Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the fourth quarter and fiscal year 2021, which ended
March 28, 2021.
“Fiscal 2021 was a phenomenal year for Crown
Crafts. Our strong performance continued in the fourth quarter with
higher net sales and gross profit, and improved customer and
product mix,” said E. Randall Chestnut, Chairman and Chief
Executive Officer. “We remain financially strong as we start the
new fiscal year, and we are proud of the flexibility and commitment
our employees have shown throughout this period of
uncertainty.”
“Excluding the impact of the Carousel closure,
we achieved improvement in net sales and net income in every
quarter of fiscal 2021 compared with the prior-year quarter,” said
Olivia Elliott, President and Chief Operating Officer. “This was
due to the ongoing popularity of our products in the marketplace
and the outstanding performance of our employees.”
Financial Results
Net income for the fourth quarter of fiscal 2021
was $238,000, or $0.02 per diluted share, on net sales of $21.8
million, compared with net income of $1.6 million, or $0.16 per
diluted share, on net sales of $20.3 million for the fourth quarter
of fiscal 2020. Gross profit for the current-year quarter was 26.7%
of net sales, up from 26.3% in the prior-year quarter.
For the fiscal year, net income was $6.1
million, or $0.60 per diluted share, on net sales of $79.2 million,
compared with net income of $6.6 million, or $0.65 per diluted
share, on net sales of $73.4 million for fiscal 2020. Gross profit
for the current year was 30.4% of net sales, up from 29.4% in the
prior year.
As previously announced, the Company closed the
operations of its Carousel Designs subsidiary effective May 21,
2021. The current year quarter and full year periods included a
loss of $2.2 million from the impairment of Carousel’s long-lived
assets. The after-tax impact of this impairment was $1.7 million,
or $0.17 per diluted share.
The current-year quarter and year-to-date
periods were impacted favorably by $320,000, 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. Current-year net income for the year-to-date
period was also impacted favorably by $74,000, or $0.01 per share,
due to the effect of certain tax credits. The quarter and year
ended March 29, 2020 were impacted favorably by $276,000, or $0.03
per diluted share, and $568,000, or $0.06 per diluted share,
respectively, 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 fiscal 2020 was
also impacted favorably by $273,000, or $0.03 per share, due to the
effect of certain tax credits.
Quarterly Cash Dividend
As announced on May 13, 2021, the 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
July 2, 2021 to stockholders of record at the close of business on
June 11, 2021.
Conference Call
The Company will host a teleconference today at
10:00 a.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 September 9, 2021. To access the
replay, dial (877) 344-7529 in the United States or (412) 317-0088
from international locations and refer to conference number
10157261.
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 two wholly owned subsidiaries, NoJo
Baby & Kids, Inc. and Sassy Baby, Inc., 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. 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:
Craig J. DemarestVice President and Chief Financial Officer(225)
647-9118cdemarest@crowncrafts.com
CROWN CRAFTS, INC.
AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMESELECTED FINANCIAL
DATAIn thousands, except percentages and per share data |
|
|
|
|
|
|
|
|
|
|
|
Three-Month
Periods Ended |
|
Twelve-Month
Periods Ended |
|
|
|
March 28,
2021 |
March 29,
2020 |
|
March 28,
2021 |
March 29,
2020 |
|
|
|
(Unaudited) |
|
|
|
|
Net
sales |
|
$ |
21,824 |
|
$ |
20,307 |
|
|
$ |
79,164 |
|
$ |
73,396 |
|
|
Gross
profit |
|
|
5,827 |
|
|
5,350 |
|
|
|
24,097 |
|
|
21,590 |
|
|
Gross profit
percentage |
|
|
26.7 |
% |
|
26.3 |
% |
|
|
30.4 |
% |
|
29.4 |
% |
|
Marketing
and administrative expenses |
|
|
3,616 |
|
|
3,510 |
|
|
|
14,218 |
|
|
13,853 |
|
|
Loss from
impairment of long-lived assets |
|
|
2,234 |
|
|
- |
|
|
|
2,234 |
|
|
- |
|
|
(Loss)
income from operations |
|
|
(23 |
) |
|
1,840 |
|
|
|
7,645 |
|
|
7,737 |
|
|
Income
before income tax expense |
|
|
70 |
|
|
1,873 |
|
|
|
7,723 |
|
|
7,768 |
|
|
Income tax
(benefit) expense |
|
|
(168 |
) |
|
265 |
|
|
|
1,642 |
|
|
1,207 |
|
|
Net
income |
|
|
238 |
|
|
1,608 |
|
|
|
6,081 |
|
|
6,561 |
|
|
Basic
earnings per share |
|
$ |
0.02 |
|
$ |
0.16 |
|
|
$ |
0.60 |
|
$ |
0.65 |
|
|
Diluted
earnings per share |
|
$ |
0.02 |
|
$ |
0.16 |
|
|
$ |
0.60 |
|
$ |
0.65 |
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
9,991 |
|
|
10,167 |
|
|
|
10,144 |
|
|
10,149 |
|
|
Diluted |
|
|
10,009 |
|
|
10,170 |
|
|
|
10,150 |
|
|
10,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETSSELECTED FINANCIAL DATAIn thousands |
|
|
|
|
|
|
|
|
|
|
|
March 28,
2021 |
|
March 29,
2020 |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
613 |
|
$ |
282 |
|
|
|
|
|
Accounts
receivable, net of allowances |
|
|
19,338 |
|
|
17,803 |
|
|
|
|
|
Inventories |
|
|
20,335 |
|
|
17,732 |
|
|
|
|
|
Total
current assets |
|
|
41,470 |
|
|
37,041 |
|
|
|
|
|
Operating
lease right of use assets |
|
|
4,068 |
|
|
4,896 |
|
|
|
|
|
Finite-lived
intangible assets - net |
|
|
3,163 |
|
|
5,577 |
|
|
|
|
|
Goodwill |
|
|
7,125 |
|
|
7,125 |
|
|
|
|
|
Total
assets |
|
$ |
58,082 |
|
$ |
57,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
12,946 |
|
|
6,479 |
|
|
|
|
|
Long-term
debt |
|
|
- |
|
|
2,578 |
|
|
|
|
|
Operating
lease liabilities, noncurrent |
|
|
2,641 |
|
|
4,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
41,865 |
|
|
42,436 |
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
58,082 |
|
$ |
57,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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