Crown Crafts Reports Fiscal 2020 Third Quarter Results
February 12 2020 - 6:45AM
Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the fiscal 2020 third quarter, which ended December 29,
2019.
“We are proud of our third quarter performance,
which includes a 4.0% increase in the amount of our gross profit in
spite of mostly flat sales compared with the same quarter from the
previous year,” said E. Randall Chestnut, Chairman, President and
Chief Executive Officer. “Throughout the past several months,
Crown Crafts has navigated a landscape filled with increasing
tariffs. We have worked with governmental authorities,
customers and suppliers to meet these challenges, and I am
delighted to say that 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 2020
was $2.1 million, or $0.21 per diluted share, on net sales of $18.6
million, compared with net income of $1.6 million, or $0.15 per
diluted share, on net sales of $18.7 million for the third quarter
of fiscal 2019. Gross profit of 31.3% of net sales for the
current year quarter was higher than the prior year quarter gross
profit of 30.0% of net sales.
For the nine-month fiscal period, net income was
$5.0 million, or $0.49 per diluted share, on net sales of $53.1
million, compared with net income of $3.6 million, or $0.36 per
diluted share, on net sales of $54.7 million for the first nine
months of fiscal 2019. Gross profit for the nine-month period
was 30.6% of net sales, increased from 29.4% in the prior-year
period.
The current year quarter and year-to-date
periods were impacted favorably by $276,000, or $0.03 per share,
due to the effect of certain tax credits. Current year net
income for the year-to-date period was also impacted favorably by
$292,000, or $0.03 per diluted share, due to the reversal of a
portion of reserves for unrecognized tax benefits and the related
interest and penalties that had been previously accrued. Net
income for the year-to-date period of the prior year was
unfavorably impacted when the Company incurred $210,000 in pre-tax
expenses to transfer its 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 in the prior year by $156,000.
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 3, 2020 to stockholders of record at the close of business on
March 13, 2020. “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 19, 2020. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10139008.
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,”
“intends,” “may,” “will,” “could,” “would” and variations of such
words and similar expressions may 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.
Elliott |
|
|
Vice President
and Chief Financial Officer |
or |
Halliburton
Investor Relations |
(225) 647-9124 |
|
(972) 458-8000 |
oelliott@crowncrafts.com |
|
|
|
|
|
|
|
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 |
|
Nine-Month
Periods Ended |
|
|
|
December 29,
2019 |
December 30,
2018 |
|
December 29,
2019 |
December 30,
2018 |
|
Net
sales |
|
$ |
18,587 |
|
$ |
18,668 |
|
|
$ |
53,089 |
|
$ |
54,664 |
|
|
Gross
profit |
|
|
5,821 |
|
|
5,597 |
|
|
|
16,241 |
|
|
16,095 |
|
|
Gross profit
percentage |
|
|
31.3 |
% |
|
30.0 |
% |
|
|
30.6 |
% |
|
29.4 |
% |
|
Income from
operations |
|
|
2,405 |
|
|
2,151 |
|
|
|
5,897 |
|
|
5,137 |
|
|
Income
before income tax expense |
|
|
2,377 |
|
|
2,091 |
|
|
|
5,895 |
|
|
4,891 |
|
|
Income tax
expense |
|
|
282 |
|
|
537 |
|
|
|
942 |
|
|
1,264 |
|
|
Net
income |
|
|
2,095 |
|
|
1,554 |
|
|
|
4,953 |
|
|
3,627 |
|
|
Basic
earnings per share |
|
$ |
0.21 |
|
$ |
0.15 |
|
|
$ |
0.49 |
|
$ |
0.36 |
|
|
Diluted
earnings per share |
|
$ |
0.21 |
|
$ |
0.15 |
|
|
$ |
0.49 |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,166 |
|
|
10,098 |
|
|
|
10,143 |
|
|
10,084 |
|
|
Diluted |
|
|
10,177 |
|
|
10,099 |
|
|
|
10,144 |
|
|
10,086 |
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS |
|
SELECTED FINANCIAL
DATA |
|
In thousands |
|
|
|
|
|
|
|
|
|
|
|
December 29,
2019 |
|
|
|
|
|
|
|
(Unaudited) |
March 31,
2019 |
|
|
|
|
Cash and
cash equivalents |
|
$ |
41 |
|
$ |
143 |
|
|
|
|
|
Accounts
receivable, net of allowances |
|
|
15,545 |
|
|
17,772 |
|
|
|
|
|
Inventories |
|
|
23,640 |
|
|
19,534 |
|
|
|
|
|
Total
current assets |
|
|
41,564 |
|
|
38,679 |
|
|
|
|
|
Operating
lease right of use assets |
|
|
5,416 |
|
|
- |
|
|
|
|
|
Finite-lived
intangible assets - net |
|
|
5,791 |
|
|
6,432 |
|
|
|
|
|
Goodwill |
|
|
7,125 |
|
|
7,125 |
|
|
|
|
|
Total
assets |
|
$ |
62,150 |
|
$ |
54,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
14,019 |
|
|
7,711 |
|
|
|
|
|
Long-term
debt |
|
|
- |
|
|
4,486 |
|
|
|
|
|
Operating
lease liabilities, noncurrent |
|
|
5,551 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
41,563 |
|
|
41,388 |
|
|
|
|
|
Total
liabilities and shareholders’ equity |
|
$ |
62,150 |
|
$ |
54,779 |
|
|
|
|
|
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