Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the third quarter of fiscal year 2021, which ended
December 27, 2020.
“Demand for our products was strong in the third
quarter and has remained so throughout the first nine months of
fiscal 2021,” said E. Randall Chestnut, Chairman and Chief
Executive Officer. “Our financial performance reflects the success
of our strategies and the continued popularity of our product
portfolio, which has remained aligned with consumer preferences
even in these most challenging times,” Chestnut continued.
“In addition to our positive momentum in sales
and earnings, our cash flows and balance sheet also remained strong
in the third quarter,” said Olivia Elliott, President, Chief
Operating Officer and Chief Financial Officer. “As we continue to
operate from a position of financial strength, we will maintain our
focus on generating cash flow, controlling costs and developing new
products for the marketplace,” Elliott continued.
Financial Results
Net income for the third quarter of fiscal 2021
was $2.1 million, or $0.21 per diluted share, on net sales of $19.5
million, compared with net income of $2.1 million, or $0.21 per
diluted share, on net sales of $18.6 million for the third quarter
of fiscal 2020. Gross profit for the current year quarter increased
to 31.6% of net sales, up from 31.3% of net sales in the prior-year
quarter.
For the nine-month fiscal period, net income was
$5.8 million, or $0.57 per diluted share, on net sales of $57.3
million, compared with net income of $5.0 million, or $0.49 per
diluted share, on net sales of $53.1 million for the first nine
months of fiscal 2020. Gross profit for the current year nine-month
period was 31.9% of net sales, up from 30.6% of net sales in the
prior-year period.
The recognition of certain tax credits favorably
impacted the current year quarter and year-to-date periods by
$74,000, or $0.01 per diluted share, and the prior year quarter and
year-to-date periods by $274,000, or $0.03 per diluted share. Prior
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
recorded.
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 2, 2021 to stockholders of record at the close of business on
March 12, 2021. “Our Board remains confident in the ongoing
strength of our Company, including its financial position,
management team and business operations, to deliver consistently
solid returns to shareholders for both the short term and the long
term,” 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 Daylight Time on May 11, 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 10151502.
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, the
impact of the COVID-19 pandemic on the Company’s business
operations, 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. ElliottPresident, Chief Operating Officer and
Chief Financial Officer(225)
647-9124oelliott@crowncrafts.com
CROWN CRAFTS, INC. AND SUBSIDIARIESCONSOLIDATED
STATEMENTS OF INCOMESELECTED FINANCIAL DATAIn thousands, except
percentages and per share data(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three-Month
Periods Ended |
|
Nine-Month
Periods Ended |
|
|
|
December 27,
2020 |
December 29,
2019 |
|
December 27,
2020 |
December 29,
2019 |
|
Net sales |
|
$ |
19,476 |
|
$ |
18,587 |
|
|
$ |
57,340 |
|
$ |
53,089 |
|
|
Gross
profit |
|
|
6,153 |
|
|
5,821 |
|
|
|
18,270 |
|
|
16,241 |
|
|
Gross profit
percentage |
|
|
31.6% |
|
|
31.3% |
|
|
|
31.9% |
|
|
30.6% |
|
|
Income from
operations |
|
|
2,733 |
|
|
2,405 |
|
|
|
7,668 |
|
|
5,897 |
|
|
Income
before income tax expense |
|
|
2,723 |
|
|
2,377 |
|
|
|
7,653 |
|
|
5,895 |
|
|
Income tax
expense |
|
|
582 |
|
|
282 |
|
|
|
1,810 |
|
|
942 |
|
|
Net
income |
|
|
2,141 |
|
|
2,095 |
|
|
|
5,843 |
|
|
4,953 |
|
|
Basic
earnings per share |
|
$ |
0.21 |
|
$ |
0.21 |
|
|
$ |
0.57 |
|
$ |
0.49 |
|
|
Diluted
earnings per share |
|
$ |
0.21 |
|
$ |
0.21 |
|
|
$ |
0.57 |
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,208 |
|
|
10,166 |
|
|
|
10,195 |
|
|
10,143 |
|
|
Diluted |
|
|
10,224 |
|
|
10,177 |
|
|
|
10,200 |
|
|
10,144 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETSSELECTED FINANCIAL
DATAIn thousands
|
|
|
|
|
|
|
|
|
|
December 27,
2020 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
March 29,
2020 |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
3,658 |
|
$ |
282 |
|
|
|
|
|
Accounts
receivable, net of allowances |
|
|
18,249 |
|
|
17,803 |
|
|
|
|
|
Inventories |
|
|
22,842 |
|
|
17,732 |
|
|
|
|
|
Total
current assets |
|
|
46,941 |
|
|
37,041 |
|
|
|
|
|
Operating
lease right of use assets |
|
|
4,528 |
|
|
4,896 |
|
|
|
|
|
Finite-lived
intangible assets - net |
|
|
4,981 |
|
|
5,577 |
|
|
|
|
|
Goodwill |
|
|
7,125 |
|
|
7,125 |
|
|
|
|
|
Total
assets |
|
$ |
65,806 |
|
$ |
57,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
17,192 |
|
|
6,479 |
|
|
|
|
|
Long-term
debt |
|
|
524 |
|
|
2,578 |
|
|
|
|
|
Operating
lease liabilities, noncurrent |
|
|
4,824 |
|
|
4,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
42,441 |
|
|
42,436 |
|
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
65,806 |
|
$ |
57,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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