
0.28 |
$ |
0.21 |
Diluted earnings per share |
$ |
0.18 |
$ |
0.18 |
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$ |
0.28 |
$ |
0.21 |
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Weighted Average Shares Outstanding: |
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Basic |
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10,143 |
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10,086 |
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10,131 |
|
10,078 |
Diluted |
|
10,143 |
|
10,088 |
|
|
10,131 |
|
10,080 |
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CONSOLIDATED BALANCE SHEETS |
SELECTED FINANCIAL DATA |
In thousands |
|
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September 29, 2019 |
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(Unaudited) |
March 31, 2019 |
Cash and cash equivalents |
$ |
200 |
$ |
143 |
Accounts receivable, net of allowances |
|
14,214 |
|
17,772 |
Inventories |
|
21,941 |
|
19,534 |
Total current assets |
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37,349 |
|
38,679 |
Operating lease right of use assets |
|
1,276 |
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- |
Finite-lived intangible assets - net |
|
6,005 |
|
6,432 |
Goodwill |
|
7,125 |
|
7,125 |
Total assets |
$ |
54,051 |
$ |
54,779 |
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Operating lease liabilities, current |
|
682 |
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- |
Total current liabilities |
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9,679 |
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7,711 |
Long-term debt |
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- |
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4,486 |
Operating lease liabilities, noncurrent |
|
655 |
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- |
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Shareholders’ equity |
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42,747 |
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41,388 |
Total liabilities and shareholders’ equity |
$ |
54,051 |
$ |
54,779 |
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