Crown Crafts Announces Financial Results for Fourth Quarter and Full Year Fiscal 2023
June 22 2023 - 9:08AM
Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today reported
results for the fourth quarter and fiscal year 2023, which ended
April 2, 2023.
Fourth Quarter Summary
- Net sales of $21.6 million,
compared to $25.7 million in the prior-year quarter
- Net income of $828,000, or $0.08
per diluted share, compared to $2.4 million, or $0.24 per diluted
share, in the prior-year quarter
- Declared quarterly dividend of $0.08 per share of Series A
common stock
- Acquired Manhattan Group, LLC
(“Manhattan Toy”) on March 17, 2023
Fiscal 2023 Summary
- Net sales of $75.1 million,
compared to $87.4 million in fiscal 2022
- Gross margin of 26.4% of net sales,
compared to 26.7% in the prior year
- Net income of $5.7 million, or
$0.56 per diluted share, compared to $9.9 million, or $0.98 per
diluted share, in the prior year
“Our fiscal 2023 results reflect the multiple
headwinds we faced throughout the year, including excess inventory
levels related to the port delays that occurred at the end of
fiscal 2022, inflationary pressures across our business and lower
consumer spending trends, which resulted in reduced orders from
customers. Despite these challenges, we minimized the impact on
gross margins, reduced our marketing and administrative expenses
and reported our thirteenth consecutive year of profitability,”
said Olivia Elliott, President and Chief Executive Officer. “The
acquisition of Manhattan Toy at the end of fiscal 2023 provides
multiple opportunities to increase our top and bottom line in
fiscal 2024, including better purchasing power, broader product
offerings and greater distribution channels. Overall, we remain
well-positioned to withstand the current macroeconomic environment
thanks to our strong balance sheet and look forward to delivering
sustained profitable growth.”
Fourth Quarter Fiscal 2023
Results
Net sales for the fourth quarter of fiscal 2023
were $21.6 million, compared to $25.7 million in the prior-year
quarter. Gross margin was 21.9% of net sales, compared to 25.0% in
the fourth quarter of fiscal 2022. Marketing and administrative
expenses were $3.8 million in the current year quarter, compared to
$3.4 million a year ago. The current year quarter included
approximately $358,000 in expenses related to the acquisition of
Manhattan Toy. Net income was $828,000, or $0.08 per diluted share,
compared to $2.4 million, or $0.24 per diluted share in the
prior-year quarter.
Fiscal Year 2023 Results
Net sales for fiscal 2023 were $75.1 million,
compared to $87.4 million in fiscal 2022. Gross margin was 26.4% of
net sales, compared to 26.7% in the prior year. Marketing and
administrative expenses in the current year were $12.7 million
compared to $13.0 million a year ago. Net income was $5.7 million,
or $0.56 per diluted share, compared to $9.9 million, or $0.98 per
diluted share in fiscal 2022.
The results for the fourth quarter and full year
of fiscal 2022 included an additional week compared with the fourth
quarter and full year of fiscal 2023.
Quarterly Cash Dividend
As announced on May 15, 2023, 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 7, 2023 to stockholders of record at the close of business on
June 16, 2023.
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 join the Crown Crafts 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 22, 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 3562443.
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 four wholly owned
subsidiaries, NoJo Baby & Kids, Inc., Sassy Baby, Inc.,
Manhattan Group LLC, and Manhattan Toy Europe, Limited, 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.
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
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: |
Investor Relations: |
|
|
Craig J. Demarest |
Three Part Advisors |
Vice President and Chief Financial Officer |
Steven Hooser, Partner, or |
cdemarest@crowncrafts.com |
John Beisler, Senior Vice President |
(225) 647-9118 |
(817) 310-8776 |
CROWN CRAFTS, INC.
AND SUBSIDIARIES |
|
CONSOLIDATED
STATEMENTS OF INCOME |
|
SELECTED FINANCIAL
DATA |
|
In thousands, except
percentages and per share data |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
13-Week |
14-Week |
|
52-Week |
53-Week |
|
|
|
Period
Ended |
Period
Ended |
|
Period
Ended |
Period
Ended |
|
|
|
April 2,
2023 |
April 3,
2022 |
|
April 2,
2023 |
April 3,
2022 |
|
Net sales |
|
$ |
21,613 |
|
$ |
25,686 |
|
|
$ |
75,053 |
|
$ |
87,360 |
|
|
Gross
profit |
|
|
4,723 |
|
|
6,414 |
|
|
|
19,828 |
|
|
23,308 |
|
|
Gross profit
percentage |
|
|
21.9% |
|
|
25.0% |
|
|
|
26.4% |
|
|
26.7% |
|
|
Marketing
and administrative expenses |
|
|
3,764 |
|
|
3,378 |
|
|
|
12,655 |
|
|
13,002 |
|
|
Income from
operations |
|
|
959 |
|
|
3,036 |
|
|
|
7,173 |
|
|
10,306 |
|
|
Gain on
extinguishment of debt |
|
|
- |
|
|
- |
|
|
|
- |
|
|
1,985 |
|
|
Income
before income tax expense |
|
|
1,047 |
|
|
3,037 |
|
|
|
7,426 |
|
|
12,326 |
|
|
Income tax
expense |
|
|
219 |
|
|
602 |
|
|
|
1,776 |
|
|
2,408 |
|
|
Net
income |
|
|
828 |
|
|
2,435 |
|
|
|
5,650 |
|
|
9,918 |
|
|
Basic
earnings per share |
|
$ |
0.08 |
|
$ |
0.24 |
|
|
$ |
0.56 |
|
$ |
0.99 |
|
|
Diluted
earnings per share |
|
$ |
0.08 |
|
$ |
0.24 |
|
|
$ |
0.56 |
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
|
|
10,121 |
|
|
10,080 |
|
|
|
10,102 |
|
|
10,055 |
|
|
Diluted |
|
|
10,136 |
|
|
10,103 |
|
|
|
10,120 |
|
|
10,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS |
|
SELECTED FINANCIAL
DATA |
|
In thousands |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
April 2,
2023 |
April 3,
2022 |
|
Cash and
cash equivalents |
|
|
|
|
$ |
1,742 |
|
$ |
1,598 |
|
|
Accounts
receivable, net of allowances |
|
|
|
|
|
22,808 |
|
|
23,226 |
|
|
Inventories |
|
|
|
|
|
34,211 |
|
|
20,653 |
|
|
Total
current assets |
|
|
|
|
|
60,375 |
|
|
46,508 |
|
|
Operating
lease right of use assets |
|
|
|
|
|
17,305 |
|
|
2,423 |
|
|
Finite-lived
intangible assets - net |
|
|
|
|
|
3,473 |
|
|
2,654 |
|
|
Goodwill |
|
|
|
|
|
7,912 |
|
|
7,125 |
|
|
Total
assets |
|
|
|
|
$ |
90,972 |
|
$ |
60,155 |
|
|
|
|
|
|
|
|
|
|
Total
current liabilities |
|
|
|
|
|
13,057 |
|
|
11,786 |
|
|
Long-term
debt |
|
|
|
|
|
12,674 |
|
|
- |
|
|
Operating
lease liabilities, noncurrent |
|
|
|
|
|
14,889 |
|
|
809 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
49,214 |
|
|
45,801 |
|
|
Total
liabilities and shareholders’ equity |
|
|
|
|
$ |
90,972 |
|
$ |
60,155 |
|
|
|
|
|
|
|
|
|
|
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