Crown Crafts Reports Fiscal 2023 Third Quarter Results
February 15 2023 - 7:04AM
Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) a designer,
marketer and distributor of infant, toddler and juvenile consumer
products, today reported results for the third quarter of fiscal
year 2023, which ended January 1, 2023.
Fiscal 2023 Third Quarter
Summary
- Net sales of $19.0 million compared
to $22.7 million in the prior-year quarter
- Net income of $1.3 million or $0.13
per diluted share
- Cash and equivalents increased
sequentially from $2.3 million to $3.1 million
- Inventories of $25.8 million
compared to $27.7 million in the second quarter of fiscal 2023
- Declared quarterly dividend of
$0.08 per share of Series A common stock
“Our fiscal third quarter results reflect the
ongoing macroeconomic challenges facing our customers and the
overall retail industry. We believe that we are well-positioned to
continue to navigate these issues thanks to our strong customer
relationships and product offerings,” said Olivia W. Elliott,
President and Chief Executive Officer of the Company. “We also
effectively managed our inventory, reducing our balance in a
quarter where levels historically rise, and increased our cash
position versus the second quarter. We will continue our efforts to
diligently manage our inventory levels and improve profitability
across our business.”
Financial Results
Net income for the third quarter of fiscal 2023
was $1.3 million, or $0.13 per diluted share, on net sales of $19.0
million, compared with net income of $2.4 million, or $0.24 per
diluted share, on net sales of $22.7 million for the third quarter
of fiscal 2022. Gross profit for the current-year quarter was 23.7%
of net sales, compared to 27.1% of net sales in the prior-year
quarter.
For the nine-month fiscal period, net income was
$4.8 million, or $0.48 per diluted share, on net sales of $53.4
million, compared with net income of $7.5 million, or $0.74 per
diluted share, on net sales of $61.7 million for the first nine
months of fiscal 2022. Gross profit for the first nine months of
fiscal 2023 was 28.3% of net sales, up from 27.4% of net sales in
the prior-year period. Fiscal 2022 net income was impacted
favorably by a pre- and post-tax $2.0 million gain on
extinguishment of debt related to the forgiveness of the Company’s
Paycheck Protection Program Loan (the “PPP Loan”). The prior year
also included net sales of $638,000 and a net loss of $797,000
associated with the Carousel Designs business, which ceased
operations in May 2021.Excluding the impact of the PPP Loan and
Carousel from the prior-year nine-month period, prior-year net
sales, gross margin percentage, net income and diluted earnings per
share would have been $61.0 million, 28.8%, $6.3 million and $0.63,
respectively.
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 7, 2023, to stockholders of record at the close of business
on March 17, 2023. “The Board has evaluated both the current
strength of our Company and our long-term strategy for profitable
growth, and as a result, we are pleased to announce this dividend
as part of our commitment to return long-term value to our
stockholders,” Elliott said.
Conference Call
The Company will host a teleconference today at
10:00 a.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 Daylight Time on May 15, 2023. To access the replay,
dial (877) 344-7529 in the United States or (412) 317-0088 from
international locations and enter replay access code 2817791.
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, toys and disposable
products. 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.
Company Contact:
Craig J. DemarestVice President and
Chief Financial Officer (225) 647-9118cdemarest@crowncrafts.com
Investor Relations:
Three Part AdvisorsSteven Hooser,
Partner or John Beisler, Senior Vice President(817) 310-8776
|
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 |
|
|
January 1,
2023 |
December 26,
2021 |
|
January 1,
2023 |
December 26,
2021 |
|
Net sales |
$ |
19,004 |
|
$ |
22,742 |
|
|
$ |
53,440 |
|
$ |
61,674 |
|
|
Gross
profit |
|
4,506 |
|
|
6,170 |
|
|
|
15,105 |
|
|
16,894 |
|
|
Gross profit
percentage |
|
23.7% |
|
|
27.1% |
|
|
|
28.3% |
|
|
27.4% |
|
|
Income from
operations |
|
1,764 |
|
|
3,076 |
|
|
|
6,214 |
|
|
7,270 |
|
|
Gain on
extinguishment of debt |
|
- |
|
|
- |
|
|
|
- |
|
|
1,985 |
|
|
Income
before income tax expense |
|
1,768 |
|
|
3,037 |
|
|
|
6,379 |
|
|
9,289 |
|
|
Income tax
expense |
|
420 |
|
|
605 |
|
|
|
1,557 |
|
|
1,806 |
|
|
Net
income |
|
1,348 |
|
|
2,432 |
|
|
|
4,822 |
|
|
7,483 |
|
|
Basic and
diluted earnings per share |
$ |
0.13 |
|
$ |
0.24 |
|
|
$ |
0.48 |
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding: |
|
|
|
|
|
|
Basic |
|
10,118 |
|
|
10,078 |
|
|
|
10,096 |
|
|
10,045 |
|
|
Diluted |
|
10,133 |
|
|
10,107 |
|
|
|
10,116 |
|
|
10,075 |
|
|
CONSOLIDATED BALANCE
SHEETS |
SELECTED FINANCIAL
DATA |
In thousands |
|
|
|
|
|
|
January 1,
2023 |
|
|
|
(Unaudited) |
April 3,
2022 |
|
Cash and cash equivalents |
$ |
3,076 |
|
$ |
1,598 |
|
Accounts
receivable, net of allowances |
|
18,874 |
|
|
23,226 |
|
Inventories |
|
25,782 |
|
|
20,653 |
|
Total
current assets |
|
49,233 |
|
|
46,508 |
|
Operating
lease right of use assets |
|
1,320 |
|
|
2,423 |
|
Finite-lived
intangible assets - net |
|
2,293 |
|
|
2,654 |
|
Goodwill |
|
7,125 |
|
|
7,125 |
|
Total
assets |
$ |
61,369 |
|
$ |
60,155 |
|
|
|
|
|
Total
current liabilities |
|
9,922 |
|
|
11,786 |
|
Operating
lease liabilities, noncurrent |
|
443 |
|
|
809 |
|
|
|
|
|
Shareholders’ equity |
|
48,952 |
|
|
45,801 |
|
Total
liabilities and shareholders’ equity |
$ |
61,369 |
|
$ |
60,155 |
|
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