GONZALES, La., Jan. 6, 2011 /PRNewswire/ -- Crown Crafts, Inc.
(Nasdaq: CRWS) today announced that, due to shipment delays by one
of its major retail customers to adjust inventory levels, the
Company now anticipates its net sales for fiscal 2011 to be in the
$91.0 million to $93.0 million range,
Adjusted EBITDA (earnings before interest, income taxes,
depreciation, amortization, costs associated with the proxy contest
related to the 2010 annual meeting and compensation costs related
to non-vested stock awarded to certain employees in fiscal year
2011) to be in the $10.4 million to $10.9
million range and Adjusted Diluted Earnings Per Share (net
income per diluted share, adjusted to exclude the effect, net of
taxes, of the costs associated with the proxy contest related to
the 2010 annual meeting and compensation costs related to
non-vested stock awarded to certain employees in fiscal year 2011)
to be $0.56 to $0.59 per share. The
revised Adjusted EBITDA and Adjusted Diluted EPS projections also
include the impact of higher raw material and labor costs
associated with products produced in Asia, which the Company expects to partially
offset during the fourth quarter of fiscal 2011 through pricing
adjustments.
Earlier in fiscal 2011, the Company stated it expected fiscal
2011 net sales to be approximately $95
million, with Adjusted EBITDA of approximately $11.8 million and Adjusted Diluted EPS of
approximately $0.64 per diluted
share. The Company's fiscal year 2011 ends on April 3, 2011.
"While the timing of the delay is unfortunate, such inventory
management by major retail customers is not an uncommon occurrence
in our industry, especially given the erratic nature of the
macroeconomic recovery in 2010," said E.
Randall Chestnut, Chairman, President and Chief Executive
Officer. "Despite our revised guidance, our business outlook
remains strong and we remain on track to report terrific
operational and financial results for fiscal 2011.
"We view our sustained operational momentum and placement gains
as further evidence of the underlying strength of our product lines
and the effectiveness of our innovative marketing programs. We
continue to believe Crown Crafts is well positioned to fully
leverage the value-creating potential of our growth strategy and
our successfully integrated, recent acquisitions," Chestnut
said.
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and distributes infant,
toddler and juvenile consumer products, including crib and toddler
bedding and blankets; nursery and bath accessories; room decor;
burp cloths; bathing accessories; reusable and disposable bibs and
floor mats; and disposable placemats, toilet seat covers and
changing mats through its operating subsidiaries Hamco, Inc. in
Louisiana and Crown Crafts Infant
Products, Inc. in California.
Crown Crafts is America's largest producer of infant bedding,
bibs and bath items. The Company's products include licensed
and branded collections as well as exclusive private label programs
for certain of its customers. The Company's website is
www.crowncrafts.com.
Forward-Looking Statements
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 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.
CROWN
CRAFTS, INC. AND SUBSIDIARIES
NON-GAAP
RECONCILIATIONS
PROJECTED
AMOUNTS FOR THE FISCAL YEAR ENDING APRIL 3, 2011
In
thousands, except percentages and per share amounts
(Unaudited)
|
|
|
|
NET INCOME
TO ADJUSTED EBITDA
|
|
|
|
|
|
|
|
|
|
Guidance
|
|
Guidance
Announced
|
|
|
|
Announced
on
|
|
on January
6, 2011
|
|
|
|
August 3,
2010
|
|
Low
|
High
|
|
|
|
|
|
|
|
|
Net income
|
|
$
5,679
|
|
$ 4,843
|
$ 5,131
|
|
Interest expense
|
|
380
|
|
434
|
436
|
|
Interest income
|
|
(2)
|
|
(2)
|
(2)
|
|
Income tax expense on continuing
operations
|
|
3,524
|
|
2,963
|
3,136
|
|
Income tax benefit on
discontinued operations
|
|
(15)
|
|
(8)
|
(8)
|
|
Depreciation
|
|
300
|
|
254
|
254
|
|
Amortization
|
|
1,200
|
|
1,211
|
1,211
|
|
Proxy contest costs
|
|
401
|
|
401
|
401
|
|
Cost of non-vested stock awarded
to certain employees in fiscal year 2011
|
|
313
|
|
313
|
313
|
|
Adjusted
EBITDA
|
|
$
11,780
|
|
$ 10,409
|
$ 10,872
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
95,000
|
|
$ 91,013
|
$ 92,984
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a
percentage of net sales
|
|
12.4%
|
|
11.4%
|
11.7%
|
|
|
|
|
|
|
|
NET INCOME
TO ADJUSTED NET INCOME
|
|
|
|
|
|
|
|
|
|
Guidance
|
|
Guidance
Announced
|
|
|
|
Announced
on
|
|
on January
6, 2011
|
|
|
|
August 3,
2010
|
|
Low
|
High
|
|
|
|
|
|
|
|
|
Net income
|
|
$
5,679
|
|
$ 4,843
|
$ 5,131
|
|
Proxy contest costs, net of
taxes
|
|
249
|
|
249
|
249
|
|
Cost of non-vested stock awarded
to certain employees in fiscal year 2011, net of taxes
|
|
194
|
|
194
|
194
|
|
Adjusted net
income
|
|
$
6,122
|
|
$ 5,286
|
$ 5,574
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
|
9,500
|
|
9,500
|
9,500
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per
share
|
|
$
0.64
|
|
$ 0.56
|
$ 0.59
|
|
|
|
|
|
|
|
BASIS FOR THE PRESENTATION OF NON-GAAP FINANCIAL MEASURES
In addition to the Company's disclosure of its expected results
of operations in conformity with accounting principles generally
accepted in the United States of
America ("GAAP"), the Company has also presented certain
measures of its expected results of operations which are not
determined in accordance with GAAP. These non-GAAP financial
measures include Adjusted EBITDA, which excludes costs associated
with the proxy contest related to the 2010 annual meeting of
stockholders and compensation costs related to non-vested stock
awarded to certain employees in fiscal 2011. Adjusted EBITDA
is used by the Company internally to monitor the Company's
operating results and cash flow and to evaluate the performance of
its businesses. The Company has also presented its Adjusted
Diluted EPS on a basis which excludes the effect, net of taxes, of
the costs associated with the proxy contest related to the 2010
annual meeting of stockholders and compensation costs related to
non-vested stock awarded to certain employees in fiscal year 2011.
The Company believes that its presentation of Adjusted EBITDA and
Adjusted Diluted EPS are useful in that they are important
indicators of the Company's results of operations and its ability
to generate cash sufficient to reduce debt, make strategic
acquisitions and investments in capital expenditures, pay dividends
and meet its working capital requirements and other obligations as
they become due. The items excluded to calculate Adjusted
EBITDA and Adjusted Diluted EPS are significant components
that should be considered in understanding and assessing the
Company's financial performance. The non-GAAP financial
measures are presented as supplemental information and should be
considered in addition to, and not as a substitute for, the
Company's previously reported GAAP financial measures, including
its net income, cash flow provided by or used in operating,
investing or financing activities, and other measures of the
Company's financial performance and liquidity. Because
non-GAAP financial measures, by definition, are not determined in
accordance with GAAP, companies calculate them in varying ways.
Therefore, the non-GAAP financial measures presented by the
Company may not be comparable to similarly titled measures of other
companies.
SOURCE Crown Crafts, Inc.